A divorce or separation could be structured to give the custodial parent more assets and less child support payments. The custodial parent’s assets would be assessed at 5.6% versus the financial aid income assessment rate of 47%.
Specific Details
A custodial parent reduced income $3,000/month ($36,000/year) by structuring the divorce settlement to receive the residence valued at $200,000, instead of the monthly income. Since the parents’ financial aid income is assessed at 47%, the income reduction may increase the child’s financial aid eligibility by $5,720 (36,000 x 47%) – (200,000 x 5.6%).
Potential Savings
If you are in a financial aid income assessment rate of 47% and asset assessment rate of 5.6%, you could increase your financial aid eligibility dramatically by properly structuring a divorce settlement.