Five Things That Determine Your Child Support
The amount of child support you pay or receive is not a number that fell from the sky. It is calculated. What you pay or receive, depends on the following five things.
1 – Child Support Arrangement
2 – Income
3 – Care Percentage
4 – Other Children
5 – Ex’s Income.
Let’s look at this from the paying parent’s perspective (if you receive child support, read this the other way around).
1 – Your Child Support Arrangement
There are four types of child support arrangements. The two most common ones are assessments and agreements.
If you use child support assessments, your child support will fluctuate as your income, care percentage and number of your other children.
If you signed an agreement, that agreement would have considered the following four things. But once you signed, your child support is locked in – unless you make a new agreement.
2 – Your Income
The more you earn, the more child support you pay. Depending on the type of your income and the structure of your wealth, you can influence the amount of that income.
As an employee, there is some wiggle room but not much.
As a contractor, you have a bit more space, how much depends on your set-up.
But if you run a full-fledged business with third-party employees, the world is your oyster.
In addition, you can use companies and trusts to split and defer your income. For this one, you need an accountant who understands child support.
3 – Your Care Percentage
The more time you spend with your children, the less you pay if you use assessments – as long as you spend at least 30% with your children.
4 – Your Other Children
The more children you have, the less child support you pay for a child.
Let’s say you have a child from your teenage years but are now happily married with children. The more children you have with your wife, the less child support you pay for your first child.
5 – Your Ex’s Income
The less difference between your income and the other parent’s income, the less you pay.
Summary
The more you can control these five things, the more you control the amount of child support you pay or receive.
Here is more: 25 Ways To Reduce Child Support