Relates to modifying child support orders, employer reporting of new hires and quarterly earnings, work experience programs and noncustodial earned income tax

Sections 2 and 5 of the bill would amend Tax Law §§ 606 and 697, respectively, to permit the Department of Taxation and Finance to share information needed to evaluate the impact of the Noncustodial Parent Earned Income Tax Credit.

Sections 3 and 4 of the bill would amend Tax Law §§ 171-a and 171-h, respectively, to require employers to report the availability of employer-sponsored family health insurance as part of the quarterly wage report and the new hires report.

Section 6 of the bill would amend Family Court Act (FCA) § 451 to conform the language of the FCA provision governing the modification of child support orders to the Domestic Relations Law (DRL) so that both provisions provide for a "substantial change in circumstance" as a basis for modification of an order of child support. This section would further provide two new bases for modification of an order of child support: (1) the passage of 3 years since the order was entered, last modified, or adjusted; or (2) a 15% percent change in either party's income since the order Was entered, last modified or adjusted provided that any reduction in income was involuntary and the party has made diligent attempts to secure employment commensurate with his or her education, ability and experience. The parties may specifically opt out of the two new bases for modification in a validly executed agreement or stipulation. The bill would provide that incarceration is not a bar to finding a substantial change in circumstance under certain conditions and also would clarify that retroactive support is paid and enforceable as provided under FCA § 440.

Section 7 of the bill would amend DRL § 236B (9) (b) to separate out the "substantial change of circumstance" threshold for modification of orders of child support into its own section for the sake of clarity and would provide two new bases for the modification of an order of child support: (1) the passage of 3 years since the order was entered, last modified, or adjusted; or (2) a 15% percent change in either party's income since the order was entered, last modified or adjusted provided that any reduction in income was involuntary and the party has made diligent attempts to secure employment commensurate with his or her education, ability and experience. The parties may specifically opt out of the two new bases for modification in a validly executed agreement or stipulation. The section would provide that incarceration

would not be a bar to finding a substantial change in circumstance under certain conditions.

Sections 8 and 9 of the bill would amend FCA § 440 and DRL § 236B (7), respectively, to require that all orders establishing a child support obligation contain a notice regarding the right to modify the order if there has been a substantial change in circumstance or the occurrence of the additional enumerated bases for modification.

Section 10 of the bill would add a new FCA § 437-a to authorize the Family Court to require the noncustodial parent of a child to seek employment, or to participate in job training, employment counseling or other programs designed to lead to employment, where such programs are available, if he or she is unemployed at the time the court is establishing the support order unless the noncustodial parent is in receipt of supplemental security income (SS1) or social security disability benefits (SSD).

Section 11 of the bill would amend Social Services Law (SSL) § 111-h to state that if the respondent is required to participate in work programs or activities, and if the order of support is made payable on behalf of persons in receipt of public assistance, the support collection unit may not file a petition to increase the support obligation for twelve months from the date of entry of the order if the respondent's income is derived from the work activity or program. .

Section 12 of the bill would. amend FCA §461 to reflect the two new bases for modification of an order of child support.

Section 13 of the bill would provide that the bill is effective 90 days after it becomes law, except that: (1) sections 6 and 7 would only apply to child support orders which incorporate but do not merge stipulations or settlement agreements if the stipulation or agreement was executed on or after the effective date of the bill; and, (2) sections 3 and 4 take effect 365 days after the bill becomes law.

Existing law

FCA §§ 451 and 461, and DRL § 236B (9) set out the procedure to modify a child support order.

Tax Law § 606 (d-1) establishes the Noncustodial Parent Earned Income Tax Credit.

Tax Law § 697 sets limitations on the disclosure of tax return information.

FCA § 440 and DRL § 236B (7) set out the required provisions of a child support order.

Tax Law § 171-a contains the requirement that employers report wages on a quarterly basis.

Tax Law § 171-h contains the requirement that employers report new hires.

SSL § 111-h sets out the general duties and powers of the child support collection unit of the local - department of social services.

Prior legislative history

In the 2007 legislative session, S.4848 contained similar provisions to section 10 of this bill, but S.4848 was not reported from the Senate Judiciary Committee. In the 2008 legislative session, A.11684/S.7598-A contained the provisions of this bill. A.11684/S.7598-A was passed by the Assembly, but it was not reported from the Senate Investigations and Government Operations Committee.

Statement in support

The child support program in New York State has made steady improvements since its inception. Child support collections have increased in record amounts. In 1999, the State collected over $1 billion in child support for the first time ever, and has continued to collect over $1 billion in child support in each subsequent year. In 2008, the State collected $1.727 billion in child support. Despite these improvements, there is still much more work to be done. This child support bill would help build upon New York's achievements in this vital area.

The bill contains provisions that would improve child support collection and enforcement in New York. Sections 6 and 7 would clarify and provide additional legal bases for modifying a child support order. The complexity of the legal issues and varying standards creates confusion and makes it difficult for low income parents to keep their obligation consistent with their ability to pay support.

