Modification After Opting Out of the CSSA

Recent amendments to DRL ' 236 Part B(9)(b) have changed the grounds for modifying a child support award. These changes have caused a profound shift in whether, and under what circumstances, parties should opt out of the Child Support Standards Act (CSSA).

By opting out of the CSSA, the rigid income formula used to calculate child support does not apply, allowing the parties to reach their own agreement on an appropriate amount of support. To properly opt out of the CSSA, a settlement agreement must contain: 1) an acknowledgment that the parties have been advised of the substance of the CSSA; 2) a statement that the basic child support pursuant to the CSSA would presumptively result in the correct amount of child support; 3) a calculation of what the CSSA basic child support payment would have been in the specific circumstances presented, and; 4) the reasons why the agreed-upon child support deviates from that set forth in the CSSA. DRL 240(1-b)(h); Gallet v. Wasserman, 280 A.D.2d 296 (1st Dep't 2001).

However, by opting out of the CSSA, the parties also lose the flexibility to easily modify the amount of child support every few years, as authorized by the new amendments to Domestic Relations Law (DRL) ' 236 Part B(9)(b)(2)(ii) (the amendment). The amendment provides that “unless the parties have specifically opted out of the following provisions in a validly executed agreement or stipulation entered into between the parties, the court may modify an order of child support where: (A) three years have passed since the order was entered, last modified or adjusted; or (B) there has been a change in either party's gross income by fifteen percent or more since the order was entered, last modified, or adjusted.” Thus, the amended law now accounts for normal fluctuations in income and expenses, even if they do not rise to the level of an “unanticipated” and “unreasonable” change in circumstances warranting modification of support.

The amendment does not apply where the parties have opted out of the CSSA. See Murphy v. Murphy, 24 A.D.3d 330 (1st Dep't 2005) (“the court properly declined to refer to the [CSSA] ' since the parties had explicitly agreed not to be bound by its provisions for determining the basic child support obligation”); People v. Aaronson, 285 A.D.2d 566, 567 (2d Dep't 2001) (holding court erred in applying CSSA to calculate child support where parties previously opted out of CSSA); Seda v. Seda, 270 A.D.2d 475, 476 (2d Dep't 2000) (reversing upward modification of child support where parties opted out of CSSA and plaintiff failed to establish that the agreement was unfair or inequitable at the time that it was made or that there was an unanticipated and unreasonable change in circumstances.)

By excluding opt-out settlements from the CSSA's purview, the law remains consistent with the long-standing policy encouraging settlements. If the law had not allowed parties to opt out, it would have effectively eliminated the ability to settle for anything other than statutory terms. But the amendment adds a new element to the decision making process when parties are considering opting out of the CSSA in favor of determining their own child support amounts.

Considering the Consequences

If the parties opt out of the CSSA, not only are they deprived of the benefit of the amendment, but the Family Court actually lacks jurisdiction to modify the settlement on that basis. This is because Family Court is a court of limited jurisdiction and only has the authority expressly granted to it. The Family Court Act grants jurisdiction to the Family Court to modify child support where three years have passed or if there is a change of income of at least 15%, but only if the parties have not opted out of the CSSA. See McKinney's Family Court Act ' 451(2)(b) (providing continuing jurisdiction over support proceedings to modify child support where three years have passed or a change in income, “unless the parties have specifically opted out” of the CSSA):

The Family Court also lacks jurisdiction to determine whether the opt-out complies with the statutory requirements or to otherwise change the settlement unless there has been a substantial change in circumstances. Practically speaking, a settlement may contain a statutorily deficient opt-out, which would allow application of the amendment. But, because the Family Court is of limited jurisdiction, it doesn't have the jurisdiction to declare the opt-out ineffective and therefore cannot apply the amendment. For example, in Savini v. Burgaleta, 34 A.D.3d 686 (2d Dep't 2006), the parties entered into a child support stipulation that was subsequently incorporated but not merged into a judgment of divorce. In connection with an enforcement proceeding, the Support Magistrate determined that the stipulations did not comply with the CSSA and informed the parties that the issue would be considered de novo. The Second Department overturned the Support Magistrate's findings stating: Nowhere in the Constitution, in the Family Court Act, or in the judgment of divorce itself, is the Family Court empowered, in effect, to invalidate a stipulation incorporated into the judgment of divorce entered by the Supreme Court ' . Had either party questioned the legality of the stipulation, the issue should have been determined by the Supreme Court, which had issued the judgment in which the stipulation was incorporated.

Savini, 34 A.D.3d at 689; see also Perrego v. Perrego, 63 A.D.3d 1072, 1073 (2d Dep't 2009) (“Family Court has no power to review a Supreme Court judgment determining the issue of child support or to determine the issue of child support de novo where the issue already has been determined by the Supreme Court and set forth in a judgment”); Huddleston v. Huddleston, 14 A.D.3d 511, 512 (2d Dep't 2005) (holding Family Court lacked jurisdiction to determine whether opt-out of CSSA in settlement agreement was defective).

