When child support amounts are agreed to in a Settlement Agreement, parties are given the option to “opt out” of two of the three otherwise automatic provisions for upward or downward modification of child support in the future. Whether you should or should not is an important decision.
The one provision for modification that always remains is a substantial change in circumstances such that the Court believes a modification is necessary. An example could be the child developing a condition that did not previously exist. Another example could be an emergency that could not have been predicted. However, there are two provisions for modification of child support that can be waived. They include both the right to seek a recalculation every three years and/or the right to seek a recalculation if either person’s income has changed up or down by at least 15% since the last order was entered.
Clearly, the above two provisions for modification can be advantageous or disadvantageous to either person. A paying parent whose income rises from $75,000 to $100,000 may have to pay more. Likewise, a parent whose income was reduced through no fault of their own from $100,000 to $75,000 can seek a reduction.
The difficulty arises when one or both parents do not believe they know what the future holds for them. Will they make more because of advancement in their education, experience or promotion? Will the other parent make less because of competition in their business, age, health, or elimination of their job?
Even more difficult and perhaps the best reason to opt out of changes is where one person is self-employed and has complete control over their income. They can pay themselves less, increase expenses, borrow money and not report all income thus making obtaining a true picture of their income in the future much more difficult. So rather than face that burden an agreement to opt out saves having to re-prove all of the same things upon a request for a downward or upward modification. Instead, everyone has agreed to an amount that barring exceptional circumstances they believe will be adequate.