holding that “lump-sum payments of retroactive Social Security disability benefits to children cannot be credited against child support arrearages that are accumulated before the noncustodial parent has filed a petition to modify based on the disability”
How later courts described this case
- holding that “lump-sum payments of retroactive Social Security disability benefits to children cannot be credited against child support arrearages that are accumulated before the noncustodial parent has filed a petition to modify based on the disability”
- holding a child's excess Social Security benefits cannot be credited against a parent's arrearages that have accumulated prior to the date the parent files a petition to modify the child support obligation
- endorsing the requirement that an obligor petition for modification and also alert the court to a pending application for benefits, following which the court could defer its ruling on the petition
- remanding the case to the trial court to determine the credit and the effective date of any such credit for retroactive Social Security disability benefits
Written by the judges who cited it.
The opinion
ATTORNEY FOR APPELLANT ATTORNEY FOR APPELLEE
Jane G. Cotton Patrick R. Ragains
Anderson, Indiana Anderson, Indiana
______________________________________________________________________________
In the
Indiana Supreme Court
_________________________________
No. 48S04-0509-CV-404
DANNY E. BROWN, JR.,
Appellant (Respondent below),
v.
GINGER A. BROWN,
Appellee (Petitioner below).
_________________________________
Appeal from the Madison Superior Court III, No. 48D03-0004-DR-00249
The Honorable Stephen Clase, Judge
_________________________________
On Petition to Transfer from the Indiana Court of Appeals, No. 48A04-0402-CV-66
_________________________________
June 29, 2006
Sullivan, Justice.
Because of Danny Brown’s disability, his son received a lump-sum distribution of retro-
active Social Security disability benefits as well as monthly benefits going forward. Brown
seeks credit for the lump-sum payment against an accumulated child support arrearage and credit
for the monthly benefits against his future support obligation. Following precedent from this
State and others, we hold that a disabled parent is entitled to credit against the parent’s child sup-
port obligations for Social Security disability benefits paid to a child, effective as of the date the
parent files a petition to modify a support order. The petition may be filed upon application for
disability benefits.
Background
Danny and Ginger Brown’s marriage was dissolved on December 14, 2000. The decree
awarded Mother custody of the parties’ son and ordered Father to pay weekly support of $110.
Over the next two years, Father failed to make his support payments and this prompted addi-
tional orders from the court. During at least a portion of this time, the court in its orders noted
that Father was unable to work due to back injuries and surgery.
By May 20, 2003, Father’s arrearage had grown to $7,595. The trial court found Father to
be in contempt for failure to pay support and ordered that he pay $50 per week in child support
and $10 per week towards the arrearage. The May 2003 order also noted that Father would soon
have back surgery and had applied for Social Security disability benefits in October, 2002.
On June 3, 2003, after Father’s application for Social Security benefits had been ap-
proved, his son received a lump-sum check from the Social Security Administration in the
amount of $10,377 as a retroactive payment for benefits he was entitled to as Father’s dependent.
The son also began to receive monthly benefits. Before learning of this lump-sum payment to
his son, Father had petitioned the trial court on June 5, 2003, to modify his child support obliga-
tion on the basis that his impending back surgery and his application for Social Security disabil-
ity benefits constituted substantial changes of circumstances to merit a modification.
When Father learned of the retroactive payment to his son, he filed a Trial Rule 60(B)
motion for relief from the May 20, 2003 order establishing his support arrearage. Father argued
he was “entitled to reimbursement of $10,377 for support overpayment,” after having paid
$7,545 in back support towards his arrearage.
The trial court held that the retroactive payment to the child “[was] not child support and
[that] Father [was] not entitled to a credit for it against his child support arrearage.” Appellant’s
App. at 54. Father subsequently appealed; the Court of Appeals affirmed the trial court. Brown
2
v. Brown, 823 N.E.2d 1224 (Ind. Ct. App. 2005). Father sought, and we granted, transfer. B-
rown v. Brown, 841 N.E.2d 183 (Ind. 2005).
Discussion
Father seeks a determination that the retroactive lump-sum distribution of social security
disability benefits paid to his son be credited as child support either to satisfy the accumulated
arrearage or prospectively against future support obligations. 1
I
In Poynter v. Poynter, 590 N.E.2d 150 (Ind. Ct. App. 1992), trans. denied, a mother who
was the custodial parent of a couple’s two children asked the trial court to offset her child sup-
port obligation by the amount of Social Security disability benefits paid directly to her children
as a result of her disability. Instead, the trial court reduced the total support obligation of both
parents by the amount of the benefits paid to the children before determining each parent’s share.
“Following the majority rule of other jurisdictions,” the Court of Appeals reversed. Id. at 152. It
held that a disabled parent is entitled to have the Social Security disability benefits received by
the child because of that parent’s disability credited against their child support obligations. Id.
