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401(k) Contributions and Child Support

401(k) Contributions and Child Support

The Indiana Child Support Guidelines were instituted to provide a consistent statewide standard for courts to follow when issuing orders for child support in divorce or paternity cases, such that the orders are both fair and consistent for all persons in similar circumstances.1 Pursuant to the Indiana Code § 31-16-6-1, child support orders should be based on a number of factors, including: each parent’s financial resources and needs, the standard of living the child would have enjoyed had the marriage not been dissolved, the physical and mental health needs and costs thereto for the child, and the child’s educational needs.2

The Indiana Child Support Guidelines employs the Income Shares Model, which attempts to apportion the cost of rearing the child(ren) to each parent within their individual financial abilities. First, the gross weekly income of each parent is added to the Child Support Worksheet, then other variables, such as day care costs, costs of health insurance, and the number of overnights a child spends with each parent are factored in.

Gross weekly income differs from net weekly income. Generally, net weekly income is what you deposit into your bank account each week from your paycheck after all deductions, such as taxes, employer health care plans, and 401(k) investments, are taken out, and the funds you have available to pay for your personal expenses. Gross weekly income is your base pay before any deductions. It is important to consider the difference between these two values, because Indiana’s Child Support Guidelines considers a parent’s income before taxes and other deductions are taken from a paycheck. This may seem counterintuitive in that if parents remained together, and did not have a child support order, they would provide for the costs of rearing a child with the funds they have available from his or her net income.

While taxes are something that cannot be avoided, and Indiana does provide an offset for the parent who pays for health insurance for the child(ren), other types of deductions are not considered under Indiana’s current child support calculation formula.

For example, in a recently decided Indiana Court of Appeals case, Nikolayev v. Nikolayev, Father voluntarily increased his contributions to a 401(k) plan provided through his company, as his income increased throughout the marriage.3 Because of Father’s voluntary contributions to his retirement fund, the parties maintained relatively the same lifestyle over the years, despite Father’s substantial increases in income. During the pendency of the parties’ divorce, Father was contributing upwards of $1,700 towards his 401(k) plan weekly.

At trial, Father presented the argument that even though his gross weekly income included the approximately $1,700 per week, it should not be considered for child support calculation purposes because he had always withheld those funds from his family’s expendable income through the marriage, and thus, those funds were never used to establish a certain standard of living for his children. The trial court disagreed with Father’s argument, and included his 401(k) contributions in his gross weekly income, and therefore were considered for purposes of calculating his child support.

Father appealed, and the Court of Appeals affirmed the trial court’s decision to include the 401(k) contributions to Father’s gross weekly income. The Court of Appeals reasoned that even though the Income Shares Model presupposes that the child(ren) of the parties maintain the same standard of living as before the parties separated, and the funds Father contributed to his 401(k) were never used to support the children’s standard of living during the marriage, nonetheless, these funds were part of Father’s gross income, and his contributions were entirely voluntary. Therefore, the Court of Appeals considered the plain language of the Indiana Child Support Guidelines, which requires the trial court to use gross weekly income as a basis for calculating child support.

In light of the Nikolayev opinion, the Court of Appeals has set a precedent in Indiana that voluntary deductions from a parent’s paycheck may not be excluded from the parent’s gross weekly income for purposes of calculating child support.

We hope that this blog post has been helpful in giving you some insight into the Indiana Child Support Guidelines and Child Support calculations in Indiana. Ciyou & Dixon, P.C. practices throughout the state of Indiana. This blog post was written by attorney, Lori Schmeltzer.


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Based in Indianapolis and founded in 1995, Dixon & Moseley, P.C. is a niche law firm focused on successfully dealing with the complexities of divorce, high-conflict child custody and family law. Known for their ability to solve extremely complex situations with high quality work and responsiveness, Dixon & Moseley, P.C. will guide you every step of the way. The family law attorneys at Dixon & Moseley, P.C. will help you precisely identify your objectives and the means to reach your desired result. Life is uncertain. Be certain of your counsel. Indianapolis Divorce Attorneys, Dixon & Moseley, P.C.

Indianapolis Divorce Attorneys, Dixon & Moseley, P.C. of Indianapolis, Indiana, offers legal services for Indianapolis, Zionsville, Noblesville, Carmel, Avon, Anderson, Danville, Greenwood, Brownsburg, Geist, Fortville, McCordsville, Muncie, Greenfield, Westfield, Fort Wayne, Fishers, Bloomington, Lafayette, Marion County, Hamilton County, Hendricks County, Allen County, Delaware County, Morgan County, Hendricks County, Boone County, Vigo County, Johnson County, Hancock County, and Tippecanoe County, Indiana.