Sunday, October 11, 2009

Indiana Child Support Amendments - Pt V

This is my fifth posting in a series that I am doing on the Amendments to the Indiana Child Support Guidelines that will take effect 01 January 2010. In part IV I described the effects of parenting time credits and retroactive modifications on the overall support issues.

In this section I will show the changes made to and detail the -

V - Application of Social Security payments

The first thing to note is that the entire portion of the Guidelines that previously related to Social Security income has been removed. This does not necessarily reflect that those provisions are no longer applicable. There is no change to the consideration of Social Security retirement benefits or Supplemental Security Income.

Guideline 3 which provides for the determination of child support amount in providing the definition of weekly gross income included social security benefits and veterans pensions.

Specifically excluded are benefits from means‑tested public assistance programs, including, but not limited to Temporary Aid To Needy Families (TANF), Supplemental Security Income, and Food Stamps.

Here is the new language for the Guidelines as it applies to existing Social Security payments.

Social Security benefits received for a child based upon the disability of the custodial parent are not a credit toward the child support obligation of the noncustodial parent. It is a credit to the custodial parent's child support obligation.

Social Security benefits received by a custodial parent, as representative payee of the child, based upon the earnings or disability of the noncustodial parent shall be considered as a credit to satisfy the noncustodial parent's child support obligation as follows:

Social Security Retirement benefits may, at the court's discretion, be credited to the noncustodial parent's current child support obligation. This credit is not automatic. The presence of Social Security Retirement benefits is merely one factor for the court to consider in determining the child support obligation or modification of the obligation.

Social Security Disability benefits shall be included in the weekly gross income of the noncustodial parent and applied as a credit to the noncustodial parent's current child support obligation. The credit is automatic.

Any portion of the benefit that exceeds the child support obligation shall be considered a gratuity for the benefit of the child unless there is an arrearage.


What is being said here is that when social security benefits are received by the custodial parent because of his or her disability and those benefits are for the child that those payments will not be a credit for the noncustodial parent's child support obligation. However when the custodial parent is receiving social benefits because of the noncustodial parent's disability and those benefits are for the child, those payments will be a credit for the noncustodial parent's child support obligation.

In calculating the child support payment obligation, the social security disability benefits received by the custodial parent on behalf of the child, based upon the noncustodial parent's disability, shall be considered income of the noncustodial parent for the determination of the support payment amount. When the social security payment amount exceeds that of the noncustodial parent's child support payment obligation then the excess is to be considered a gratuity to the custodial parent unless the noncustodial parent owes back support. Then it shall be applied to the past due support.

When a parent files for social security disability this does not relieve that parent from the obligation to make court ordered child support payments. As explained in Part IV a modification of support shall be granted retroactively to the date of the filing of the Petition to Modify Court Ordered Child Support Payments.

The application of social security disability payments to a court ordered child support payment arrearage can get a bit complicated. The new Guidelines contain the following provisions as it relates to arrears.

Arrearages

Credit for retroactive lump sum payment. A lump sum payment of retroactive Social Security Disability benefits shall be applied as a credit against an existing child support arrearage if the custodial parent, as representative payee, received a lump sum retroactive payment, without the requirement of the filing of a Petition to Modify Child Support. However, no credit should be allowed under the following circumstances:

A custodial parent should never be required to pay restitution to a disabled noncustodial parent for lump sum retroactive Social Security Disability benefits which exceed the amount of 'court ordered' child support. Any portion of lump sum payments of retroactive Social Security Disability benefits paid to children not credited against the existing child support arrearage is properly treated as a gratuity to the children. No credit toward future support should be granted.

No credit shall be given for a lump sum disability payment paid directly to a child who is over the age of eighteen (18). The dependency benefits paid directly to a child who has reached the age of majority under the Social Security law, rather than the custodial parent, as representative payee, do not fulfill the obligations of court ordered child support.


For a parent who applies for Social Security Disability benefits and a lump sum payment for the past period of disability goes to the custodial parent for the benefit of the children then that payment should be applied to a support arrearage. There are exceptions though.

As has been a longstanding policy there may not be a requirement placed upon the parent receiving the support to pay back any overpayment. Thus, a custodial parent receiving a lump sum payment which exceeds the arrearage may not be required to return that portion to the noncustodial parent. Instead that excess payment should be given by the custodial parent directly to the children. However, the amount of current benefits paid which exceed the current court ordered child support payment obligation may properly be treated as a credit towards a child support payment arrearage.

For those parents who have become disabled and their income has been reduced to a point where it would produce a change of at least 20% in the current child support payment obligation those parents should immediately seek a modification of court ordered child support payments.

Considering the new language added to the Guidelines and the way arrearages are treated it could be advantageous for the noncustodial to maintain or let an arrearage build rather than sell assets or borrow money to keep current of the existing excessive child support payment obligation.

If you would like an evaluation of your current child support payment order please contact me.


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©2009 Stuart Showalter, LLC. Permission is granted to all non-commercial entities to reproduce this article in it's entirety with credit given.

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