Currently, there is no uniform threshold for modifying child support awards. While the DRL specifies that a child support order may be modified following a showing of a substantial change in circumstance, the FCA is silent on the issue. The courts have not applied this standard to all orders, instead creating two higher thresholds if the order incorporates but does not merge a separation agreement or stipulation of the parties. Parties in support proceedings deserve to know that they have a right to seek modification of the support amount and when that right accrues. Establishing two new bases for modification of the award would establish clear standards for review of orders of child support.

Over time, these amendments would keep orders commensurate with the child support guidelines, which are presumed to fix a fair and adequate level of child support. The level of support would be based on the current financial circumstances and income of the parties, while incorporating currently existing protections against voluntary reductions in income intended to avoid the parent's responsibility to support the child. Child support orders based on the parties' current income would presumably reduce the accumulation of uncollectible debt.

The proposed amendments would clarify existing law and make changes as follows. First, the proposed amendments would clearly state in the FCA that an order of child support may be modified upon a showing of a substantial change in circumstance and thereby harmonize the FCA with the DRL. Second, the amendments would provide for two alternative bases for obtaining a review of an order of child support - where there has been the passage of 3 years or a 15 percent change in a party's income since the order was entered, last modified or adjusted. The bill adopts and confirms the rule found in the existing body of case law in order to clarify that a reduction in income may not be considered even under the new 15% change in income basis unless it was involuntary and the party has made diligent attempts to secure employment commensurate with his or her education, ability and experience. Third, the substantial change in circumstance threshold would apply prospectively to all orders of child support. If the order incorporates but does not merge a stipulation or settlement agreement, the amendment would be effective only if the stipulation or agreement was executed on or after the effective date of the amendment.

Parties who have consented or will consent to deviations from the basic child support order calculated under the Child Support Standards Act would be protected. The amendments would apply only to orders, stipulations or settlement agreements entered after the legislation becomes effective. The amendments would not affect vested rights under existing valid separation agreements or stipulations. In addition, in any modification proceeding, the terms of the parties' agreement may be considered by the court in determining whether the basic child support order calculated under the Child Support Standards Act is unjust or inappropriate (cf. Chamberlin v. Chamberlin, 99 N.Y.2d 328, 756 N.Y.S.2d 115 (2003)).

Application of the amendments to orders of child support incorporating but not merging separation agreements or stipulations would only operate prospectively. The bill is not anticipated to result in an immediate or long-term increase in the number of modification petitions filed.

Current law provides no notice in the order of support of a parent's right to modify their support order. As a result, parents are unclear when it is appropriate to file a modification petition to adjust the support obligation. Parties are not uniformly made aware of their rights to modify the order at the time obligations are established by the court. The proposed legislation would require notice of the right to apply for a modification of a support order and the requirements for application for modification in all support orders, so that parents know their rights and are encouraged to seek timely relief from the courts when it is appropriate.

The bill would provide that incarceration is not a bar to a finding of a substantial change in circumstance and is intended to address the impact of, the New York State Court of Appeals decision in Knights v. Knights, 71 N.Y.2d 865 (1988) and thereby clarify that a court may modify an order of child support where a party has been incarcerated considering the circumstances of the case; provided, however, that the incarceration is not the result of non-payment of child support or an offense against the custodial parent or child who is the subject of the order or judgment of child support.

The bill would also permit the Family Court to require an unemployed noncustodial parent to seek employment, participate in job training, employment counseling or other programs designed to lead to employment where available. For the purposes of this section, noncustodial parents in receipt of SSI or SSD may not be required to participate in such employment programs. This provision Would not limit the noncustodial parent's obligation to support his or her child. Nor would it curtail the court's obligation to set a fair and reasonable child support obligation in accordance with the Child Support Standards Act. No modification of the order would be sought for 12 months from the date of entry of the order if a noncustodial parent is or was enrolled in work programs or activities and the order of support is payable to a local department of social services pursuant to an assignment.

As part of the Governor's effort to provide universal health care coverage for New York children, the bill will aid the child support program in securing employer sponsored insurance for some of the State's neediest children. As of 2008, 139,376 children in the child support program were covered by employer-sponsored insurance through the program's efforts. When the child support program receives new employer information in a quarterly wage report or a new hires report, a medical execution, and the accompanying paperwork, must be mailed to the employer. The proposed legislation would require employers to identify the availability of employer-sponsored family health insurance when they report new hires and quarterly wages. If such insurance is not available from an employer, we can relieve the employer of handling unnecessary medical execution papers.

Budget implications

The bill is not expected to substantially impact the amount of child support collections. The provisions related to the Tax Law, permitting the Department of Taxation and Finance to share information needed to evaluate the Non-custodial Parent Earned Income Tax Credit, are not expected to have a substantial fiscal impact. EFFECTIVE DATE : This bill would take effect 90 days after it becomes a law, except that: (I) sections 6 and 7 would only apply to child support orders which incorporate but do not merge stipulations or settlement agreements if the stipulation or agreement was executed on or after the effective date of the bill; and (2) sections 3 and 4 take effect 365 days after the bill becomes law.