This St. Patrick’s Day, instead of chasing that elusive leprechaun, start looking for these hidden reimbursement gems in your child support agreements.
You may just find a pot of gold.
Here are three common situations where we see divorced parents unknowingly leaving money on the table over and over.
Medical Expense Reimbursement
Your Kid’s Getting Braces
You’ve just learned your son needs braces – and it’s going to be expensive. Now what?
First of all, the primary parent of residence (PPR) has to pick up the first $250 in medical expenses per child annually.
It’s very easy to hit that $250 threshold when you add up copays, prescriptions, testing and so on.
After that, both parents should split the expenses in equal or proportionate shares. This comes into play when your child needs orthodontic work, like braces or a retainer, or will need to see a dermatologist or allergist every month.
Let’s say the PPR covers the first $250 for the year – and then she’s looking at $100 per month for the rest of the year (that’s $1,200 total – no small thing) for braces, she should ask the other parent for their share.
However, PPRs often say it’s not worth asking because they’re worried about the legal hassle or causing an argument.
No. Full stop. Let’s correct this right now.
The problem we often see is that the PPR will wait a few years, review how much they spent on medical bills without support from the other parent and then come to us to recover hundreds or thousands of dollars from their former partner years after the fact.
Think that’s going to cause an argument?
Frankly, you can avoid all that by approaching your former partner in the same calendar year you’re paying the medical bills and reach an agreement then.
Tip: Always track and document the medical expenses you’re paying out for this purpose (and also for tax records).
That way you’ll know when you hit the $250 threshold and when your former partner’s contribution needs to kick in.
Congrats, You’ve Got a Teenage Driver
Johnny’s 17 and ready to hit the road. Whoo hoo!
If you buy a new or used vehicle for the sole purpose of your Johnny driving to school and tooling around town with his friends, the outlay cost (or lease down-payment) should be split in income-proportionate shares between the PPR and the former partner.
Many times, though, we’ve seen PPRs who acquire a vehicle for their teenage child and don’t consult the other parent at all.
You know the scenario.
One parent thinks a used Buick for $800 is a good starter vehicle, and the other parent wants their firstborn to be driving a Mercedes. That often results in a this-could-have-been-avoided dispute about the reasonableness of the vehicle expense.
Communication is key.
Auto insurance is another area of contention – it would be unfair for either party to assume full responsibility for adding the minor child to their car insurance.
In an ideal situation, both parents would agree on a vehicle and identify who could most affordably add the child to their insurance policy – and then share that new expense in income-proportionate shares.
Considering that adding a new driver to your insurance policy could run you thousands a year, working with your former partner on sharing this could result in hundreds of extra dollars a month in your pocket.
Child Care Expenses
You’ve Got to Work, They’re in Daycare
Work-related childcare may be another lucky charm for you.
Many of our divorcing clients have young children, and often one or more are enrolled in full-time daycare.
With school-age kids, parents often use before care and aftercare services that their school or local community center offer.
These are considered work-related childcare expenses.
The parent who exclusively covers that cost (or if it’s paid by both) would receive a credit on their child support guideline worksheet.
Imagine this scenario: Mom enrolls two kids, aged 3 and 4, in full-time daycare, so she’s getting a credit on her worksheet.
Surprise! Dad’s child support is actually going up and will contribute in some way to those work-related childcare expenses.
Fast-forward four to five years down the line when the kids are enrolled in school full time and out of all-day daycare. At this point, they may just need beforecare or aftercare, or a babysitter, at a greatly reduced cost to Mom.
At that point, Dad’s entitled to request a recalculation of child support based on the reduction in work-related childcare expenses.
Whichever parent is paying child support could be leaving money on the table since the kids are in a less-expensive childcare situation. This is considered a substanial change in circumstances, allowing for a modification of the child support payment.
If you need help reviewing your situation to see if you’re entitled to any of these reimbursements, contact us.