How to Use the Oregon Child Support Calculator

In Oregon child support is based on a formula.  You plug in the numbers, press a button, and the calculator produces the presumptively correct amount of child support.  You can agree to use a different number if both people are willing to do so.  However, in the absence of some other agreement agreement, the number produced by the calculator is the number that will be used.

Here is an overview of how to use the Oregon Child Support Calculator:

Income.  Income is the first and most important factor in the child support calculator.  In Oregon, “income” is defined very broadly and includes almost any form of money you receive (e.g., wages, bonuses, stipends, overtime, etc.).  There may be exceptions to this depending on your circumstances, but generally speaking all income is included.

Per Oregon law, if someone is not working they are usually still “imputed” minimum wage.  This basically means that the we pretend they are earning minimum wage even if they are not actually earning that amount.  There are a few exceptions to this rule, including disability of a party.  If someone is unable to work due to disability they typically are not imputed minimum wage.

Sometimes people are imputed income based on what they could be earning even if they are not currently earning that much.  This is similar to being imputed minimum wage, but slightly different.  For example, if someone has always earned $80,000 and then they are laid off but they are confident they will regain similar employment, they might be imputed $80,000 even though they aren’t currently earning that much.  Imputed income is definitely not a straightforward or easy topic.  Your mediator or attorney can talk to you more about this if it is relevant to your situation.

Spousal Support.  The transfer of spousal support is a factor in the child support calculator.  If someone pays spousal support to the other party, the calculator deducts that income from the payor (the person paying) and adds it to the income of the recipient.  In other words, you don’t have to pay child support based on money that you have to transfer as spousal support, BUT, the recipient receives slightly less child support due to receiving spousal support.

For example, if Party A earns $6,000, Party B earns $3,000 and Party A pays $750 per month in spousal support, then the calculator treats this as Party A earning $5,250 and Party B earning $3,750 for purposes of the support calculation.

Union Dues.  Union dues are a deduction off of your income in the child support calculation.  For example, if you earn $4,000 per month and pay $75 per month in union dues, the calculator treats you as earning $3,925.  In other words, you don’t have to pay child support based on money that you have to pay in union dues.

Parenting Plan.  A significant factor in the calculation is something called the “parenting time credit.”  The parenting time credit is a reduction in child support based on the number of overnights each parent spends with the children.  The idea is that if one parent has the children more, they will incur more costs directly on behalf of the children than if they had the children less.  For example, if you have the children half of the time, you are going to spend more on their food, day-to-day needs, etc., then if you only have them one day per week.  However, a 50/50 parenting plan does not necessarily mean there will be no child support.  If there is a disparity in comes with a 50/50 plan, you can still expect that there will be at least some amount of child support (although the other factors mentioned also play a role in determining this).

Note: The entry for parenting time credit is the number of overnights a child is expected to spend with each parent.  If there is a 50/50 parenting plan then you enter 182.5 overnights.

Cost of Parental Health Insurance.  The cost of a parent’s own health insurance just for that parent is a factor in the calculation.  This is similar to union dues mentioned above in that you do not pay child support based on dollars that you have to spend for health insurance premiums (but not other out-of-pocket medical expenses).  Both parents’ health insurance premiums are factored in, even if only one parent is providing health insurance for the children.  If you aren’t sure of the cost just for your own health insurance, ask HR to provide you a breakdown.  You will want to know the “employee only” cost.

Cost of Children’s Health Insurance.  The cost of health insurance just to cover the children is also a factor in the support calculator.  This is treated differently than the cost of a parent’s health insurance.  Instead of being a deduction off of your income, the cost of children’s health insurance is split between the parties proportionate to their incomes.  What this ends up meaning is that if a parent pays child support and provides health insurance (unless it is free), then that parent’s child support obligation will be reduced by the other parent’s proportionate share of the health insurance.  If a parent is receiving child support and provides health insurance for the children (unless it is free), then that parent’s child support will go up by an amount equal to the other parent’s proportionate share of the health insurance.  This means that both parents end up contributing to the cost of health insurance premiums even if only one parent is paying the premium out-of-pocket.

