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Sample Calculations for Residential Credit Using The Betson Method and the Spring Method

Sample Calculations for Residential Credit Using The Betson Method and the Spring Method. Child Support Schedule Workgroup July 24, 2008. Factual Assumptions. Child is 10 Assume Dad = NCP because his income is higher Mom net income $2000 Dad net income $3000 Dad = 60% of income

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Sample Calculations for Residential Credit Using The Betson Method and the Spring Method

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  1. Sample Calculations for Residential CreditUsing The Betson Method and the Spring Method Child Support Schedule Workgroup July 24, 2008

  2. Factual Assumptions • Child is 10 • Assume Dad = NCP because his income is higher • Mom net income $2000 • Dad net income $3000 • Dad = 60% of income • Mom = 40% of income • BCSO = 443 Dad, 295 Mom = 738 total

  3. The Betson Formula • Residential credit = R x T x BCSO + (1 – S) x D x BCSO • R = % of overnights with NCP • T = proportion of the BCSO that is transferred between households when child changes residence (assume 40%) • S = NCP % of net income • D = duplicated expenses (assume 50%)

  4. Betson Formula for Residential Credit (R x .4 x BCSO) + [(1 – S) x .5 x BCSO]

  5. Betson Formula for NCP obligation [S x BCSO] – {[R x .4 x BCSO] + [(1 – S) x .5 x BCSO]}

  6. NCP Obligation when BCSO = 738 and NCP % of income = 60%(Betson) .60 x 738 – {[R x .4 x 738] + [(1 – .60) x .5 x 738]} = 442.8 – [295.2R + (.4 x .5 x 738)] OR 442.8 – [(R x 295.2) + 147.6]

  7. Child 100% with Mom(Betson) NCP obligation $443 (no residential credit)

  8. Child 90% with Mom(Betson) NCP obligation = [.60 x 738] – {[.1 x .4 x 738] + [(1 – .60) x .5 x 738]}= 442.8 – (29.52 + 147.6) = 442.8 – 177.12 = $265.8

  9. Child 80% with Mom(Betson) NCP obligation = .60 x 738 – {[.2 x .4 x 738] + [(1 – .60) x .5 x 738]}= 442.8 – (59.04 + 147.6) = $236.16

  10. Child 70% with Mom(Betson) NCP obligation = .60 x 738 – {[.3 x .4 x 738] + [(1 – .60) x .5 x 738]} = 442.8 – ( 88.56 + 147.6) = 442.8 – 236.16 = $206.64

  11. Child 60% with Mom(Betson) NCP obligation = .60 x 738 – {[.4 x .4 x 738] + [(1 – .60) x .5 x 738]} = 442.8 – (118.08 + 147.6) = 442.8 – 265.68 = $177.12

  12. Child 50% with Mom(Betson) NCP obligation = .60 x 738 – {[.5 x .4 x 738] + [(1 – .60) x .5 x 738]} = 442.8 – (147.6 + 147.6) = 442.8 – 295.2 = $147.60

  13. The Spring Method • Traditional “Cross Credit” Method • Direct costs = BCSO x % of overnights • % of overnights = R • S = % of income • Transfer payment = (S x BCSO) – (BCSO x R)

  14. Spring Formula for NCP obligation Transfer payment = (S x BCSO) – (BCSO x R) = (.6 x 738) – 738R = 442.8 – 738R

  15. Child 100% with Mom(Spring) (.6 x 738) – 738R = 442.8 – 0 = $443 (No residential credit)

  16. Child 90% with Mom(Spring) (.6 x 738) – 738R = 442.8 – 73.8 = $369.00

  17. Child 80% with Mom(Spring) (.6 x 738) – 738R = 442.8 – 147.6 = $295.20

  18. Child 70% with Mom(Spring) (.6 x 738) – 738R = 442.8 – 221.4 = $221.40

  19. Child 60% with Mom(Spring) (.6 x 738) – 738R = 442.8 – 295.2 = $147.60

  20. Child 50% with Mom(Spring) (.6 x 738) – 738R = 442.8 – 369 = $73.80

  21. Comparison –How Much Does Dad Pay?

  22. What if Mom makes more than Dad does? Scenario 1 (Betson) Assume R = 10% Transfer Payment = .4 x 738 – ( .1 x .4 x 738 + (.6 x .5 x 738) = 295.2 – (29.5 + 221.4) = $44.30

  23. What if Mom makes more than Dad does? Scenario 2 (Betson) Assume R = 20% S x BCSO = .4 x 738 = 295.2 R x T x BCSO = .2 x .4 x 738 = 59.04 (1-S) x D x BCSO = .6 x .5 x 738 = 221.4 295.2 – (59.04 + 221.4) = $14.76

  24. What if Mom makes more than Dad does? Scenario 3 (Betson) Assume R = 30% S x BCSO – { R x T x BCSO + (1-S) x D x BCSO} .4 x 738 = 295.2 .3 x .4 x 738 = 88.56 .6 x .5 x 738 = 221.4 295.2 – (88.56 + 221.4) = -14.76 Should there be a negative residential credit?

  25. What if Mom makes more than Dad does? Scenario 1 (Spring) Assume R = 10% (S x BCSO) – (BCSO x R) = (.6 x 738) – 738R = 442.8 – 738R = 442.8 – 73.80 = $369.00 Scenario 2 (Spring) Assume R = 20% (S x BCSO) – (BCSO x R) = (.6 x 738) – 738R = 442.8 – 738R = 442.8 – 147.60 = $295.20

  26. What if Mom makes more than Dad does? Scenario 3 (Spring) Assume R = 30% (S x BCSO) – (BCSO x R) = (.6 x 738) – 738R = 442.8 – 738R = 442.8 – 221.4 = $221.40 Scenario 4 (Spring) Assume R = 40% (S x BCSO) – (BCSO x R) = (.6 x 738) – 738R = 442.8 – 738R = 442.8 – 295.20 = $147.60

  27. What if Mom makes more than Dad does? Scenario 5 (Spring) Assume R = 50% (S x BCSO) – (BCSO x R) = (.6 x 738) – 738R = 442.8 – 738R = 442.8 – 369.0 = $73.80 This formula works the same no matter which parent has the higher monthly net income.

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