When do “variable costs” apply in Wisconsin?
- What are “variable costs?” Wisconsin DCF 150 (29) defines “variable costs” as the reasonable costs above basic support costs incurred by or on behalf of a child, including but not limited to the cost of child care, tuition, a child’s special needs, and other activities that involve substantial cost.
2. When do “variable costs” apply? Under Wisconsin DCF 150.04 (6), variable costs apply if the parents have a combination of split-placement and shared-placement.
3. How are “variable costs” calculated? Under Wisconsin DCF 150.04 (6) 5, they are calculated as follows; “In addition to the child support obligation determined under subd. 4., the court shall assign responsibility for payment of the child’s variable costs in proportion to each parent’s share of physical placement, with due consideration to a disparity in the parent’s incomes. The court shall dirrect the manner of payment of a variable cost order to be either between the parents or from a parent to a third-party service provider. The court shall not direct payment of variable costs to be made to the department or the department’s designee, except as incorporated in the fixed sum or percentage expressed child support order.”
4. When do “variable costs” not apply?” If a parent has primary placement, defined as having placement generally counted as overnights for 75% of the time, and that parent is receiving the full percentage order for the support of a child, 17% of non custodial parent’s gross monthly income for 1 child, 25% of gross for 2 children, 29% for 3 children, 31% for 4 children and capped at 34% for 5 or more children, you don’t in addition to getting the full amount in child support, have the non custodial parent pay for or contribute to variable expenses. It is only in situations where the parties share or have equal placement of the children where variable costs come into play.
5. What is not a variable cost? Health insurance and uninsured/unreimbursed medical and health care expenses are not variable costs. They must be dealt with separately under the law where there are minor children, but do not fall in the category of “variable costs.” Child support covers necessities, such as clothing, food and shelter. “Variable costs,” covers a myriad of other child expenses including, but not limited to, school activities and costs, camp, and other extra-curricular activities.
6. How do you agree to pay for “variable costs?” It is best to use language in a settlement agreement as part of getting a divorce on what constitutes a variable cost, placing a dollar limit on any one single item that the parties must agree to the activity or item first, and a plan for reimbursement, such as quarterly exchanges of invoices and receipts for reimbursement.
If you have questions on child support in the state of Wisconsin or how “variable costs” works, contact the experienced family lawyers at Karp & Iancu, S.C. today.