If you cover the children on your health insurance, the cost just for the children can be determined by subtracting the “employee only” cost from the “employee plus dependents” cost.  For example, if the “employee only” cost is $100 and the “employee plus dependents” cost is $220, then the cost just for the children is $120 ($220 – $100).

Note: Depending on your plan there may be a distinction between “employee plus family” and “employee plus dependents.”  If you currently cover your spouse, you might pay the “employee plus family” rate.  After the divorce you will no longer be able to cover your ex-spouse, so just make sure you are using the right figures when you are calculating the cost just for a parent vs. the cost just for the children.

Note: If you cannot distinguish between the cost for a parent and the cost for the children, the rule is that you prorate the amount per personFor example, if the total cost is $300 and that covers you and two children, then the cost just for you is $100 and the cost for the children is $200.  Again, this only applies if you cannot find information about the difference in cost for employee only and dependents.

Childcare.  The cost of work-related or school-related childcare is a factor in the child support calculation.  The cost of childcare is treated just like the cost of a child’s health insurance premiums, i.e., it is split proportionate to the parties’ incomes.  So, if one parent pays all of the childcare, child support will be automatically adjusted so that both parents end up contributing to the cost even though only one person is paying for it.

Note: Childcare to go on a social outing is paid by the person who needs it and isn’t factored into the calculation.

Note: Due to the fact that childcare fluctuates over time, people will often exclude childcare from the child support calculation and instead split the cost proportionate to their incomes.  Doing this allows you to address the cost of childcare without having to rerun the child support calculation every time childcare changes.

Rebuttal Factors.  The child support calculator produces the amount that will apply unless there is a really good reason that there should be an adjustment to the amount.  There are a number of “rebuttal factors” that can be applied to either increase or decrease child support.  These usually don’t apply unless there is a very compelling reason to change child support.  A good example of a situation where a rebuttal factor is appropriate is if you have a child with special needs who requires significant additional costs for his or her care.  There are many rebuttal factors and a description of them is beyond the scope of this article.  They are mentioned here only so that you know that they exist.

Note: As a practical matter, you can change child support as long as you both agree (and the change is within reason) even if there is not necessarily an applicable rebuttal factor.  You should discuss his further with your mediator or attorney if you think this may come up in your situation.

Agreed Upon Changes.  Parties can agree to either increase or decrease child support within 15% as long as they both agree to do so and without the need to prove a rebuttal factor.  Parties do this for a variety of reasons, including that they want to make child support a round number.  For example, if child support is $198, you could agree to increase it or decrease it by $29.70; parents will often round up $2 so that it is $200.

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Here is a link to the Oregon Child Support Calculator: https://justice.oregon.gov/guidelines/

Feel free to try and run your own ballpark calculations.  But if you can’t figure it out, don’t worry about it – that’s what mediation is for.  Also, there is plenty of room for disagreement and/or adjustment in some of these factors (particularly income).  So again, don’t feel like you have to get it all figured out yourself.

What Does Child Support Cover?

People frequently ask the question, “What does child support cover?”  The answer depends, at least in part, on who you ask.  Note: Although the principles in this article may be relevant in other states, this article only applies to child support in Oregon.  The topics discussed are not “rules” per se, but rather observations based on practicing family law for 10 years and having mediated hundreds of cases.

The General Rule.  Generally speaking, if you go to trial a judge will tell you that child support covers a parent’s entire contribution to a child’s expenses in the other parent’s household, except for unreimbursed medical expenses which are their own separate category.  (It’s important to note that contributions for childcare and health insurance premiums are factored into the child support calculation.)  In other words, parents are generally not required to split various costs related to their childrenWith that in mind, one common reason for choosing mediation is so that people can reach their own agreements without having someone tell them what they are going to do. 