Where there has been an opt-out, the Family Court can only modify a settlement that has been approved by the Supreme Court where there is a substantial change in circumstances. See Malone v. Malone, — N.Y.S.2d—, 2011 WL 2040389, *1 (N.Y. App. Div. 3d Dep't May 26, 2011) (“Family Court is authorized to modify an agreement pertaining to child support, which has been incorporated but not merged into a judgment of divorce issued by Supreme Court, only upon a showing that a change in circumstances warrants such modification.”). This standard, however, requires more than a mere change in income because, where the parties have included child support provisions in a separation agreement, courts assume that the parties anticipated the future needs of the child and adequately provided for them. Boden v. Boden, 42 NY2d 210, 213 (1977). Absent a showing of unanticipated and unreasonable change in circumstances the support provisions should not be disturbed. Id. As a general matter, changes in income and the cost of food, clothing and shelter, without more, do not warrant a change in child support. See Friedman v. Friedman, 65 A.D.3d 1081 (2d Dep't 2009) (holding “increase in the defendant's income does not constitute an unanticipated change in circumstances justifying an increase in his child support obligation.”); Patten v. Patten, 203 A.D.2d 441, 443 (2d Dep't 1994) (“courts generally do not modify an agreement with respect to child support based merely upon a parent's increased income” (quoting Brevetti v. Brevetti, 182 A.D.2d 606, 608 (2d Dep't 1992)).

Conclusion

Practitioners need to consider the Family Court's limited jurisdiction when seeking a modification of a child support order, or efforts at altering the agreement may be wasted by petition to the wrong forum.

Going forward, practitioners should discuss with their clients the impact of the amendment while evaluating whether to opt out of the CSSA. This inquiry is more important than ever because, if the parties opt out as part of a settlement, the parties give up the opportunity to have the amount of child support re-evaluated periodically. In making this determination, the age of the dependent children will take on additional weight. If the dependent child is a teenager, so that child support payments will end soon, the benefit of the amendment is relatively minor. But, if the dependent child is young, by opting out of the CSSA, the parent may forego the ability to regularly update the amount of child support. This may prove to be a major disadvantage when fairness dictates the child should receive more (or less) support, due to a change in a parent's income, yet that change cannot be said to “substantial.”

Carol W. Most, a member of this newsletter's Board of Editors, is a partner at Carol W. Most & Associates, P.C., in White Plains. Adam Schneid is an associate with the firm.

Recent amendments to DRL ' 236 Part B(9)(b) have changed the grounds for modifying a child support award. These changes have caused a profound shift in whether, and under what circumstances, parties should opt out of the Child Support Standards Act (CSSA).

By opting out of the CSSA, the rigid income formula used to calculate child support does not apply, allowing the parties to reach their own agreement on an appropriate amount of support. To properly opt out of the CSSA, a settlement agreement must contain: 1) an acknowledgment that the parties have been advised of the substance of the CSSA; 2) a statement that the basic child support pursuant to the CSSA would presumptively result in the correct amount of child support; 3) a calculation of what the CSSA basic child support payment would have been in the specific circumstances presented, and; 4) the reasons why the agreed-upon child support deviates from that set forth in the CSSA. DRL 240(1-b)(h); Gallet v. Wasserman , 280 A.D.2d 296 (1st Dep't 2001).

However, by opting out of the CSSA, the parties also lose the flexibility to easily modify the amount of child support every few years, as authorized by the new amendments to Domestic Relations Law (DRL) ' 236 Part B(9)(b)(2)(ii) (the amendment). The amendment provides that “unless the parties have specifically opted out of the following provisions in a validly executed agreement or stipulation entered into between the parties, the court may modify an order of child support where: (A) three years have passed since the order was entered, last modified or adjusted; or (B) there has been a change in either party's gross income by fifteen percent or more since the order was entered, last modified, or adjusted.” Thus, the amended law now accounts for normal fluctuations in income and expenses, even if they do not rise to the level of an “unanticipated” and “unreasonable” change in circumstances warranting modification of support.

The amendment does not apply where the parties have opted out of the CSSA. See Murphy v. Murphy , 24 A.D.3d 330 (1st Dep't 2005) (“the court properly declined to refer to the [CSSA] ' since the parties had explicitly agreed not to be bound by its provisions for determining the basic child support obligation”); People v. Aaronson , 285 A.D.2d 566, 567 (2d Dep't 2001) (holding court erred in applying CSSA to calculate child support where parties previously opted out of CSSA); Seda v. Seda , 270 A.D.2d 475, 476 (2d Dep't 2000) (reversing upward modification of child support where parties opted out of CSSA and plaintiff failed to establish that the agreement was unfair or inequitable at the time that it was made or that there was an unanticipated and unreasonable change in circumstances.)