Father argues that we should follow Poynter and allow him the same credit that the
mother received in that case. The Court of Appeals did not follow Poynter, largely based on its
analysis of our subsequent opinion in Stultz v. Stultz, 659 N.E.2d 125 (Ind. 1995). 2 Brown, 823
N.E.2d at 1226-28. In Stultz, a father, the non-custodial parent of a couple’s two children, asked
the trial court to offset his child support obligation by the amount of Social Security retirement
benefits paid directly to his children as a result of his retirement. (Note that Stultz involved So-
1
The parties seek no determination as to whether Social Security disability benefits paid to a child cred-
ited against the disabled parent’s support obligation must be included in the parent’s gross income for
purposes of determining the amount of the child support obligation under the Child Support Guidelines.
Other states have held that it is. See Jenkins v. Jenkins, 704 A.2d 231, 234 (Conn. 1998); Michael A.
DiSabatino, “Right to Credit on Child Support Payments for Social Security or Other Government De-
pendency Payments Made for Benefit of Child,” 34 A.L.R. 5th 447 (1995 & 2005).
2
Judge Riley dissented, arguing that Poynter should be followed. Brown, 823 N.E.2d at 1228 (Riley, J.,
dissenting).
3
cial Security retirement benefits, whereas Poynter and the case before us involve Social Security
disability benefits.) The trial court denied the requested credit; following Poynter, the Court of
Appeals reversed.
We granted transfer in Stultz and reinstated the judgment of the trial court. Acknowledg-
ing the cases from other jurisdictions cited by the Court of Appeals in Poynter, we nevertheless
found “ample case law holding that such a credit is not automatic and that the presence of social
security benefits [was] merely one factor for the trial court to consider in determining the child
support obligation or modification of the obligation.” Stultz, 659 N.E.2d at 128 (citations omit-
ted). Given this case law, we concluded that deference to the trial court was appropriate, particu-
larly given “our state’s strong emphasis on trial court discretion in determining child support ob-
ligations and our regular acknowledgement of the principle that child support modifications will
not be set aside unless they are clearly erroneous.” Id. (citing Kinsey v. Kinsey, 640 N.E.2d 42,
44 (Ind. 1994)).
Stultz, then, turned primarily on the trial court’s discretion to make the determination it
did, i.e., to refuse to credit father’s child support obligation by the amount of Social Security re-
tirement benefits paid to his children as a result of his retirement. Stultz did not turn on any dis-
tinction between Social Security retirement benefits and Social Security disability benefits.
However, we did say in Stultz that the treatment for child support purposes of payments made on
behalf of a Social Security disability recipient might well present a stronger case for allowing a
credit than a retirement recipient. See id. at 129 & n.6. We deferred a definitive holding on that
point for a case squarely presenting the issue.
II
Now presented with just such a case, we have reviewed the rationale of both Poynter and
that of other courts that have examined the question. We find this authority persuasive that a
disabled parent is entitled to have Social Security disability benefits paid to a child because of
that parent’s disability credited against their child support obligations. See Williams v. Wil-
liams, 727 N.E.2d 895, 897 (Ohio 2000) (“the underlying intent behind Social Security payments
4
to a child is to provide support that the disabled parent is unable to provide. Thus, Social Secu-
rity benefits are characterized as a substitute for the disabled parent's earnings rather than gratui-
ties from the federal government”); Holmberg v. Holmberg, 578 N.W.2d 817, 827 (Minn. Ct.
App. 1998) aff’d, 588 N.W.2d 720 (Minn. 1999) (“child support and social security benefits paid
on behalf of a child due to a support obligor’s disability have almost identical purposes”); Frens
v. Frens, 478 N.W.2d 750 (Mich. Ct. App. 1991); Michael A. DiSabatino, Annotation, “Right to
Credit on Child Support Payments for Social Security or Other Government Dependency Pay-
ments Made for Benefit of Child,” 34 A.L.R. 5th 447 (1995 & 2005).
Although we hold that a disabled parent is entitled to have child support obligations cred-
ited with the Social Security disability benefits received by the child because of that parent’s dis-
ability, we see no reason to revisit our holding in Stultz with respect to the discretion of the trial
court when presented with a request for a credit for Social Security retirement benefits. Disabil-
ity impacts a parent’s earning capacity and, therefore, a child’s standard of living, in a fundamen-
tally different way than does retirement. The trial court is in the best position to assess the im-
pact of retirement in any particular case.
III
The general rule enunciated in Part II is that a disabled parent is entitled to have Social
Security disability benefits paid to a child because of that parent’s disability credited against the
parent’s child support obligations. As such, a disabled parent with respect to whom Social Secu-
rity disability benefits are paid to the parent’s child is entitled to petition the court for modifica-
tion of the parent’s child support to reflect a credit for the amount of the payments. The credit
takes effect as of the date of the petition.
In this case (as will often be the case because of delays in making Social Security disabil-
ity determinations), a lump-sum payment of retroactive Social Security disability benefits was
paid to the son. We set forth some general principles on the handling of lump-sum payments of
retroactive Social Security disability benefits paid to children of disabled parents and then re-
mand this matter to the trial court to apply the principles to the facts of this case.
