(FAinc * BasicCS * ((MOtime - Threshold) / ATtime)) minus (MOinc * BasicCS * ((FAtime - Threshold) / ATtime))
Where: FAinc = father’s income (ex: $40,000) MOinc = mother’s income (ex: $25,000) FAtime = percent of child’s time with father, on an annual basis (ex: 45%) MOtime = percent of child’s time with mother, on an annual basis (ex: 55%) Threshold defined by State of Montana = 30% ATtime = “above threshold” time remaining in the year (100% – (30% * 2) = 40%) BasicCS = the basic amount of child support that would be owed in a sole custody situation, if the that parent was the paying parent.
CS = ($40,000 * BasicCS * ((55% – 30%) / 40%)) minus ($25,000 * BasicCS * ((45% – 30%) / 40%))
In other states using the same formula, but with a different threshold, the formula would change
slightly, depending on the change in threshold. In Hawaii, which uses a threshold of 39 percent (shared
custody is considered to be “40 percent or above”), using the same parental income and time-share
example as above, the formula would look like this:
CS = ($40,000 * BasicCS * ((55% – 39%) / 22%)) minus ($25,000 * BasicCS * ((45% – 39%) / 22%))
The advantage of the above-threshold offset formula is that there are no cliff effects. Since the
mathematics of the formula do not begin the reduction calculation at zero time-share level, but rather at
the threshold, there is no opportunity for a cliff effect to be created. This can be seen in the plot of child
support orders on Figure 6, using the formulas from Montana and Hawaii.
Even at larger discrepancies of income, or higher income, in general, no large cliff effects result
from the use of above-threshold offset formulas. Appendices B1 through B6 show the computation of
child support amounts using the Montana formula (with a 30 percent time-share threshold) and Hawaii
(with a 39 percent time-share threshold), for six different income situations. Large cliff effects created by
changing time-share by one percentage point cannot be detected in any of these examples.
Given the positive features of the above-threshold offset formula, we have developed a possible
application of this formula for the State of Wisconsin. We have applied the above-threshold offset
formula to the Wisconsin basic level of child support, based on percentage standard guidelines, in