The Parenting Time Credit.  The Oregon Child Support Guidelines factor in something called a ‘parenting time credit.’  The parenting time credit is a reduction in child support based on the total amount of time a parent spends with the children (usually based on overnights).  The idea is that if someone has more time with the children, they are spending more money on the children during their time than if they did not have as much time (and the other parent is spending less).  It’s pretty easy to imagine that a parent who has a ‘week on/week off’ parenting plan will spend a lot more money on things related to the children then a parent who only sees the children every other weekend.  The parenting time credit accounts for this.

The concept of the parenting credit makes sense, but it can also make the “normal” child support rules a bit confusing in certain situations.  If one parent has very limited parenting time, then it makes sense that that parent pays child support and the other parent pays for most expenses.  But who is supposed to pay for the various expenses if parents have equal parenting time, particularly if they have similar incomes?  This is one example of why people often split certain expenses.

What Percentage To Use?  When it comes to “splitting” expenses, you need to identify what percentage each parent will pay.  If parents have similar incomes – particularly after transfer of child support and/or spousal support – then parents will often (although not always) agree to split these expenses 50/50.  One of the benefits of splitting expenses 50/50 is that the accounting and reimbursing for expenses is more straightforward.

Alternatively, people sometimes split expenses proportionate to their incomes.  This means, for example, that if one parent has 70% of the income and other parent has 30% of the income, then they would split expenses 70/30.  Parents will often split things proportionate to incomes in situations where they have very disparate incomes.

There is not a ‘right’ answer to how expenses will be split – or if they will be split.  Further, people will sometimes split one category 50/50 while splitting other categories proportionate to their incomes.  It all depends on what makes the most sense to both of you.

No Child Support.  In situations where child support is low anyway, e.g. less than $100, parents will sometimes agree that they will reduce child support to $0 and instead split some or all of the categories of expenses described below.  It’s important to know that child support is inherently modifiable, which means that even if there is no child support now, there could be child support in the future.  (Here is an article about modification.)  In any event, child support will only be reduced to $0 if both parents agree to it.  If there is no agreement, then the Oregon Child Support Guideline calculation will apply.

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Here are categories of expenditures that people will sometimes include in addition to (or in lieu of) child support:

Irregular Expenditures.  The Oregon Child Support Guidelines don’t necessarily factor in larger irregular or “one off” expenditures.  For example, if a child has a junior trip to Washington D.C. how should that be paid for?  What if a child has to have an iPad for school?  What about a $300 bike?  People often include a provision that says that they will split the cost of these irregular expenditures as long as both parents agree.  This provision isn’t a “risk” to either parent because it only requires parents to pay for something if they both agree.

Extracurricular Activities.  Does your child have a specific activity that he or she has always participated in?  In that case, parents will sometimes agree that they will split anything related to that particular activity, regardless of cost.  For example, if your child has always played club soccer, you might agree that you will split the cost of anything soccer-related without the need to discuss it first (although as a practical matter, you should run these sorts of things by the other parent).  With this type of provision, it still makes sense to say that, notwithstanding the agreement to split everything soccer-related, you will discuss anything over a certain amount before incurring the cost ($e.g., $200).  Additionally, parents will sometimes agree to split all extra-curricular fees even if their child does not have a “preferred” activity.

Sometimes parents paying child support do not want to include this provision because the Oregon Child Support Guidelines assume that these expenses are covered by child support.  This is a perfectly reasonably position for the parent to take.  If parents disagree about splitting extracurricular activities, the presumption is that the provision would not be included.

School Related Expenses.  Back-to-school shopping can be a very significant expense.  New clothes and school supplies can easily cost a few hundred dollars or more.  Parents will sometimes agree to split back-to-school shopping.  They may also agree to split other school related expenses such as misc. school fees, school pictures, field trip fees, etc.  As with extracurricular costs, if parents disagree about splitting these costs, the presumption is that the provision would not be included.

Private School Tuition.  Private school tuition is typically something a court will not order parents to split unless they agree.  With that said, if it is important to both parents that a child continues to attend a particular school, parents will sometimes agree to split the cost of private school tuition.

