Overpayment of Child Support in Arizona
In December of 2016, the Arizona Court of Appeals reviewed and rendered a decision regarding regarding, among other things, what happens when a parent over pays child support in the case of Allen v. Allen. Judge Staring authored the opinion for the Court, in which Presiding Judge Howard and Judge Espinosa concurred.
Mrs. Allen and Mr. Allen married in 2011 and had a child in April 2012. Mr. Allen suffered a stroke in December 2012 and subsequently began receiving long term disability (LTD) payments through his employer-sponsored plan. Mr. Allen also received social security disability income.
Mrs. Allen filed for divorce in May 2013. A consent decree was issued in April 2014. In January 2015, Mr. Allen petitioned for modification of child support and pursued an order for Mrs. Allen to apply for Dependent Social Security Disability (DSSD) for the child based on Mr. Allen’s disability. Mr. Allen also requested a modification of his support payments based on any change to his income as a result of DSSD.
Mr. Allen claimed that the availability of DSSD reduced the amount of his LTD’s benefits, and had caused him to be perceived as having received overpayments that he was now required to return to the LTD insurer.
Subsequently, Mr. Allen requested an order requiring Mrs. Allen to reimburse the insurer for support Mr. Allen paid using his LTD benefits. Mrs. Allen applied for and received DSSD benefits on behalf of their child. She also received a retroactive DSSD payment of $14,200 that covered the period of May 2014 to April 2015.
Subsequent to the lump sum payment, Mrs. Allen also began receiving $1,195 in DSSD benefits for each month beginning in May 2015. Mrs. Allen argued that Mr. Allen’s duplicate payment was a nonrefundable overpayment under the Arizona Child Support Guidelines (Guideline 26(B)), and also that federal law prohibited transferring the DSSD lump sum she received to Mr. Allen or the LTD insurer.
Mr. Allen asserts the Guidelines entitled him to credits for both DSSD and the support he paid using his own funds, and demanded an immediate transfer of the DSSD payment to allow him to repay the LTD insurer.
The trial court agreed that Mrs. Allen had been “enriched with the overpayments” and that there was “a flaw in the policy”, but it had no authority to order Mrs. Allen to transfer the lump sum payment to Mr. Allen. The court denied Mr. Allen any credit of the $14,200 payment, but terminated child support nunc pro tunc to October 2015. The court also entered a judgment against Mrs. Allen for five months of duplicate payments Mr. Allen had made after monthly DSSD benefits began. Mr. Allen appealed.
Decisions and Discussion
Mr. Allen’s appeal was based on three issues; (1) the trial court erred by not crediting him for the lump sum payment pursuant to Guideline 26(B); (2) granting judgment for reimbursement of five monthly overpayments when the total was six months; (3) terminating rather than modifying his support requirement.
Lump Sum Payment
The Court agreed with the trial court’s conclusion that it lacked authority to order the transfer of the lump sum payment to Mr. Allen or the LTD insurer. However, Mr. Allen argued that he was entitled to credit for both his personal payments and the DSSD the child received as a result of Mr. Allen’s disability.
The trial court denied consideration for the lump sum payment that duplicated Mr. Allen’s support obligation concluding that “it had no choice.” However, the Court on appeal determined that the trial court misapplied Guideline 26(B) which required each month of DSSD be applied to Mr. Allen’s support obligation for the same month.
Accordingly and pursuant to Guideline 26(B)(3), Mr. Allen was responsible for paying the small monthly difference leaving the majority of his personal payments as a credit available to be applied to future support obligations or reimbursed.
The Court reversed the trial court’s denial of credit for Mr. Allen’s personal support payments.
The trial court concluded that Mr. Allen was entitled to a judgment for duplicate monthly payments and provided him with a credit for both his personal payments and the child’s DSSD benefits in accordance with Guideline 26.
The decision to credit Mr. Allen for five months of duplicate payments (May 2015-October 2015) despite finding six were overpaid was inaccurate. The trial court should have credited Mr. Allen for six months of overpayment of child support.
The Court’s remand necessitates the trial court to establish the appropriate solution for Mr. Allen. Guideline 20(A) provides a court to support an order that “deviates” from the Guidelines and order a different amount of child support “after considering all relevant factors” and “concluding certain specific criteria have been met.”
The trial court must make written findings that “application of the guidelines is inappropriate or unjust” and “that deviation is consistent with the child’s best interests.” The Court concludes that in such circumstances a “court might adjust an obligor’s support obligations, require reimbursement of the duplicative payments from funds that are discrete from the benefits…permitted under applicable federal statutes and regulations.” Therefore, it was concluded by the Court that the issuance of a judgment and order for Mr. Allen’s repayment are permissible provided the trial court makes requisite findings.
One relevant factor in the case may include the fact that Mrs. Allen was warned she might have to reimburse Mr. Allen for support payments duplicated by DSSD.
Termination of Support
The extent of child support is controlled by statute and the Guidelines. Generally, this means support is mandatory until the child is emancipated or reaches the age of majority.
Mr. Allen argued at trial that support should be continued and not terminated so that any DSSD benefit payments in excess of his recalculated monthly support could be applied to his share of the child’s medical expenses for the same month.
Further, continuation of the child support order is necessary to manage the parent’s shared responsibility of paying for medical expenses and claiming tax exemptions consistent with the Guidelines. The Court concluded the trial court erred by terminating support rather than recalculating the amount.