If you have ever seen “Better Off Dead” then you have seen the epic scene where John Cusack is chased down the street by the newspaper delivery boy on his bike demanding his two dollars. For two dollars in a cheesy ‘80s movie, it’s funny. When it is hundreds or thousands of dollars in reimbursable expenses that you have paid out of pocket for your children, it’s not so funny.
The vast majority of child support cases are what we call “Guidelines” cases, meaning the combined net income of the parents is less than $187,200 net (not gross) per year. In these cases, child support is set in accordance with the New Jersey Child Support Guidelines found at R. 5:6A, New Jersey Rules of Court Appendix IX-A Considerations In The Use Of Child Support Guidelines and Appendix IX-B Use Of The Child Support Guidelines. The Guidelines are largely a computer program that generates the child support number. The trick is to know what the correct figures are to put in the program in order to get the correct child support award.
While child support covers a lot—for a list of all the items child support is intended to cover, see http://www.judiciary.state.nj.us/attorneys/assets/rules/app9a.pdf paragraph 8 on page 8. You will be surprised at the non-exhaustive list that is included in appropriate uses of child support monies. However, not everything is covered by the Guidelines such that it is included in the Guideline figure. What this means is that the child support payment required under the Guidelines is not the end of the support obligations.
For example, under the Guidelines, Appendix IX-A, Paragraph 9 entitled “Expenses That May Be Added to the Basic Child Support Obligation”, the Court identifies expenses that can be added to the Guidelines and included in the “one and done” weekly payment as well as those that are “outside” the Guidelines, meaning that they still need to be paid, but are not included in the weekly child support obligation:
Because some child-related expenses represent large or variable expenditures or are not incurred by typical intact families, it is not appropriate to include them in the Appendix IX-F basic child support awards. The items listed below are not included in the Appendix IX-F child support awards. If incurred in a particular case, these expenses should be added to the basic support obligation.
- Predictable and Recurring Unreimbursed Health Care Expenses In Excess of $250 Per Child Per Year – Unreimbursed health-care expenses for a child in excess of $250 per child per year are not included in the schedules. Such expenses should be added to the basic obligation if they are predictable and recurring. Healthcare expenses for a child that exceed $250 per child per year that are not predictable and recurring should be shared by the parents in proportion to their relative incomes as incurred (i.e., the sharing of these expenses should be addressed in the general language of the order or judgment). Health care costs that are not included in the support award should be paid directly to the parent who made or will make the expenditure or directly to the provider of the health care (also, see N.J.S.A. 2A:34- 23b).
- Other Expenses Approved by the Court – These are predictable and recurring expenses for children that may not be incurred by average or intact families such as private elementary or secondary education, special needs of gifted or disabled children, and visitation transportation expenses. The addition of these expenses to the basic obligation must be approved by the court. If incurred, special expenses that are not predictable and recurring should be shared by the parents in proportion to their relative incomes (i.e., the sharing of these expenses should be addressed in the general language of the order or judgment). Special expenses not included in the award should be paid directly to the parent who made or will make the expenditure or to the provider of the goods or services. (Emphasis added).
How do you know if it is reimbursable outside of the Guidelines? It must not be “predictable and recurring”. Anything that IS “predictable and recurring” CAN be—but it not required to be—added to the basic obligation and included in the weekly support figure. (1)
A lot of cases do not have qualifying “predictable and recurring” expenses that can be added to the Guidelines, or at least are not identified as such. Therefore, it is very common to see an agreement or Order that provides that the custodial parent (a/ka/ PPR) will pay the first $250 per year per child of out-of-pocket medical expenses and anything beyond that is shared per the parties’ income percentages found on Line 7 of the Guidelines. What does this mean? It means that if you take your child to the doctor and there is a co-pay, this counts against the $250 per year per child hurdle. Any unreimbursed or uncovered medical dental, orthodontic, prescription and eye care expenses incurred for the child will count: co-pays, co-insurances, prescription costs, any expense not totally covered by insurance (for example, if eye insurance covers glasses but not contacts, the contacts would count), they all count.
How do you keep track? Every time you incur an expense for your child, keep a log and a folder of all of the receipts. Compare your receipts to your Explanation of Benefits (EOBs) from the insurance company and staple the corresponding receipts together. Anything you paid not covered by insurance counts. We recommend that you begin a new inventory and folder each January 1st and each quarter you and the other party exchange proofs of expenses paid, offset and equalize them.
For example, if in Quarter 1, you spent $500 for John because he had to go to Urgent Care over St. Patrick’s weekend, then the $250 hurdle has been met and the remaining $250 of that cost, along with every other unreimbursed expense incurred the remainder of the year, is subject to reimbursement at the other party’s income percentage. If that is 50/50, the other party owes you $125 (50% of the $250). However, if by November, you have only incurred $200 in expenses for Jane, the other party does not yet have to contribute because the $250 per year per child hurdle has not been met for her.
Offsetting and equalizing means that you and the other party compare what you have each spent. For example, if you have spent $1,000 on John and the other party has incurred $150 in expenses, then $250 comes “off the top” reducing the $1,000 to $750. Comparing that $750 to $150, there is a difference of $600 or $300 each. That means the other party needs to pay you $300 so that overall, you have each contributed $450 to the total of $900 in reimbursable costs. (Assuming a 50/50 income allocation).
If you have questions about reimbursable expenses, see an attorney before you leave money on the table and start demanding your $2!
Julie Burick, Esq. is a partner at Adinolfi, Molotsky, Burick & Falkenstein, P.A. who focuses her practices on all aspects of divorce and family law.