Can a Parent Count a Child in Household Size and Also Report Amounts Paid in Child Support on the FAFSA?
By The Fastweb Team
August 30, 2017
I am the custodial parent for my son and college-bound daughter. It seems like the form assumes that only non-custodial parents pay child support! However, I still pay their mother child support of over $1,600/month (they are with her slightly less than half the time). Do I report those child support payments on the FAFSA where it asks for “child support your father paid because of divorce or separation or as a result of a legal requirement”? — George G.
Child support payments made by a custodial parent may be reported on the FAFSA, but only under certain circumstances. If a child is counted as a member of the household on the FAFSA, then the child support payments made by the custodial parent on behalf of the child are not reported on the FAFSA. The FAFSA instructions clearly state “do not include support for children in your father’s household”. If the child is not counted as a member of the household on the FAFSA, then the child support payments made by the custodial parent on behalf of the child are reported on the FAFSA.
Note that the student is automatically counted in household size, so any child support payments made by the custodial parent on behalf of the student are not reported on the student’s FAFSA.
Each of the two possibilities — counting a child in household size or reporting child support payments made on behalf of the child — has a different impact on eligibility for need-based financial aid.
- Child support payments made by the custodial parent, if reported on the FAFSA, are subtracted from the income reported on the FAFSA. (Similarly, child support payments received by the custodial parent are added to the income reported on the FAFSA as untaxed income.)
- Each additional member of household size, on the other hand, increases the income protection allowance by about $4,000. (If the additional family member is also enrolled in college, the income protection allowance is increased by about $1,100 instead of $4,000.) The income protection allowance is subtracted from the income reported on the FAFSA.
The FAFSA does not allow the custodial parent to count a child in household size and also report child support payments made by the parent on behalf of the child because that would effectively be double dipping.
So there’s a tradeoff between increasing the income protection allowance or counting the child support payments made. Both reduce income, but by different amounts. If the increase in the income protection allowance exceeds the child support payments made by the custodial parent on behalf of a child, then counting the child in household size will yield a lower expected family contribution (EFC). Otherwise the EFC will be lower if the child is not counted in household size.
The income protection allowance is based on a standard set of figures for basic living expenses. Most child support payments will exceed the incremental increase in the income protection allowance for an additional child.
Section 480(l)(1)(B) of the Higher Education Act of 1965 [20 USC 1087vv(l)(1)(B)] specifies that the family size of a dependent student whose parents are divorced includes the parent responsible for completing the FAFSA and that parent’s dependents, including the student. If the parent has remarried, family size also includes the step-parent and the step-parent’s dependents.
Section 480(k)(1) of the Higher Education Act of 1965 [20 USC 1087vv(k)(1)] defines “dependent of the parent” as including “the student, dependent children of the student’s parent, including those children who are deemed to be dependent students when applying for aid under this title, and other persons who live with and receive more than one-half of their support from the parent and will continue to receive more than half of their support from the parent during the award year”.
The student and dependent children are not required to live with the student and/or parent to be counted in household size. The inclusion of children in household size is based on the support test instead of residency to accommodate situations in which a parent supports a child who doesn’t live with the parent, such as when the parent is divorced or when a child is away at college. Siblings do not need to be enrolled in college or apply for financial aid to be counted in household size.
The support test is based on the support received by the person for the full award year, even if the support started mid-year.
Any benefit payments the parent receives on behalf of the child, such as Social Security benefit payments, are counted as part of the parent’s support of the child.
The rules can be a little confusing. Page AVG-18 of the 2011-12 Application and Verification Guide provides an example that helps clarify the rules: “Steven and his wife each have a child from a previous relationship who doesn’t live with them and for whom they pay child support. Because Steven provides over half of his daughter’s support through his payments, he counts her in his household size. Therefore, he doesn’t report the amount of child support he pays on his FAFSA. Steven’s wife isn’t providing over half of her son’s support, so he isn’t included in Steven’s household size. Therefore, Steven can report the amount of child support his wife pays.”
Both household size and child support reported on the FAFSA are subject to verification, since they are prone to error. The college’s financial aid administrator may ask for a copy of the divorce decree or separation agreement to verify which parent is responsible for completing the FAFSA and the required child support payments. The financial aid administrator may also ask for copies of cancelled checks and money order receipts from child support payments, per the regulations at 34 CFR 668.57(d)(3).
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