ORDERS:
REPORT
This matter coming before the Honorable John D. McLeod, on the 10th of February, 2006. Present at the proceeding were
representatives of the Department of Social Services: Larry J. McKeown,
Director of the Child Support Enforcement Division; Steve Yarborough, Assistant
Director; and Paul F. LeBarron, staff attorney. Record was kept by Court
Reporter Christine A. Cortright.
The public hearing was convened to address the
reasonableness of the Department's proposed regulation which would modify the
existing child support guidelines regulations. Aside from the representatives
of the Department, there was no one else in attendance.
All notices and filings required prior to the
hearing are present in the record. The Court kept the record open until
February 22, 2006, at 5:00 PM to allow any party, present or otherwise, to
enter any further evidence or statements into the record. The Administrative Law Court’s file was entered into evidence in its entirety. No further
entries into the record were received.
The Department entered into the record a copy
of the State Register showing publication of the proposed regulation on
December 23, 2005, as well as an attestation that there were no materials
received by the Department regarding the proposed regulation. Finally, the
complete proposed regulation was again entered into the record (A copy of which
is appended hereto as “Exhibit A” for reference, including the proposed
regulation consisting of eleven (11) pages and tables consisting of ten (10)
pages).
The Department then presented argument toward
the reasonableness and need of the proposed regulation. The regulation will
modify the existing child support Guidelines first and foremost to equalize the
levels of support to more closely match the present cost of raising children.
The current Guidelines scheme allows for the uniform determination of support
across the State of South Carolina, allowing all judges, practitioners, and
parties to clearly and definitively arrive at an appropriate level of support
based on the financial situation of the parents.
The entire basis of the South Carolina Child
Support Guidelines is the “income-shares model”. This economic model, which is
used in a majority of other states' guidelines, addresses the cost of raising
children by two parents in the same household. The theory holds that each
parent has a duty to provide for the child to the best of that parent's
ability, and that a portion of the combined household income will be directly
attributed to supporting the child. The Guidelines quantify what that portion
is for each parent, and determine the share of the parent without custody of
the children. That share is based upon the percentage of income of the
non-custodial parent to the entire combined “household” income.
The model takes into account that all children
require food, housing, clothing, transportation, school expenses and similar
costs that all children require, and quantifies those expenses over the
minority of a child. This gross quantification is then subdivided into a
fixed, monthly obligation. As the expenses and costs are averaged over the
minority of the child, there is no distinction between the support obligation
for an infant or a teenager at a certain income level. Further, as these
expenses are averaged over the entire state, there is no regional distinction
between the support obligation of a child in Charleston with one in Cowpens or
Elloree.
The Guidelines do not take into account
expenses that are not easily standardized, such as medical insurance,
extraordinary medical expenses, and day care expenses. These expenses are
quantified and shared between the parents on a case-by-case basis, in addition
to the appropriate obligation determined under the Guidelines.
The support obligations that are contained in
the tables of the Guidelines are developed by a consultant hired by the
Department. The bases of the models are found in a Report to the Federal Office
of Child Support Enforcement, which is referenced in the Introduction to the
Guidelines.
In addition to the standard determination model
of one parent being primary custodian, South Carolina's Guidelines allow for
the determination in other custody scenarios; namely, joint custody, where each
parent has significant visitation with the child, exceeding almost one-third of
the year, and where multiple children are split among parental households where
each parent is primary custodian of at least one child.
The change in economy and cost of living since
the last revision of the Guidelines in 1999 necessitates the proposed
regulation. Changes in the tax code alone warrant the modification. As taxes
overall have decreased through increased exemption amounts and rate reductions,
the amount of funds available to parents to provide for the children increase,
which is reflected in the obligation levels of the Guidelines. Also, tax rules
and credits regarding child care have increased, which reduces the burden on
the custodial parent for child care. The Guidelines address this to right-size
the resulting obligation between the parents.
Another significant change has been the rise of
the federal poverty level. The Guidelines were constructed recognizing that a
non-custodial parent required a minimum level of income in order to provide for
their own subsistence, before any significant contribution to the child can be
made. At the time of the last revision in 1999, the poverty level was around
$600 per month, and the Guidelines recognized a self-support reserve of $500
per month. The current poverty level is near $800 per month, so the Guidelines
had to be modified to recognize that increase. The proposed Guidelines now
include a self-support reserve of $748 per month, a level where a non-custodial
parent would be subject to a minimum child support obligation. Considering
that the cost to not only the parties but also the state for the non-payment of
child support, namely incarceration, the need to right-size the support
obligations for the lower-income non-custodial parents is great.
The actual promulgation of the proposed
regulation involved a rather diverse committee convened by the Department just
for this purpose. In addition to representatives of the Child Support
Enforcement Division, the Committee was comprised of persons representing the
different classes or groups affected by any changes. It included members of
the private bar who will be practicing with these new Guidelines on a continual
basis. Members of Legal Aid and the Fatherhood Initiative presented the point
of view of the poor parent, both custodial and non-custodial. There was a
representative of the military addressing items particular to the armed
services. Researchers of economic policy from the Strom Thurmond Institute as
well as members of the Budget and Control Board's Division of Statistics and
Research provided input. Representative Phillip Sinclair joined us from the
House of Representatives, as well as a Certified Public Accountant. Court
Administration also had a representative with the Committee. The work of the Committee
was carried over to a policy meeting chaired by Senator James Ritchie as part
of the Senate Task Force on the Family Court.
This report contains a cohesive summary of the
testimony and argument presented on the record at the public hearing. Based on
the record in this case, I find that the South Carolina Department of Social
Services has demonstrated that the proposed regulation in the above-referenced
matter is necessary and reasonable.
______________________________
John D. McLeod
Administrative
Law Judge
February 27, 2006
Columbia, South Carolina |