Military Benefits and Their Potential Effects on Child Support Calculations
Pursuant to the Child Support Guidelines, benefits that reduce living expenses generally should be included in a party’s gross income. For this reason, special care should be given in a case involving an active member of the military or reserve military who has been activated. The individual may be receiving a Basic Allowance for Sustenance (BAS) or a Basic Allowance for Housing (BAH). In both of these instances the military member’s living expenses are reduced by this cash benefit. A Leave and Earnings Statement is the equivalent of a paystub for a member of the military. You can find explanations of the Leave and Earning Statements and the information they provide at these websites: http://m.militaryonesource.mil/pfm?content_id=269406; http://militaryfamily.about.com/od/moneyandfinances/a/LES-For-Active-Duty.htm; http://militaryfamily.about.com/od/moneyandfinances/a/Les-For-Reserve-And-Guard.htm. Such statements indicate whether the member is receiving a BAS or BAH. These benefits need to be considered when calculating child support. Similarly, a military member may be provided with housing on base. In that situation it may be appropriate to impute income to the military member for the reduction of living expenses. You may argue that the amount of BAH for that are could be imputed as tax free income. See http://militarypay.defense.gov/pay/tax/01_allowances.html for an explanation of the federal tax benefit. In Indiana you must also consider that the allowance may not be subject to other taxes.
Military benefits like the BAH and BAS present further issues to be addressed when considering the child support calculation. For example, the BAH varies based upon the location of the military member to account for differences in cost of living expenses (see http://www.defensetravel.dod.mil/site/bahCalc.cfm). For this reason, an argument can be made that any BAH income should be adjusted if the military member is stationed in a location that has a higher cost of living than the location where the child support order is being entered, and vice versa. Furthermore, both BAS and BAH are tax-free benefits. This should also be considered when addressing the child support calculation and an adjustment for the actual applied tax rate may be appropriate as the child support guidelines in Indiana presume a tax rate of 21.88%.
Once a child support order is entered, if the payor is a member of the military, an Income Withholding Order should be sent to Defense Finance and Accounting Service so the support is automatically withheld from the payor’s paycheck. See http://www.dfas.mil/garnishment/childsupportalimony/startpayment.html
Prepared by Megan Gehring and Richard A. Mann of Mann Law, P.C. Attorneys at Law, www.rmannlawoffice.com
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