When must a Non-Custodial Parent Count a Child in Household Size?
January 21, 2013
The federal need analysis formula bases the income-protection allowance (IPA) on the household size. Each additional child increases the IPA by about $4,000 ($4,100 in 2013-14, adjusted annually for inflation). The IPA is subtracted from income, as is the child support paid, so counting a child in household size and counting the child support paid on behalf of the child would effectively be double-counting the support.
Generally when a parent pays a substantial amount of child support (e.g., more than about $4,000 per year per child), it is more beneficial to report the child support payments and to not include the children in household size. It all depends on whether the child support payments per child exceed the increase in the IPA for an additional child in the household size.
However, if a child who receives child support (including college support) is enrolled in college, it may be more beneficial to count the child in household size. Only children who are included in household size can be counted in the number in college on the FAFSA. The parent contribution portion of the expected family contribution is divided roughly by the number of children in college. This can have a big impact on eligibility for need-based aid, sometimes greater than the impact of counting the child support payments.
To determine which approach is more beneficial, use a need analysis calculator like the one on the FinAid web site to explore both scenarios and see which yields the lower EFC.
Often there is little choice in whether a child is counted in household size or not. The parents either provided more than half support or did not. If the FAFSA is selected for verification, the verification worksheet will ask questions about child support paid to confirm whether the family was entitled to count the child in household size or not.
Note that college financial aid administrators are likely to question situations in which the amount of child support paid is inconsistent with the inclusion or exclusion of the child in household size. The financial aid administrator can ask for documentation relating to child support payments, including a copy of the divorce decree or separation agreement, a copy of the child support agreement and proof of the amount of child support paid.