When child support becomes an issue between divorcing parents, the courts must decide whether certain income sources - such as pensions, rental properties and businesses - should be considered as marital property or income for support purposes. Generally, they cannot be both. In Berry, the Superior Court held that severance pay would be counted as marital property if acquired before separation or income if acquired after separation. This case reminds us that an important strategy decision must be made early in the case: whether to treat income-producing property as marital property to be divided in equitable distribution or as income which may be subject to an alimony or support obligation (but not both).
#3 - Estate of Johnson, 970 A.2d 433 (Pa.Super.2009)
While this decision might be limited to its unique factual circumstances, the Superior Court certainly affected settlement practice by holding the estate of a deceased parent responsible for the payment of child support. The deceased parent had entered into a marital settlement agreement with his ex-wife, promising to pay child support until the youngest child was 18 years of age. The agreement did not specify whether the obligation would terminate upon the death of a parent, so the court held that it did not. The estate ended up owing nothing, however, because the Social Security derivative benefits received by the child as a result of the parent's death satisfied the child support obligation. This case has prompted many lawyers to specify death as cause for terminating child support in their agreements, and has also motivated support recipients to demand life insurance as a security device.
#2 - Krebs v. Krebs, 944 A.2d 487 (Pa.Super.2008)
In this case, the Superior Court fortified its prior admonitions warning support payors to report increases in their income. In cases where a payor fails to report an increase, even an increase not precipitated by a job promotion or change in employers, the court may increase child support retroactively to the date when the income increase occurred, even years later. The Superior Court in Krebs granted such a retroactive increase in child support even after the custodial parent had refused an optional three year review of child support. The retroactive increase was granted because the payor had failed to report his increased income as a commissioned salesman to the court.
#1 - The 2010 Amendments to the Pennsylvania Child Support Guidelines
The 2010 amendments (effective in May 2010) have eliminated the Melzer formula, which was a budget-based method of calculating child support in high-income cases. The uppermost limits of the child support guidelines have been extended to $30,000 per month combined net income, and an income-based formula has been promulgated to calculate child support in high-income cases. Budgets can be introduced in high-income cases, but only to substantiate a deviation (upward or downward) from the new child support guidelines.
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Brian C. Vertz is a Pittsburgh family lawyer experienced in resolving all financial and personal aspects of divorce, property division, alimony, child support, spousal support, settlements, prenuptial agreements, custody, and appeals.