Beyond Child Support: Understanding the “Variable Expense”
The purpose of a child support order is to cover the basic necessities, such as food, shelter and clothing for children. However, as many parents can attest, children need other things not associated with one household or another; these expenses are defined by the state legislature as “variable expenses.” When parents share placement of their children, variable expenses are generally also shared. Variable expense is broadly defined in the regulations, but it can be expanded and clarified by agreement of the parties, looking at the individual needs and interests of the parties and their children. Hawks Quindel family law attorneys recommend parents define variable expenses beyond the regulation to create clarity and help avoid future disputes.
There are three main challenges parents should consider when dealing with variable expenses: how to define what expenses will be included, considering a child’s changing needs over time, agreeing upon who will pay which expenses or what percentage of the overall total each parent will pay, and how parents will reimburse each other for these expenses.
Defining Variable Expenses
Variable expenses are defined 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.” Yet, as stated above, parents can create their own definition.
Clarity as to what counts as a variable expense can also help prevent future disagreements. For example, some parents want outerwear included as a variable expense since a child usually wears only one winter coat or one pair of boots at a time; such items, however, go beyond the basic definition in the regulations. Parents should also look ahead to expenses for transportation, such as the purchase of a car. Some parents want to pay for their child’s insurance and/or gas while others do not. These are conversations parents should generally have at the time they separate, divorce or establish paternity. To reduce misunderstandings, the definition should also be reviewed periodically, as the needs of their child change with age.
When the parents agree, modifications to the variable expense definition can be amended with a simple stipulation and proposed order. If parents disagree, they can agree to arbitrate or mediate the issue to avoid getting the court involved.
Dividing Variable Expenses
Similar to defining variable expenses, the courts lend flexibility to parents when determining how to divide the expense. The following are common methods of dividing variable expenses.
First, regulation provides that variable expenses be divided based upon the amount of time a parent has for placement. For example, if Parent A has the child 40% of the time, he or she would pay 40% of the variable expenses. While this method may seem simple, it is not always the best fit for parents, especially in situations where the difference in incomes between parents is significant. Therefore, parents and courts can move past the presumption and divide variable expenses in other ways.
Another method is to allocate all the variable expenses to one parent and the other parent pay a set monthly amount to cover his or her share. This system may work well for parents unable to effectively communicate because it provides the least number of topics over which to argue. Under this method, however, one parent must have the means to front all the variable expenses, which might not be the case for every situation. It also could be unfair to one parent if the expenses don’t match up over time with the monthly payments.
Alternatively, parents can divide variable expenses by the type of expense. For example: Parent A could pay for all the child’s school related activities, while Parent B covers the costs of the child’s car. Or the parents could alternate years covering an expense. Each family is different and tailoring the process to each family is particularly helpful to assure the children get what they need.
Finally, there may be variable expenses that one parent takes on his or her days. For instance, each parent could be responsible for his or her own day care expenses on that parent’s placement day so one parent could have grandma watch the child and the other have a day care setting and pay accordingly.
Related to expense division is expense amount. In order to avoid being blindsided by a large bill, parents may want to set an amount over which they must agree before incurring it. For example, parents can agree to consult the other parent for expenses over $200.
Reimbursing Variable Expenses
Regardless of how parents define and divide variable expenses, it is likely they will owe money one to the other. Hawks Quindel attorneys recommend establishing the frequency with which the parents will exchange written documents setting out the amount of the variable expense to be reimbursed.
For some parents, reimbursement within a couple days works best. While for others, paying the other parent monthly, quarterly, semi-annually, or even annually works. The reimbursement process will likely go smoothest when clear records are kept. This is especially important for longer reimbursement periods. Parents should individually look at their needs and try to reach an agreement regarding the timing and form of payments.
An option to avoid direct reimbursement between parents is to fund a shared variable expense account on an agreed schedule. This option works best when parents evenly split the expenses or the funding amount can mirror the parent’s obligation so there need not be periodic reconciliation due to overfunding or underfunding the account.
We Can Help
Variable expenses are too often overlooked when exploring the issues regarding support of a child. However, the expenses add up quickly and can be a reoccurring source of disagreement. Establishing clarity at the outset can help avoid confrontation and allow parents to discuss important things about their children, rather than argue about financial matters.
If you have questions about variable expenses or child support generally, please contact one of the Hawks Quindel family law attorneys by calling 414-271-8650 in the Milwaukee area or 608-257-0040 in the Madison area.
 DCF 150.02(29).