For parents of minor-aged children who divorce or split up, in addition to decisions related to child custody and visitation, child support obligations and amounts must be decided. In Pennsylvania, the amount of child support each parent is required to pay is calculated by the Court who examines several factors including each parent’s monthly income and needs of a child.
In most cases, Pennsylvania Support Guidelines are applied and calculated without question. However, in cases where one or both parents earn substantial incomes that exceed $30,000 per month, other factors may be taken into consideration when determining support amounts.
Child Support Calculations In High-Income Cases
A recent decision by the Pennsylvania Supreme Court illustrates the complexities associated with high-asset child support cases and when deviations from Pennsylvania Support Guidelines may apply. In Hanrahan v. Bakker, the divorced parents of two, who are both attorneys, had a marital settlement agreement dictating that to account for fluctuations in annual income, child support payment amounts were to be recalculated on an annual basis.
From 2010 to 2012, the father’s annual income fluctuated significantly from roughly $1.8 million and a monthly support payment of $3,702, to more than $15.5 million and a calculated monthly support payment of approximately $60,000.
In this case, the father, Hanrahan, wrote to the mother, Bakker, informing her that the $60,000 per month child support amount was “way beyond any realistic estimate of the reasonable needs of the children.” He agreed to continue to pay the previous year’s set support amount of $7,851. Bakker, did not agree with this calculation and petitioned the court to enforce the marital settlement agreement.
The case made it all the way to the Pennsylvania Supreme Court where a final decision landed on the father’s side with the Judges citing the difficulties associated with calculating the reasonable needs of children living in high income households.
Understanding the implications of Hanrahan v. Bakker
All parents want to ensure that they are providing the material things and opportunities their children need to develop and thrive. Pennsylvania Support Guidelines were established with the acknowledgment that all children have basic needs of food, clothing, shelter, education and medical care. However, in higher income households where the strict application of support guidelines could result in a child receiving a monthly support amount that exceeds the annual income of many middleclass households, deviations are appropriate.
In short, one parent’s good fortune should not be the other’s windfall and support amounts should always take the reasonable needs of a child into consideration. If you are a parent who is involved in a support matter or dispute in which your or your ex’s monthly income amount exceeds $30,000, it is important to ensure that your rights and those of your children are represented by an attorney who has experience handling complex divorce and support cases.