Long-term disability insurance (LTD) replaces a percentage of an individual’s wages if he or she has to leave the workforce for an extended period due to a disabling injury or illness. How LTD affects child support payments can depend on a number of factors, including how the benefits are taxed and whether the disability represents a change of income since initial child support orders vs. original child support calculations with long-term disability income. Since LTD is intended to directly replace a type of income that would ordinarily be used in computing child support, in most cases courts will consider LTD benefits in child support determinations. However, individuals who are struggling to manage their long-term disability benefits and child support obligations may have options for hardship modifications due to a change in circumstances, depending on the jurisdiction.
What Is the Biggest Factor in Calculating Child Support?
Each family and situation will be unique. Recognizing this truth, most states do allow family law judges some degree of latitude to make adjustments in applying the standard formula to child support determinations. Additionally, co-parents may be able to submit their own support agreements to the court overseeing their case. While family law judges generally have an obligation to make all decisions regarding child custody and support calculations based on the best interest of the child or children involved, often they will approve a support agreement submitted jointly by the parents, as long as the terms of the agreement appear fair and reasonable.
These important caveats notwithstanding, there are two main factors that any family court evaluating child support obligations will generally take into consideration. Individuals concerned about how LTD affects child support payments may find it useful to keep these same factors in mind as they try to make child support calculations with long-term disability income. The factors are:
- Parenting time
- Parental income
Child support determinations are typically based on a combination of each parent’s financial resources and the percentage of time each parent has the child in his or her home. The expectation in most cases is that the parent who has the child at home less will pay child support to the parent who has the child under their roof somewhat more. The payments are usually calculated to be proportionate to both the paying parent’s income and the way the child’s time is distributed between the two households.
How Does a Person on Disability Pay Child Support?
If you are living on LTD benefits and ordered to pay child support, you can generally make child support payments using any means available in your state, except for garnishment of wages by an employer. Some states have specific requirements for processing and recording child support payments, depending on how the initial child support case is opened.
How LTD Affects Child Support Payments: Planning Adjustments for Multiple Sources of Disability Income
One factor to keep in mind is that people performing child support calculations with long-term disability income are often juggling not just long-term disability benefits and child support payments, but also additional income sources. Patching together income from multiple sources is an important, but not convenient, aspect of financial management for many people receiving LTD benefits. Depending on what other types of income you receive, you may wish to consider investigating whether there is an option in your state to have the court-ordered amount automatically deducted from your account on a recurring basis.
Can Long-Term Disability Benefits Be Garnished?
The most common form of garnishment used in child support enforcement applies to wages. In this model, there are typically two court orders at work: one directing the paying parent to pay a specified amount on a regular schedule, and another directing the paying parent’s employer to deduct that amount from the parent’s wages each pay period. Usually this means that the amount garnished from wages will be deposited directly to the receiving parent’s account, through whatever system is established for managing child support payments in the state with jurisdiction over the child support case.
When courts consider LTD benefits in child support determinations, obviously wage garnishment by way of the paying parent’s employer is not an option. However, the LTD benefits themselves will likely still be subject to garnishment for child support. The procedural norms as well as the financial management systems in place can vary somewhat depending on jurisdiction, but broadly speaking family courts tend to be more disposed to order garnishment when a parent has a history of late payments, or when the parent has shown a reluctance to include their LTD benefits in child support calculations. If avoiding garnishment is an important consideration in your financial management strategies concerning long-term disability benefits and child support, then you may want to speak with an attorney who can help you develop proactive financial planning measures you may be able to take to demonstrate to the court your willingness to be accountable for meeting your child support obligations on time and on the schedule directed by the court’s order.
Is Disability Income Considered Income for Child Support Calculations?
Some of the most common questions concerning long-term disability benefits and child support turn on whether parental income from disability benefits is considered income for the purpose of making child support calculations. The answer to the underlying query is usually yes, courts typically will include LTD benefits in child support determinations. However, there are a few additional considerations that individuals evaluating how LTD affects child support payments may wish to keep in mind.
Social Security and Child Support
As with garnishment of LTD benefits for child support, the picture of a parent’s income may be complicated by individual factors. One of the most common of these factors is the presence of income from other sources, such as workers’ compensation disability payments, Social Security Disability Insurance (SSDI), and Supplemental Security Income (SSI).
Guidelines for what to include in child support calculations with long-term disability income alongside other sources are state-specific, but as a general rule income from sources based on previous earnings or individual work history, such as workers’ compensation or SSDI benefits, will likely be computed as part of parental income along with LTD benefits in child support determinations. A strictly need-based form of income like SSI may not be subject to the same calculations. Educational grants or similar resources obtained to aid in retraining for a new career that better accommodates your disability may also be exempt, but you may wish to consider speaking with a disability law attorney in your state who can evaluate the specifics of your situation.
Taxable vs. Non-Taxable LTD Benefits in Child Support Calculations
There are two main reasons why the taxable vs. non-taxable status of your disability benefits may factor into how LTD affects child support payments in your particular situation. The first reason is that tax withholdings may sometimes impact the total amount computed in child support calculations with long-term disability income. These tax obligations can be complicated in their own right, so consider reviewing your policy and especially how your premium payments were handled prior to disability with the assistance of an attorney or accountant for case-specific guidance.
The second reason is that tax refunds are generally eligible for garnishment. The taxable vs. non-taxable status of your LTD benefits can therefore indirectly affect child support payments, particularly if the change in your income has resulted in a sharp disparity between your tax withholdings and your tax-eligible income for a given year. Generally, you are unlikely to receive any tax refunds as long as you owe any arrears outstanding on your child support calculations with long-term disability income.
Plan Carefully for Child Support Calculations With Long-Term Disability Income
If you have a child who spends significant time with their other parent, you may be ordered to pay child support to help cover the cost of raising your child. Financial management strategies for balancing long-term disability benefits and child support can be challenging, even for the most devoted parents. Usually, courts will consider LTD benefits in child support determinations, but how LTD affects child support payments can depend on a number of factors. Although the specifics of child support calculations with long-term disability income will depend on the factors present in your case, simply recognizing some of the most common factors that are likely to be considered can set you on the path toward estimating your own child support calculations with long-term disability income.
