LRB-1720/1

SWB&EAW:cdc

2021 - 2022 LEGISLATURE

2021 Assembly BILL 104

February 18, 2021 - Introduced by Representatives Brooks, Brandtjen, Bowen, Dittrich, Gundrum, Moses, Mursau, Skowronski, Tusler and Wichgers, cosponsored by Senators Jacque and Ballweg. Referred to Committee on Family Law.

AB104,1,5 An Act to repeal 767.225 (1) (e); and to amend 565.30 (5m) (a), 767.34 (1), 767.35 (1) (c), 767.511 (6m), 767.531 (intro.), 767.54, 767.553 (1) (a), 767.59 (1), 767.61 (3) (i), 767.71 (1) (a), 767.73 (1) (a), 767.75 (1) (b), 767.77 (1) and 767.78 (1) of the statutes; relating to: calculating the child support obligation and elimination of family support.

Analysis by the Legislative Reference Bureau

This bill reorganizes certain aspects of the Department of Children and Families administrative rules relating to commonly used child support formulas in order to reflect current practices. The manner of calculating the amount of child support and the applicable formulas are not changed in the bill. The bill also makes statutory changes to eliminate future family support orders.

Under current DCF rules, the child support formula that applies in a shared physical placement arrangement is included among the formula for “special circumstances.” The bill moves the formula that applies in a shared physical placement arrangement to a new section of DCF's rules before all of the child support formula variations. The bill also specifies that, under DCF rules, the designated percentage that applies in a nonshared physical placement arrangement applies only if the conditions for the shared placement formula do not apply.

The bill creates a new defined term under the DCF rules for a “designated percentage,” to mean the applicable percentage of a parent's monthly income, or adjusted monthly income, that is available for child support. The “designated percentage” phrase is then used within the calculations for a shared-placement arrangement and circumstances of a serial-family parent, split-placement parents, and combinations of special circumstances.

The bill retitles the applicable DCF administrative code chapter from “Child Support Percentage of Income Standard” to “Child Support Standard.” The bill also removes the definition of the term “standard” or “percentage standard” from DCF's rules and moves a Note appended to the definition of “standard” in the DCF rules to the new definition of the “designated percentage.” The Note specifies that the standard is based on national studies and is adjusted downward to reflect costs incurred by a parent when a child is in the parent's care and costs to maintain a child's health insurance.

The bill moves the listing of the designated percentage amounts, and the standard that applies to a request for a deviation from the percentage standard, to be placed with and follow the shared physical placement arrangement formula under DCF's rules. The new section is titled, “Determining the child support obligation.” The bill also updates cross-references within the DCF rules to reflect the reorganization of the shared physical placement and designated percentage provisions.

In addition to the administrative code changes, the bill also changes the statutes to eliminate family support orders, providing that no new family support orders may be issued beginning on the bill's effective date. Family support orders issued before the bill's effective date would remain in effect and be subject to all provisions in current law that apply to family support orders, including provisions relating to calculating interest and the duties of DCF regarding application of payments received.

Under current law, family support is an alternative that combines the component parts of child support and maintenance in a single obligation, and is based upon the same criteria that apply to orders for child support and maintenance. Family support payments are treated as maintenance payments for federal and state tax purposes, so that the family support payment amount is deductible to the payor-spouse, and taxable to the recipient-spouse. However, under s. 11051 of the federal Tax Cuts and Jobs Act of 2017, maintenance payments are no longer deductible by the payor-spouse and are not included in income to the recipient-spouse. This change applies to any divorce or separation instrument executed after December 31, 2018. Divorce and separation instruments modified after the December 31, 2018, effective date are subject to prior law unless the modification expressly provides that the modified agreement be governed by the new law.

The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:

AB104,1 Section 1. 565.30 (5m) (a) of the statutes is amended to read:

AB104,3,14 565.30 (5m) (a) The administrator shall report to the department of children and families the name, address, and social security number of each winner of a lottery prize that is payable in installments and the name, address, and social security number or federal income tax number of the person who has been assigned a lottery prize that is payable in installments. Upon receipt of the report, the department of children and families shall certify to the administrator whether any payee or assignee named in the report is obligated to provide child support, spousal support, maintenance, or family support under s. 767.531, 2019 stats., or s. 767.001 (1) (f) or (g), 767.225, 767.34, 767.511, 767.531, 767.56, 767.804 (3), 767.805 (4), 767.85, 767.863 (3), 767.89 (3), 767.893 (2m), or 948.22 (7) or ch. 769 and the amount required to be withheld from the lottery prize under s. 767.75. Subject to par. (b), the administrator shall withhold the certified amount from each payment made to the winner or assignee and remit the certified amount to the department of children and families.

AB104,2 Section 2 . 767.225 (1) (e) of the statutes is repealed.