By excluding opt-out settlements from the CSSA's purview, the law remains consistent with the long-standing policy encouraging settlements. If the law had not allowed parties to opt out, it would have effectively eliminated the ability to settle for anything other than statutory terms. But the amendment adds a new element to the decision making process when parties are considering opting out of the CSSA in favor of determining their own child support amounts.

Considering the Consequences

If the parties opt out of the CSSA, not only are they deprived of the benefit of the amendment, but the Family Court actually lacks jurisdiction to modify the settlement on that basis. This is because Family Court is a court of limited jurisdiction and only has the authority expressly granted to it. The Family Court Act grants jurisdiction to the Family Court to modify child support where three years have passed or if there is a change of income of at least 15%, but only if the parties have not opted out of the CSSA. See McKinney's Family Court Act ' 451(2)(b) (providing continuing jurisdiction over support proceedings to modify child support where three years have passed or a change in income, “unless the parties have specifically opted out” of the CSSA):

The Family Court also lacks jurisdiction to determine whether the opt-out complies with the statutory requirements or to otherwise change the settlement unless there has been a substantial change in circumstances. Practically speaking, a settlement may contain a statutorily deficient opt-out, which would allow application of the amendment. But, because the Family Court is of limited jurisdiction, it doesn't have the jurisdiction to declare the opt-out ineffective and therefore cannot apply the amendment. For example, in Savini v. Burgaleta , 34 A.D.3d 686 (2d Dep't 2006), the parties entered into a child support stipulation that was subsequently incorporated but not merged into a judgment of divorce. In connection with an enforcement proceeding, the Support Magistrate determined that the stipulations did not comply with the CSSA and informed the parties that the issue would be considered de novo. The Second Department overturned the Support Magistrate's findings stating: Nowhere in the Constitution, in the Family Court Act, or in the judgment of divorce itself, is the Family Court empowered, in effect, to invalidate a stipulation incorporated into the judgment of divorce entered by the Supreme Court ' . Had either party questioned the legality of the stipulation, the issue should have been determined by the Supreme Court, which had issued the judgment in which the stipulation was incorporated.

Savini , 34 A.D.3d at 689; see also Perrego v. Perrego , 63 A.D.3d 1072, 1073 (2d Dep't 2009) (“Family Court has no power to review a Supreme Court judgment determining the issue of child support or to determine the issue of child support de novo where the issue already has been determined by the Supreme Court and set forth in a judgment”); Huddleston v. Huddleston , 14 A.D.3d 511, 512 (2d Dep't 2005) (holding Family Court lacked jurisdiction to determine whether opt-out of CSSA in settlement agreement was defective).

Where there has been an opt-out, the Family Court can only modify a settlement that has been approved by the Supreme Court where there is a substantial change in circumstances. See Malone v. Malone, — N.Y.S.2d—, 2011 WL 2040389, *1 (N.Y. App. Div. 3d Dep't May 26, 2011) (“Family Court is authorized to modify an agreement pertaining to child support, which has been incorporated but not merged into a judgment of divorce issued by Supreme Court, only upon a showing that a change in circumstances warrants such modification.”). This standard, however, requires more than a mere change in income because, where the parties have included child support provisions in a separation agreement, courts assume that the parties anticipated the future needs of the child and adequately provided for them. Boden v. Boden , 42 NY2d 210, 213 (1977). Absent a showing of unanticipated and unreasonable change in circumstances the support provisions should not be disturbed. Id. As a general matter, changes in income and the cost of food, clothing and shelter, without more, do not warrant a change in child support. See Friedman v. Friedman , 65 A.D.3d 1081 (2d Dep't 2009) (holding “increase in the defendant's income does not constitute an unanticipated change in circumstances justifying an increase in his child support obligation.”); Patten v. Patten , 203 A.D.2d 441, 443 (2d Dep't 1994) (“courts generally do not modify an agreement with respect to child support based merely upon a parent's increased income” (quoting Brevetti v. Brevetti , 182 A.D.2d 606, 608 (2d Dep't 1992)).

Conclusion

Practitioners need to consider the Family Court's limited jurisdiction when seeking a modification of a child support order, or efforts at altering the agreement may be wasted by petition to the wrong forum.

Going forward, practitioners should discuss with their clients the impact of the amendment while evaluating whether to opt out of the CSSA. This inquiry is more important than ever because, if the parties opt out as part of a settlement, the parties give up the opportunity to have the amount of child support re-evaluated periodically. In making this determination, the age of the dependent children will take on additional weight. If the dependent child is a teenager, so that child support payments will end soon, the benefit of the amendment is relatively minor. But, if the dependent child is young, by opting out of the CSSA, the parent may forego the ability to regularly update the amount of child support. This may prove to be a major disadvantage when fairness dictates the child should receive more (or less) support, due to a change in a parent's income, yet that change cannot be said to “substantial.”

Carol W. Most, a member of this newsletter's Board of Editors, is a partner at Carol W. Most & Associates, P.C., in White Plains. Adam Schneid is an associate with the firm.