### Sponsor Memo

BILL NUMBER:S6784

TITLE OF BILL: An act to amend the social services law and the

domestic relations law, in relation to income amounts to be utilized

in issuing orders of child support and temporary spousal maintenance

in supreme and family court

This is one in a series of measures being introduced at the request of

the Chief Administrative Judge upon the recommendation of her Family

Court Advisory and Rules Committee and the Matrimonial Practice

Advisory Committee.

This measure would revise the method of calculation for the State's

Child Support Standards Act and Temporary Maintenance Guidelines

formulas.

In 2009, the Legislature enacted the Child Support Modernization Act

(L. 2009, c. 343), which, for the first time in two decades, raised

the combined parental income benchmark used to calculate child support

under the Child Support Standards Act (Family Court Act § 413).

Colloquially known as the child support "cap," the figure was raised

from $80,000 to $130,000, with a built-in mechanism for indexing and

adjusting the figure every two years depending upon changes in the

Consumer Price Index. For combined parental incomes up to the

benchmark amount, the Child Support Standards Act percentages must be

presumptively applied, that is, 17% of combined parental income for

families with one child, 25% of combined income for families with two

children, 29% for three children, 31% for four children and not less

than 35% of income for five or more children. For amounts in excess

of the benchmark, which has been adjusted as of January 31, 2014 to

$141,000, the Supreme or Family Court is required to consider the ten

factors enumerated in section 413 (1)(f) of the Family Court Act and

section 240(1b)(f) of the Domestic Relations Law and determine whether

application of the CSSA percentages to income in excess of that

threshold would be "unjust or inappropriate." The court may adjust its

determination based upon the ten factors or continue to apply the CSSA

percentages or may apply a combination of both approaches. See Family

Court Act § 413(1)(c)(3); D.R.L. § 240(1-b)(c)(3). As the State Office

of Temporary and Disability Assistance stated in its Memorandum in

Support of chapter 343.

This provision will serve to increase the consistency of support

orders throughout the State by updating the combined parental income

amount utilized by the court in calculating support obligations to

reflect current economic realities, thereby leaving only exceptional

income cases to potentially be determined outside the presumptively

correct CSSA percentages.

Clearly, salutary experience under the 2009 CSSA statute has furthered

this goal. However, an anomaly in the language describing the means by

which the combined parental income benchmark is calculated has led to

unforeseen results that may be disproportionate to the actual rate of

inflation. A similar anomaly exists in the Temporary Maintenance

Guidelines statute adopted by the Legislature in 2010 as a new

subdivision (5-a) to part B of section 236 of the Domestic Relations

Law, setting forth a mathematical formula and factors for determining

a temporary maintenance award. The court must award the presumptive

guideline amount unless it finds it to be "unjust or inappropriate."

In the latter case, the court may adjust the amount upon consideration

of 17 factors.

The statute set an initial "income cap" of $500,000 (which has been

adjusted as of January 31, 2014 to $543,000). The statute provided

that the cap was to be adjusted every two years thereafter, starting

on January 31, 2012, based upon the Consumer Price Index. Where the

payor's income does not exceed the income cap, the guideline amount

for temporary maintenance would be the lesser of 30% of the payor's

income, minus 20% of the payee's income; or 40% of the SUM of the

payor's income and the payee's income, MINUS the payee's income.

Where the payor's income exceeds the income cap, the temporary

maintenance award guideline is the sum of (1) the amount calculated as

set forth in the formula above, setting the payor's income at the

income cap; and (2) such additional amount as the court may order

following consideration of 19 enumerated factors. The guidelines also

include protections for low income individuals.

In defining the income cap, the Legislature adopted the very same

language for an increase in the income cap on January 31st of 2012 and

every other January 31st thereafter as is contained in the CSSA. The

purpose was identical, namely, to make sure that the income cap kept

up with economic realities.

Section 111-I of the Social Services Law provides that the combined

parental income amount in the CSSA must be adjusted every two years by

"the product of the average annual percentage changes in the consumer

price index for all urban consumers (CPI-U) as published by the United

States Department of Labor Bureau of Labor Statistics for the prior

two-year period rounded to the nearest one thousand dollars."

