BILL ANALYSIS �
AB 2393
Page 1
Date of Hearing: April 17, 2012
ASSEMBLY COMMITTEE ON JUDICIARY
Mike Feuer, Chair
AB 2393 (Davis) - As Amended: March 29, 2012
PROPOSED CONSENT
SUBJECT : CHILD SUPPORT: LOW-INCOME ADJUSTMENT TO THE
GUIDELINE
KEY ISSUE : SHOULD THE LOW-INCOME ADJUSTMENT TO THE CHILD
SUPPORT GUIDELINE, WHICH HAS NOT BE INCREASED SINCE IT WAS FIRST
ESTABLISHED 20 YEARS AGO, BE INCREASED TO REFLECT INFLATION?
FISCAL EFFECT : As currently in print this bill is keyed fiscal.
SYNOPSIS
This bill, sponsored by the Western Center on Law and Poverty,
seeks to provide greater fairness to low-income obligors and to
ensure that child support orders are more accurately established
in California by increasing the low-income adjustment to the
child support guideline. As required by federal law, California
has a statutory guideline - a mathematical formula - to
calculate a noncustodial parent's child support obligation. To
help ensure that low-income obligors are able to pay their child
support obligation, the guideline contains a presumptive
low-income adjustment which reduces the support obligation for
obligors with monthly income (after taxes and a few other
mandatory payments) below $1,000. The low-income adjustment has
not been increased since it was first introduced in 1993. This
bill increases the low-income adjustment to $1,500 and makes it
subject to further adjustments based on inflation. The bill is
supported by studies from both the Judicial Council and the
Urban Institute and the increase is consistent with inflation.
There is no opposition to this measure.
SUMMARY : Increases the low-income adjustment to the child
support guideline. Specifically, this bill
1)Increases the maximum low-income obligor adjustment to the
child support guideline from less than $1,000 net disposable
income per month to less than $1,500 net disposable income per
month, adjusted annually for cost of living increases.
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2)Requires the Judicial Council, on March 1, 2013 and annually
thereafter, to update the low-income adjustment based on the
California Consumer Price Index (CPI), as specified.
EXISTING LAW :
1)Establishes a uniform, statewide guideline for calculating
child support, based on the income of both parents and the
time they each spend with the child. (Family Code Section
4055. Unless stated otherwise, all further references are to
that code.)
2)Creates a rebuttable presumption that an obligor with net
disposable income, as defined, of less than $1,000 a month is
entitled to a low-income adjustment to his or her child
support obligation. Provides that the presumption may be
rebutted by evidence showing that application of the
adjustment would be unjust or inappropriate in the particular
case. Provides that the low-income adjustment reduces the
guideline child support obligation by an amount no greater
than the amount calculated by multiplying the child support
amount by a fraction, the numerator of which is 1,000 minus
the obligor's net disposable income per month, and the
denominator of which is 1,000. (Section 4055(b)(7).)
3)Requires the Judicial Council to periodically review the
guideline, as specified. (Section 4054.)
COMMENTS : As required by federal law, California has a
statutory guideline - a mathematical formula - to calculate a
noncustodial parent's child support obligation. To help ensure
the low-income obligors are able to pay their child support
obligation, the guideline contains a presumptive low-income
adjustment which reduced the support obligation for obligors
with monthly income (after taxes and a few other mandatory
payments) below $1,000. Regardless, the low-income adjustment
does not apply if doing so would be unjust or inappropriate in a
particular case. The low-income adjustment has not been
increased since it was originally established in 1993.
This bill, sponsored by the Western Center for Law and Poverty,
seeks to raise the low-income adjustment to the child support
guideline from $1,000 net income a month to $1,500 net income a
month. In support of the bill, the author states:
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The current formula used by the California Department of
Child Support Services �DCSS] that determines child support
orders is outdated. In an effort to improve compliance for
low-income parents that are obligated to pay child support,
a work group including the DCSS and the Judicial Council of
California's Administrative Office of the Courts, concluded
that a revision to the low-income adjustment threshold of
$1,000 needed to be increased to $1,500 and cost-of-living
adjustment needed to adjust annual with the Consumer Price
Index. This bill revises the low-income threshold and
includes an annual cost-of-living adjustment making the
formula more income sensitive and enabling parents to meet
their payment obligations.