Childcare.  Work or school-related childcare is a factor in the child support calculation.  The child support calculator splits the expense proportionate to each parent’s income.  What ends up happening is that if one parent pays all of the childcare expenses, then child support will go up if that person is receiving child support or child support will go down if that parent is paying child support.

One of the challenges of factoring childcare costs into the child support calculation is that childcare costs fluctuate regularly.  As children get older costs typically change.  Also, when there are breaks from school costs typically change.  If you factor childcare into the child support calculation and then there is a significant change in childcare cost, then you will probably have to run a new childcare calculation.

One way that people avoid having to constantly rerun child support calculations is by excluding childcare from the child support calculation.  Instead, people will split childcare proportionate to their incomes (usually) when it is incurred.  That way if childcare costs fluctuate, your contributions to childcare will fluctuate but child support will stay the same.  The reason childcare is split proportionate to incomes instead of 50/50 is because the child support calculator splits the cost proportionate to incomes.

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It’s important to understand that parents are generally not required to split the above expenses.  However, many parents often agree to split at least some of these expenses.  In the absence of an agreement, it is important to know that the presumption is that these expenses will not be split.

The topic of splitting expenses is a good example of why people pick mediation in the first place – so they can create agreements that make sense to them rather than having someone else make their decisions for them.

So what does child support cover?  The answer, at least in mediation and Collaborative Law, is that child support covers whatever you both agree it should cover.

Notifying the Life Insurance Company

Judgments that contain child support, spousal support or property settlements that will be paid over time typically contain a requirement that the person who owes the money has to maintain life insurance to “insure” the support award.  Once the divorce or custody judgment has been signed by the court it will be time to notify the life insurance company.  Here is what you need to know:

Disclaimer – Use and review of this article is subject to the Disclaimer at the end of the article.

Copy of the Life Insurance Policy

First, the insured party (the party who owes the money) has to provide a copy of the applicable life insurance policy to the person who is the beneficiary (or trustee beneficiary) of the policy.  The policy document provides the beneficiary with the address and other policy information that they need.

Notification Letter

Next, the beneficiary needs to send a notification letter as well as a certified copy of the judgment to the applicable life insurance company.  A certified judgment is one that contains the court’s official seal on it.  You will need to obtain a certified copy directly from the courthouse (your lawyer or mediator can assist you with obtaining a certified copy).  You can learn more about obtaining certified copies here.

The notification letter is the part that is confusing to most people.  Here is a sample life insurance notification letter.  This resource is provided only as a sample only and cannot be used as-is.  You will need draft your own letter and tailor it to your own specific circumstances and terms of your judgment.

Do not attempt this notification process if you are represented by an attorney.  Your attorney should take care of this for you.  If you are unsure if your attorney has taken this step, be sure to ask.

Confirmation from the Life Insurance Company

The life insurance notification process is not complete until you receive a notification from the life insurance company acknowledging receipt of the judgment and that they will comply with the terms of it.  If you do not receive confirmation from the company be sure that you follow up with them until you do.

Disclaimer

  • The information in this article is provided only as a general informational resource for unrepresented parties. Nothing contained herein letter constitutes legal advice and nothing contained herein should be construed as legal advice.
  • If you are represented by an attorney, you should not attempt the life insurance notification process yourself.
  • The sample letter above is not to be used “as-is”. This is a sample only which must be modified based on the circumstances of your situation.  It is your responsibility to draft your own letter.  This sample is specifically provided as a .pdf file so that you cannot use this document.
  • The life insurance requirement is very important and there can be significant consequences if it is not done correctly. If you have any questions about the life insurance notification process you should contact an attorney.
  • Use of, or reliance upon, the sample letter is done so at your own risk. Forrest Collins accepts no liability or responsibility for your use of or reliance upon the sample letter, whether used in whole or in part.
  • This article only applies to judgments entered in the State of Oregon.

Life Insurance and Divorce

Life insurance is not something that most of us like to think about or discuss.  However, in the context of divorce it is very important and something that needs to be addressed.  While this article talks about life insurance related to divorce, the concepts also apply to unmarried parents or unmarried persons where one may owe money to the other.

