Opinion ID: 1349098
Heading Depth: 1
Heading Rank: 6

Heading: Social Security Dependency Benefits.

Text: A party seeking to modify a child support order must show a material change in circumstances which has occurred subsequent to the entry of the original decree or a previous modification and was not contemplated when the decree was entered. Gammel v. Gammel, 259 Neb. 738, 612 N.W.2d 207 (2000). Neither party disputes on appeal that a modification was appropriate. Terri first asserts that the district court erred in failing to treat the Social Security dependency benefits Terri received on behalf of Jacqueline because of Terri's disability as part of Terri's income. In calculating Rodney's child support obligation pursuant to the Guidelines, the district court treated the benefits in the following manner: (1) Percentage of Contribution. The court did not include the benefits in either Terri's or Rodney's net monthly income when calculating the percentage of contribution for each parent. (2) Combined Monthly Net Income. The court added the benefits to Terri's and Rodney's monthly net incomes in order to arrive at the combined monthly net income. (3) Monthly Support. The court used the combined monthly net income, which included the benefits, to determine monthly support from table 1 of the Guidelines. (4) Reduced Monthly Support. The court subtracted the benefits from the monthly support figure found in table 1. (5) Each Parent's Monthly Share. The court multiplied the reduced monthly support by each parent's percentage of contribution to arrive at each parent's monthly share, with Rodney's child support obligation's being his monthly share. The district court patterned its calculation after the approach used by the Nebraska Court of Appeals in Ward v. Ward, 7 Neb.App. 821, 585 N.W.2d 551 (1998), which involved, inter alia, Social Security benefits received on behalf of a child by the custodial father based on the earnings of a deceased parent. Terri urges that instead of the approach detailed above that was used by the district court, the dependency benefits received on behalf of Jacqueline should have been treated as part of Terri's net monthly income and that the monthly support figure should not have been reduced by the amount of the benefits. The result of such treatment, Terri asserts, would be to increase Rodney's child support obligation from $282 to $471 per month. Under the treatment urged by Terri, Rodney's monthly net income is $2,002 and Terri's monthly net income, including the $327 of Social Security dependency benefits received on behalf of Jacqueline, is $982. Using the combined monthly net income of $2,984, Terri found total monthly support to be $703. Multiplying the total monthly support of $703 by Rodney's contribution of 67 percent, Terri asserts that Rodney's monthly child support obligation should be $471 per month. We agree that the appropriate treatment of the Social Security dependency benefits is that urged by Terri. The district court based its calculation on the approach used by the Court of Appeals in Ward v. Ward, supra . However, Ward and the instant case are distinguishable. The parties in Ward were the child's adoptive parents, and the benefits received on behalf of the child were based on the earnings of a deceased parent who obviously was not a party to the case. In the present case, the benefits received on behalf of Jacqueline are based on Terri's disability and her prior earnings. The present case and Ward further differ. In Ward, the benefits could not be directly attributed as income to one or the other of the parties because the benefits were based on a deceased parent's earnings, whereas, in the instant case, the dependency benefits are in lieu of a party's income. The approach taken by the Court of Appeals in Ward was a deviation from the Guidelines. In general, child support payments should be set according to the Guidelines established pursuant to Neb. Rev.Stat. § 42-364.16 (Reissue 1998). Sears v. Larson, 259 Neb. 760, 612 N.W.2d 474 (2000). The Guidelines permit deviations under specified circumstances, including circumstances in which application of the Guidelines in an individual case would be unjust or inappropriate. Id. The Court of Appeals found in Ward that a deviation from the Guidelines was justified because while the benefits received on behalf of the child were part of the total family income, they were not directly attributable to one of the parents who were parties to the proceedings and that strict application of the Guidelines would not result in a fair and equitable child support order. By contrast to Ward, the Social Security dependency benefits in the present case are directly attributable to Terri as they reflect her prior earnings and are the result of her current