In a recent Supreme Court decision, the Court clarified whether automatic “escalation clauses” can be built into a child support order. Traditionally a child support order is calculated based upon each parties’ present income. If a party, in the future wants to modify that order, they must petition the court for a modification. The trial court can order parties to exchange tax returns at the end of each year so as to allow them to determine if there has been a substantial change in income.
Until recently; however, it was unclear as to whether a trial court could order an automatic recalculation of a parties’ child support obligation without first having to seek a modification. In the case of In re: Sanborn, decided July 14, 2021, the Supreme Court stated that in certain circumstances “child support escalation clauses” are allowed.
In Sanborn, the trial ordered that the parties each year exchange their tax returns. The court ordered that if the husband’s income exceeded a certain amount for that year, additional income would be “run through the New Hampshire Child Support Guidelines Worksheet and the husband would pay child support on that additional income.” The husband appealed arguing that the escalation clause violates RSA 458-C:7 in that the wife was not required first to apply for a modification. The supreme court rejected that argument stating that “implementation of the escalation clause does not modify the child support order contained in the final decree, and nothing in the current statute precludes such a clause.”
In the Sanborn case, because the escalation clause “directly ties the annual adjustment, if any, to actual changes in the parties’ income the clause complies with New Hampshire law. The Supreme Court held that so long as the escalation clause follows the statutory child support model, the clause will remain valid. Finally, the Supreme Court noted that neither party if precluded from returning to Court to modify the child support order if special circumstances exist warranting such a modification.
Andrew J. Piela is a Director at Hamblett & Kerrigan, P.A. Mr. Piela concentrates his practice in civil litigation, family law, probate and land use litigation. You can reach Attorney Piela by e-mail at firstname.lastname@example.org.