I'm Dennis Molamphy and I have been practicing family law for about 32 years.  I quite frankly missed the 2012 Guidelines changes due to some family illness but I am gearing up for the 2016 Guidelines.  During that process, I noted that there is a little bit of greed coming from the collection process.  My base child support is $100.00 and I get hit with a 4% collection fee so my support is increased to $102.00.  However, I believe that my $102.00 is reduced by 4% of $102.00 or by $4.08!  This means that the custodial parent gets a check for $100.00 minus $4.08 or $97.92.

But the fee is calculated from my child support of $100.00 so why does someone or something get an extra 8 cents for collecting a "fee on a fee?"  That 8 cents belongs to my child and not the collector.  True, this is only .08% of the $100.00 but think how much someone's been getting from all of the children over the years.

Of course, the solution is remarkably complex that it is almost beyond comprehension.  Oh, no.  Anyone selling an item at a fixed fee that includes sales tax (should) know that the formula for the actual price of the item is x = total price/(1 + sales tax) and the sales tax is x * sales tax.  If I get $10,000 for the sale of my widgets, the actual price of the widgets is $9,523.81 and my 5% sales tax is $9,523.81 * 5% or $476.19 rather than $10,000 * 5% or $500.00.

For those in Topeka who don't care, that means that the 4.0% fee is actually 3.9215686% and the 2.5% fee is actually 2.4691358%.  I will admit that these are pretty long digits but I bet that they fit on the computers.

Fight the "fee on fee."  It's only money for your children.  How about putting in the Guidelines that the collection fee must be based on the child support and not the child support plus the collection fee.

Note that this is not an issue for the flat fee collection process.

Dennis

The fee on fee charge is going to the alleged protectors of children:  The Court Trustee and the former S.R.S. and not third parties.

Let me give you another example.  You owe MasterCard $100.00 at 12% interest a year starting January.  You don't pay a dime.  At the end of January, you owe $100.00 principal and $1.00 interest.  How much do you owe at the end of February?

Choice 1
$100.00 times 1% is $1.00 so you owe $100.00 in principal and $2.00 in interest.

Choice 2
$101.00 times 1% is $1.01 so you owe $100.01 in principal and $2.00 in interest.

Choice 3
$101.00 times 1% is $1.01 so you owe $100.00 in principal and $2.01 in interest.

The correct legal answer is choice 1.  The principal is fixed and the failure to pay each month generates $1.00 of interest.  Judgment interest is not compounded.  That is what Choice 2 does with "interest on interest."  I have never seen any interest calculation like Choice 3 but it is a hybrid.

This "theft" has nothing to do with transfer fees.  It is the same type of error as calculating sales tax on purchases for a price that already includes the sales tax.

I picked an example that yields a penny intentionally.  Most people pay more than that in child support.

You are correct in that the fees are percentages.  That's not the problem.  The problem is that the collection fee percentages are calculated in the Child Support Worksheet and then added to the child support and this additional child support coming from the fee is further multiplied by the collection fee percentage.
Dennis

djmlaw, I agree with you.  Why does it cost more to take $100 out of a pay check and disperse it to someone than it does $5000?  This is identical to writing a check for $100 vs. writing a check for $5000.  They both cost the same to write and mail.  I think rather than pick into the fractions of a penny, the bigger question is why are the fees a percentage of support?  Each county trustee sets the fee, not the KPC, so why do they all do it differently?  Personally, I think taking $3 from each parent to defray such costs would generate sufficient money.

To my knowledge the fee has not been unified, although I think it should be.  I think IV-D cases should have a flat fee of maybe $10 total, and other cases $6 total.  Half of each fee would be assessed to each party.  I don't understand the percentage approach.  It makes it obvious it is a revenue generating business.  Maybe the child support worksheet should just set the amount so that all cases are handled the same.