Opinion ID: 1111296
Heading Depth: 3
Heading Rank: 4

Heading: Averaging Michael's Income

Text: Michael sought modification in part because he claimed that his monthly adjusted income had decreased from over $10,000 in 1992 to less than $6,000 in 1995. [8] The court averaged Michael's income for the three-year period between 1992 and 1994 and concluded that because Michael's average adjusted income was $10,000 per month, his income had not declined as alleged. Michael does not dispute the finding that his average monthly income was approximately $10,000 per month. He instead argues that the trial court erred in relying on the 1992-94 average, when the relevant period of changed circumstances began in January 1995. He contends that the superior court should have compared the $10,000 average with his substantially reduced 1995 income of $6,000 per month. We agree with Michael's argument that because Rule 90.3(h)(2) provides that child support arrearages may not be modified retroactively, it was incumbent upon him to promptly apply for a modification of child support when [the] material change in circumstances occur[red]. Alaska R. Civ. P. 90.3, Commentary X. He did just that, applying for modification in January 1995 when his income allegedly declined. The superior court erred in not considering January 1995 onward as the relevant period of changed circumstances, instead of relying solely on the 1992-94 average. [9] On remand, the trial court should consider Michael's adjusted income from January 1995 forward and should also determine whether any reduction in income is permanent or temporary. See Curley, 588 P.2d at 291 (The change ordinarily must be more or less permanent rather than temporary.); see also Patch, 760 P.2d at 530 ([A] trial court should be reluctant to modify child support obligations when the obligor's loss of income appears only temporary.). The trial court may also consider Michael's future earning capacity. We have stated that a child support obligation is related, but not limited, to the parent's present income. Patch, 760 P.2d at 529. As a general principle, the trial court should consider the nature of the changes and the reasons for the changes, and then ... determine whether, under all the circumstances, a modification is warranted. Pattee v. Pattee, 744 P.2d 658, 662 (Alaska 1987) (citation omitted). [10]