How the Low-Income Adjustment Works : When applicable, the
low-income adjustment reduces, on a sliding scale, the support
obligation. Suppose a support obligation, calculated under the
guideline is, for simplicity, $100. The order calculated with
the low income adjustment will be $100 if the obligor has a net
monthly income of $1,000, $75 if the obligor's income is $750,
and $50 if the obligor's income is $500.
If the low-income adjustment increases to $1,500 a month, the
support obligation for a $100 order will be $100 if the
obligor's net monthly income is $1,500, $67 if the obligor
income is $1,000, $50 if the obligor's income is $750, and $33
if the obligor's income is $500.
Studies by the Judicial Council and the Urban Institute
Demonstrate the Need for This Bill : Over $19 billion in
uncollected child support is owed to families using the state
child support agency to help collect their support. As required
by federal law, the guideline must be reviewed every four years,
and state law directs the Judicial Council to conduct the
review. The last three reviews conducted by the Judicial
Council recommended increasing the low-income adjustment.
In 2003, the Urban Institute reviewed the collectibility of
child support debt owed in California on behalf of DCSS and
determined that much of the debt was not collectible, in large
part because most of the debt was owed by low-income obligors
who would likely never be able to repay it. (Elaine Sorensen,
Examining Child Support Arrears in California: The
Collectibility Study (Urban Institute, 2003).) The study
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examined, among other things, the low-income adjustment and
determined that:
Although we were unable to examine this issue ourselves,
the Judicial Council of California did a thorough review of
California's child support guideline in 2001. One of their
recommendations was to make the low-income adjustment in
the guideline presumptive to ensure that it is used. They
found that only 6 percent of obligors eligible for a
low-income adjustment actually received one in 1999. We
did find, however, that one of the primary factors
contributing to arrears in California is high child support
orders on low-income obligors. Making the low-income
adjustment presumptive should help in this regard.
Additionally, the low-income adjustment has not been
revised since it was established nearly a decade ago. It
should be reviewed for possible adjustment.
(Id. at Executive Summary - 20 (footnote omitted).) The
adjustment was made presumptive by AB 1752 (Committee on
Budget), Chap. 225, Stats. 2003, but was not increased.
A Working Group Convened by DCSS and the AOC Recommends
Increasing the Low-Income Adjustment : After the latest Judicial
Council review, a workgroup led by DCSS and the Administrative
Office of the Courts met and reached consensus that the
low-income adjustment in California was too low relative to
other states and was inadequate. The group recommended that the
low-income adjustment be increased to $1,500 and then indexed to
inflation. This bill does both those things.
Increase in the Low-Income Adjustment is Consistent With
Inflation : The low-income adjustment has never been increased
since it was first established at $1,000 in 1993. According to
the U.S. Bureau of Labor Statistics, if $1,000 in 1993 was
adjusted for inflation, it would represent $1,576 in today's
dollars. Thus, this bill's increase to $1,500 is entirely
consistent with inflation.
ARGUMENTS IN SUPPORT : In support of the bill, the bill's
sponsor, the Western Center on Law and Poverty, writes:
According to �DCSS], consistent payment of support by
low-income obligors is better met if the order is
"right-sized." A right-sized order would enable obligors
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to successfully meet their obligations and provide more
consistent child support payments, improving the income
stream for families, promoting family self-sufficiency and
improving overall wellbeing of children living in
single-parent households.
REGISTERED SUPPORT / OPPOSITION :
Support
Western Center on Law and Policy (sponsor)
Opposition
None on file
Analysis Prepared by : Leora Gershenzon / JUD. / (916) 319-2334