In the 2020 legislative session, the Maryland General Assembly passed a series of changes – including changes to the Maryland child support statute – that were to take effect on October 1, 2021. However, in the face of the COVID-19 pandemic, the effective date was delayed, and those changes will now become law starting July 1, 2022. Two significant changes to the Maryland child support statute involve the schedule of basic child support obligations and what it means to be voluntarily impoverished.
Increased Income Threshold
There continues to be a presumption – albeit rebuttable – that the amount of child support derived from Maryland’s child support guidelines is the proper amount of child support, and the Court shall use the child support guidelines in cases where the combined income of the parties falls within the guidelines. If the parents’ combined income exceeds the highest level specified in the schedule, the court may use its discretion in setting the amount of child support.
Currently, and until June 30, 2022, the Maryland child support guidelines mandatorily and presumptively apply to parents with combined monthly incomes ranging from $100 – $15,000. The schedule, beginning on July 1, 2022, has increased the amount of its ceiling income, thus encompassing and determining the child support obligations of parents with combined monthly incomes ranging from $0 – $30,000. This means that parents with combined monthly incomes ranging from $15,000 – $30,000 will now be subject to the schedule of basic child support obligations’ determination, rather than the court’s own discretion. It is noteworthy that additional changes in the child support statute scheduled to take effect include a self-support reserve which takes into consideration that parents at the lowest income levels require a basic amount of money to support themselves before being in a position to pay support. The reserve standardizes the calculation, but permits deviation from the resulting guideline amount when appropriate.
What is Voluntary Impoverishment?
In Maryland, although one parent typically pays support and one parent typically receives support, the calculation is made with the presumption that both parents have an obligation to contribute to the presumptively correct child support obligation. The paying parent’s obligation is offset by the amount the other parent is presumed to contribute, recognizing that parents do not literally “pay” support to themselves. As child support obligations are calculated based upon the relative incomes of the parties, it is not uncommon that one parent in a child support equation believes the other parent is not earning income to that parent’s capacity. The term for this concept is “voluntary impoverishment” which, simply stated, means that one parent chooses to be unemployed or underemployed in order to avoid paying child support.
Voluntary impoverishment has historically been determined through case law analysis; however, beginning on July 1, 2022, this concept is becoming codified. According to the new law, ‘“voluntarily impoverished’- means that a parent has made the free and conscious choice not compelled by factors beyond the parent’s control, to render the parent without adequate resources.”.
In a dispute regarding voluntary impoverishment, the law mandates that the court shall make a finding as to whether, based on the totality of the circumstances, the parent is voluntarily impoverished. If the court finds that the parent is voluntarily impoverished, the court will consider the potential income of the parent to determine child support obligation. To calculate a voluntarily impoverished parent’s potential income, the court will consider factors including, but not limited to, the parent’s
- physical and behavioral condition;
- educational attainment;
- special training or skills;
- occupational qualifications and job skills;
- actual income from all sources;
- employment and earnings history;
- record of efforts to obtain and retain employment;
- criminal record and other employment barriers; and
- any other factor bearing on the parent’s ability to obtain funds for child support.
The court will also consider employment opportunities in the community where the parent lives, including
- the status of the job market;
- prevailing earnings levels; and
- the availability of employers willing to hire the parent.
While the codification of voluntary impoverishment and potential income appear to clarify the concepts and their application to child support obligations, we are still left with some questions. What will the courts consider to be adequate resources for purposes of voluntary impoverishment? And, are there additional factors courts will consider when determining a parent’s potential income? We anxiously await new, post- July 1, 2022 case law to help answer these questions. In the meantime, we are happy to help interpret this law and its implications for our clients.
For questions about this article, or any other family law related matter, please contact an attorney in our Family Law Practice Group.