5
A
We begin with the mandate of our statute that expressly prohibits a court from “retroac-
tively modify[ing] an obligor’s duty to pay a delinquent support payment.” Ind. Code § 31-16-
16-6 (2004). Other courts have held that this rule operates to prohibit crediting lump-sum pay-
ments of retroactive Social Security disability benefits paid to children against existing child
support arrearages. “The rule is premised on the importance of meeting the current needs of
children, thereby protecting their right to regular and uninterrupted support. Enforcement of the
rule eliminates the disincentive which obligors would otherwise have to suspend their support
payments pending application for disability benefits.” Newman v. Newman, 451 N.W.2d 843,
844 (Iowa 1990) (citing Potts v. Potts, 240 N.W.2d 680, 682 (Iowa 1976); McClaskey v.
McClaskey, 543 S.W.2d 832, 835 (Mo. Ct. App. 1976); Children & Youth Servs. v. Chorgo, 341
Pa. Super. 512, 491 A.2d 1374, 1380 (Pa. Super. Ct. 1985) (dicta)).
We adopt this analysis and hold that lump-sum payments of retroactive Social Security
disability benefits to children cannot be credited against child support arrearages that are accu-
mulated before the noncustodial parent has filed a petition to modify based on the disabilty. We
recognize, of course, that a disabled parent has limited influence over the length of time the So-
cial Security Administration will take in processing the parent’s claim. We believe the Michigan
Court of Appeals has provided useful guidance in this regard and we adopt it:
As in this case, the federal government sometimes takes years to make a decision,
and this can lead to a retroactive award of benefits. Under such circumstances the
party applying for federal benefits should petition the trial court for modification
of a support order based on the apparent inability to work caused by the disability
and alert the court to the pending application for benefits. The trial court could
defer its ruling on the petition until the federal government decides whether to
award the benefits. This would give the trial court the power to modify the sup-
port order retroactively to take into account all the changes in circumstance, while
at the same time providing the custodial parent with notice that such a modifica-
tion is a possibility.
Jenerou v. Jenerou, 503 N.W.2d 744, 746 (Mich. Ct. App. 1993).
6
While we agree with the Michigan Court that the filing of a petition to modify on grounds
that a Social Security disability determination has been requested entitles the parent to a credit
retroactive to the date of the petition in the event of a favorable determination, the filing of the
petition does not relieve the parent of the parent’s child support obligation until such time as
there is a modification, if any, of the existing child support order. See Tarbox v. Tarbox, 853
A.2d 614, 621 (Conn. Ct. App. 2004).
B
Indiana courts have generally prohibited child support obligors from attempting to satisfy
their future support responsibilities through non-conforming payments that exceed the amount
owed the support recipient. In such cases, our courts have held that “child support payments
cannot be applied prospectively to support not yet due at the time of the overpayment.” Drwecki
v. Drwecki, 782 N.E.2d 440, 448 (Ind. Ct. App. 2003) (quoting Matson v. Matson, 569 N.E.2d
732, 733 (Ind. Ct. App. 1991)). The general rule prevents a non-custodial parent from building
up a substantial credit and then later refusing to make support payments, which “would thwart
the court’s purpose of providing regular, uninterrupted income for the benefit of the children.”
Id. at 448-49. Where a parent voluntarily overpays his or her child support in an attempt to re-
ceive a prospective credit, the excess amount is properly treated as a gratuity to the children and
no credit is granted. See Holy v. Lanning, 552 N.E.2d 44, 45 (Ind. Ct. App. 1990) (noting that
any excess child support payment made by an obligor should be treated as a gratuity or as volun-
tary contributions for the support of the children).
Where all or a portion of lump-sum payments of retroactive Social Security disability
benefits paid to children cannot be credited against existing child support arrearages under Part
III-A, we believe the doctrine of non-conforming payments dictates the excess amount is prop-
erly treated as a gratuity to the children and no credit is granted. This may also be the case
where prospective Social Security disability benefits paid to children exceed the amount of the
parent’s corresponding child support payment. See Newman, 451 N.W.2d at 844 (“the receipt of
excess government benefits over the monthly child support obligation is equitably deemed a gra-
7
tuity to the children”); Holmberg v. Holmberg, 578 N.W.2d at 827. This does not mean that the
trial court cannot modify the child support obligation to reflect the Social Security disability
benefits. See footnote 1.
Conclusion
Having previously granted transfer pursuant to Indiana Appellate Rule 58(A), thereby
vacating the opinion of the Court of Appeals, we now reverse the judgment of the trial court.
This case is remanded to the trial court with instructions to (1) credit, in accordance with Parts II
and III of this opinion, Father’s prospective child support obligations with the monthly Social
Security disability benefits paid to his son; (2) determine, under Part III of this opinion, how
much, if any, of the lump-sum payment of retroactive Social Security disability benefits paid to
the son can be credited against Father’s child support arrearage; (3) determine, in accordance
with Part III of this opinion, the effective dates of any such credits; and (4) resolve any remain-
ing issues.
Shepard, C.J., and Dickson, Boehm, and Rucker, JJ., concur.
8