Variable Costs

The Child’s Expenses / Variable Costs

Parents are expected to meet their children’s basic needs during their placement periods. The child support guidelines define “basic costs” at DCF 150.02(3): “food, shelter, clothing, transportation, personal care, and incidental recreational costs.”

When parents qualify for the shared-placement child support formula under DCF 150.04(2) and the amount of child support is reduced based on both parents’ income, the guidelines require parents to share payment of “variable costs.” The child support guidelines define “variable costs” at DCF 150.02(29) as “the reasonable costs above basic support costs incurred by or on behalf of a child, including but not limited to, the cost of child care, tuition, a child’s special needs, and other activities that involve substantial cost.” Parents must pay variable costs in proportion to each parent’s placement time. Thus, if the parents have equal placement of the child, each would pay 50 percent of the variable costs. If one parent has placement 70 percent of the time, that parent would pay 70 percent of the variable costs.

Payment and reconciliation of variable costs can be contentious and difficult. It is not uncommon for parents to argue over reconciliation of variable costs to the point that each has paid more for attorney fees and accounting fees than they would have paid if they had simply paid 100 percent of the variable costs.

Accordingly, we recommend entry of an order requiring compliance with tight procedures for payment and reconciliation of variable costs. We often recommend that a child support order include the following variable cost reconciliation procedure: Each parent computes the amount they spent on variable costs on a quarterly basis (March 31, June 30, September 30 and December 31) for the preceding three months. By a specified deadline, the parents must exchange their itemized expenses, along with receipts. The parent who has spent less in the quarter shall pay the difference to the parent who has spent more on variable expenses by a specified deadline, in proportion to the percentage amount of placement each parent has. Any variable expenses not submitted pursuant to this procedure are waived.

The courts have authority to determine the average amount of variable costs and simply add that amount to the child support order. This spares parents in high-conflict situations from having to work together on these issues.