The basic idea behind life insurance in a divorce is that if someone owes money to someone else – whether for spousal support, child support or a property settlement – and the person who owes the money (the payor) dies, the person who was relying on that money is out of luck.  If the payor has life insurance, the recipient is still provided for.

There are three main considerations in life insurance: How much, how long and beneficiary designation.

How much life insurance is needed?

The amount of life insurance that is needed is usually the amount of money owed to someone.  For example, if someone owed a $50,000 property settlement, then $50,000 in life insurance coverage would be needed.  One generally accepted exception to this rule is that you don’t necessarily need dollar-for-dollar coverage to insure a spousal support award.  The reason for this is that spousal support is taxable to the recipient but life insurance is not.  This means, for example, that if someone was supposed to receive $100,000 in life insurance over a period of several years, they would pay taxes on that support and so they really wouldn’t receive $100,000 – they might actually receive $75,000 after paying taxes.  In this example, then, $75,000 would be an appropriate amount of life insurance to insure the $100,000 spousal support award.  This is only an example which is offered for the purpose of better explaining the concept.  You should do your own analysis on how much insurance is appropriate in your particular situation.

When it comes to child support, the easy answer is that you should maintain the same amount as you would pay in child support over time.  However, this does not take into account the fact that if one parent passes away the other parent will have substantially increased expenses for increased childcare, now having to pay all of the expenses, etc.  For this reason, people will often “round up” and maintain more life insurance to benefit the children than you would otherwise think necessary.

How long do I have to maintain life insurance?

This answer is fairly straightforward – you need to maintain life insurance for as long as you owe money to someone, including any arrearage.  An “arrearage” means past-owed money, i.e., payments that you owed but haven’t paid.  If you owe back payments, you need to maintain life insurance until you are completely paid up.

Who is the beneficiary?

In spousal support and property settlement situations, the recipient of the money is going to be direct beneficiary of the life insurance.  The reason is fairly obvious – if someone was owed money, they should receive the life insurance.

What about for child support?

People sometimes think that their children should be the beneficiary of the parent’s life insurance policy.  They shouldn’t!  The idea is well-intentioned but a non-starter.  Consider this – what if you passed away and your 5-year-old received $250,000 and has a Hot Wheels fascination?  Do you get the idea?  The money should either go to the other parent to use for the children or should go into a trust for the benefit of the children.

People very frequently name the other parent as the direct beneficiary of life insurance when there are children involved.  The basic idea is that the other parent is now responsible for all of the children’s care and expenses and therefore should have access to the money to make necessary purchases.

If someone is not comfortable naming the other parent as direct beneficiary, then the next most common approach is to set up a trust to hold the money.  The life insurance policy will name the trust as the beneficiary.  The other parent is typically named the trustee of the trust.  One benefit of establishing a trust is that there will be specific parameters for using the money.  One of the downsides is that the person maintain the insurance has to do some estate planning to make sure this is set up properly.  (This isn’t necessarily a bad thing – you should always update your estate plan post-divorce anyways.)

Other considerations.  There are a number of other considerations in addition to those mentioned above.

What if it is too expensive?

Sometimes life insurance is cost prohibitive or not available at all.  If someone has previously had a serious health issue they may simply not be able to obtain coverage.  One way of dealing with this is to have that person leave the other person assets in their estate plan which are sufficient to “pay off” the amount owed to the recipient.

Who pays for the policy?

The generally accepted rule is that it is the responsibility of the person owing the money to maintain and pay for the life insurance.  A person who is owed money also has the right to purchase additional coverage on the payor at his or her own cost (i.e., at the cost of the person who is owed the money).

Can I change policies?

A person is typically allowed to change life insurance policies as long as the same amount of coverage is maintained and the beneficiary is notified.  A new judgment will need to be obtained which specifies the new policy information.

Conclusion.

This article covers the main considerations in life insurance, but it is not exhaustive.  You should speak with your mediator or attorney if you have additional questions regarding life insurance in the divorce context.  Once you have a signed judgment, the next step will be to submit the judgment to the applicable life insurance company.