BILL ANALYSIS �
AB 2393
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 2393 (Davis)
As Amended June 18, 2012
Majority vote
-----------------------------------------------------------------
|ASSEMBLY: |73-0 |(May 10, 2012) |SENATE: |37-0 |(August 23, |
| | | | | |2012) |
-----------------------------------------------------------------
Original Committee Reference: JUD.
SUMMARY : Increases the low-income adjustment to the child
support guideline. Specifically, this bill :
1)Increases, until January 1, 2018, 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.
2)Requires the Judicial Council, on March 1, 2013 and annually
thereafter until January 1, 2018, to update the low-income
adjustment based on the California Consumer Price Index (CPI),
as specified.
The Senate amendments add the January 1, 2018 sunset.
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.
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
AB 2393
Page 2
denominator of which is 1,000.
3)Requires the Judicial Council to periodically review the
guideline, as specified.
AS PASSED BY THE ASSEMBLY , this bill was substantially similar
to the version approved by the Senate.
FISCAL EFFECT : According to the Senate Appropriations analysis,
this bill will likely result in state revenue loss in some cases
and increased revenue in others, as determined by the behavior
of affected individuals.
Increased number of child support payments : To the extent that
this bill increases the number of child support payments made,
it will increase revenue to the state when the payee is a
CalWORKs participant. Increasing the number of child support
payments for which the state is involved will also help the
state's Department of Child Support Services (DCSS) meet federal
performance requirements and avoid penalties.
Decreased amount of child support payments : To the extent that
this bill decreases the amount of support paid to individual
CalWORKs participants, there will be a revenue loss to the
state.
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:
The current formula used by the California Department of
Child Support Services �DCSS] that determines child support
AB 2393
Page 3
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.
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.
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
examined, among other things, the low-income adjustment and
determined that:
Although we were unable to examine this issue ourselves,
AB 2393
Page 4
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.
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, but sunsets them on January 1, 2018.
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.
Analysis Prepared by : Leora Gershenzon / JUD. / (916) 319-2334
FN: 0004551