Similarly, subdivision (5-a) of part B of section 236 of the Domestic

Relations Law provides that the income cap in the Temporary

Maintenance Guidelines must be adjusted every two years by "the

product of the average annual percentage changes in the consumer price

index for all urban consumers (CPI-U) as published by the United

States Department of Labor Bureau of Labor Statistics for the two-year

period rounded to the nearest one thousand dollars." As is the case

for calculation of the biennial "Cost of Living Adjustment," it would

be more appropriate in both the CSSA and Temporary Maintenance

Guidelines formulas, to utilize the "sum," rather than the "product"

of the average annual percentage changes in the CPI-U. See Family

Court Act § 413-a(2)(a); D.R.L. § 240-c(2)(a).

Use of the term "product" was most likely intended to refer to the

product of the combined parental income "cap" multiplied by the

combined total of the changes in the CPI-U during the preceding

two-year period, that is the total level of inflation during the

applicable period. However, read literally, the current language might

be read to require the change in the first year to be multiplied by

the change in the second year. Changes in the CPI-U have been modest

for the past few years - in the 1.5 - 2.1% range - thus not causing a

major disparity in the amount of the "cap." But if the CPI-U increases

at a rate of 3.5% or higher in future years, significant disparities

would emerge. An example for each formula will suffice.

CSSA Cap: Assuming that the annual rate of change in the CPI-U over a

two-year period is 3.5%, then using the product of the changes (as

under the current statute), 3.5% times 3.5%, yields 12.25%. 12.25% of

$141,000, the 2014 "CSSA cap," is $17,272, which, rounded to the

nearest $1,000, is $17,000. The "cap" would thus be $158,000 ($141,000

plus $17,000). In contrast, using the sum of the changes, as proposed

in this measure, 3.5% plus 3.5%, yields a 7% change; 7% of $141,000 is

$9,870, or $10,000 when rounded to the nearest $1,000. The new "cap"

would thus be $151,000 - a significant $7,000 difference between the

two methods of calculation.

Temporary Maintenance Cap: Assuming that the annual rate of change in

the CPI-U over a two-year period is 3.5%, then using the product of

the changes (as under the current statute), 3.5% times 3.5% yields

12.25%. 12.25% of $543,000, the 2014 "cap," is $66,518, which rounded

to the nearest $1,000 is $67,000. The "cap" would thus be $610,000

($543,000 plus $67,000). In contrast, using the sum of the changes, as

proposed in this measure, 3.5% plus 3.5% yields a 7% change; 7% of

$543,000 is $38,010, or $38,000 when rounded to the nearest $1,000.

The hew "cap" would thus be $581,000 - a significant $29,000

difference between the two methods of calculation.

This measure proposes use of the same terminology as in the COLA

calculation - that is, the sum of the average annual percentage

changes in the CPI-U for each of the two years multiplied by the

existing combined parental income "cap" and then rounded to the

nearest $1,000. This methodology will yield results reflecting the

total amount of inflation for each two-year period and will thus be

proportional to the inflation rate. In this way, the calculation of

child support in cases where the combined parental income exceeds the

"cap" and calculation of Temporary Maintenance where the payor's

annual income exceeds the "cap" will more fairly and accurately

fulfill the legislative intent of the Child Support Standards Act and

the Temporary Maintenance Guidelines. In the case, of the Child

Support Standards Act, that is, to establish "a method for determining

an adequate level of support in actions involving children."

(Governor's Program Bill Memo, L. 1989, c. 567, p. 1). In the case of

the Temporary Maintenance Guidelines, that is "to provide consistency

and predictability for temporary maintenance awards similar to the

child support guidelines in the Child Support Standards Act." (Bill

Memo to 2010 Assembly Bill 10984-B)

This measure, which would have no fiscal impact upon the State, would

take effect 90 days after it shall have become a law.

Legislative History:

None. New proposal.