Direct Payments to Custodial Parent

• The traditional child support arrangement involves the noncustodial parent making periodic payments directly to the other party. This remains the simplest and most direct method of carrying out a child support obligation. The receiving party enjoys the advantage of direct receipt of support without having to wait for a state collections system to process the payment. Unfortunately for the receiving parent, a direct payment arrangement often leaves her without the ability to prove how much and how often she receives support, which can impair her ability to use the child support to help get a loan. On the other side, the paying parent can experience difficulties in verifying his payment of a given support amount in the event of a dispute.
  
  

Paying to the State

• With the advent of county child support enforcement agencies and the development of centralized collections systems in the states, many parents are paying child support by sending money to the collections system or having it deducted from their paychecks. This provides a computerized record of payments made and disbursed, which can protect both parents when disputes arise. When the support is deducted from the paying parent's pay via a wage withholding order, the receiving parent enjoys the benefit of being the first bill the other pays with every check. On the downside for the recipient, however, centralized collections systems often create a delay between the time the paying parent pays and the time the other party receives the money.
  
  

Increased Share of Marital Assets or Alimony

• Outside of court, parties can be creative in the ways they structure their child support arrangements. As child support payments are not deducted from the income of the one who pays and are not included in the taxable income of the recipient, a party may support his children by agreeing to pay additional spousal support and alimony in a separation agreement or consent order. The operation of tax brackets can sometimes reduce the net impact of a given sum on a payor's overall financial condition while providing the same value to the recipient.
  
  

Providing Necessities or Paying Other Obligations

• Although periodic payments of money constitute the most common forms of child support, a party can provide support by providing value to the other parent in other ways. He may, for example, agree to make direct payments to creditors of the custodial parent. He may also provide support by allowing the custodial parent to live in a home that he owns or by allowing her the use of a motor vehicle that constitutes his sole and separate property. The key feature of in-kind child support arrangements is reducing the other party's need to use her own income to pay for other things.