disability. It would not be unfair or inequitable to consider the benefits as part of Terri's income in calculating support obligations, and a deviation from the Guidelines is therefore not indicated. Terri asserts that the dependency benefits received on behalf of Jacqueline should be included as part of Terri's monthly income pursuant to the Guidelines. Paragraph D of the Guidelines requires that total monthly income should include, with certain exceptions, income derived from all sources. The Guidelines contemplate that income for purposes of child support may differ from taxable income and do not prevent consideration of tax-exempt benefits in determining the amount of a parent's income derived from all sources. State on behalf of Hopkins v. Batt, 253 Neb. 852, 573 N.W.2d 425 (1998). The approach Terri proposes is consistent with cases in which we have held that when a noncustodial parent becomes disabled after a child support order has been issued, Social Security dependency benefits paid on behalf of the child based on the noncustodial parent's disability can be applied to satisfy the noncustodial parent's child support obligation. See Gress v. Gress, 257 Neb. 112, 596 N.W.2d 8 (1999) (Social Security payments made to child on account of parent's disability should be considered as credits toward noncustodial parent's court-ordered support obligation in absence of circumstances making allowance of such credit inequitable); Hanthorn v. Hanthorn, 236 Neb. 225, 460 N.W.2d 650 (1990); Schulze v. Jensen, 191 Neb. 253, 214 N.W.2d 591 (1974). See, also, Brewer v. Brewer, 244 Neb. 731, 509 N.W.2d 10 (1993) (Social Security benefits on behalf of child based on earnings of deceased father applied to deceased father's child support liability). In those cases, the reasoning was that such benefit payments were the result of the parent's disability and were a substitute for the parent's loss of earning power and his or her obligation to pay for the support of his or her dependents. See Gress v. Gress, supra . This same reasoning leads to the conclusion that Social Security dependency benefits received on behalf of a child as a result of a custodial parent's disability should be included in the monthly net income of the parent whose disability resulted in the payment of dependency benefits rather than as a credit to the nondisabled parent, as was done in this case. We note that paragraph D of the Guidelines requires the inclusion of income from all sources except, inter alia, all means-tested public assistance benefits. We have recently defined a means-tested public assistance benefit to mean a benefit that includes a payment in money, or by assistance in kind, to, or for the benefit of, a person where (1) the eligibility for the benefit or (2) the amount of the benefit is determined on the basis of the income or resources of the recipient, such that the benefit decreases as the recipient's income increases. Riggs v. Riggs, 261 Neb. 344, 351, 622 N.W.2d 861, 865 (2001). The Social Security dependency benefits in this case are not means-tested public assistance benefits within the meaning of the Guidelines and are, therefore, subject to inclusion as income... from all sources under paragraph D. The Social Security Administration has stated that as to the programs it administers, for purposes of the federal Personal Responsibility and Work Opportunity Reconciliation Act of 1996, only supplemental security income benefits are `Federal means-tested public benefits.' 62 Fed. Reg. 45,284 (August 26, 1997). At trial in the instant case, Terri offered documentary evidence from the Social Security Administration describing her disability benefits. The text of such evidence makes a distinction between the Social Security disability insurance program, which is based on prior earnings of the recipient, and the supplemental security income program, which is based on financial need of the recipient. Terri's evidence establishes that the benefits received on behalf of Jacqueline are part of the disability insurance program rather than the supplemental security income program. The benefits in the present case are not means-tested public assistance benefits that would be excluded from income pursuant to the Guidelines. We conclude that the circumstances of the instant case do not justify the sort of deviation from the Guidelines that was taken in Ward v. Ward, 7 Neb.App. 821, 585 N.W.2d 551 (1998), and that the district court therefore erred in the manner in which it calculated Rodney's child support obligation. We further conclude that the Social Security dependency benefits received on behalf of Jacqueline because of Terri's disability should have been included in Terri's income in calculating Rodney's child support obligation. Treating the benefits as Terri's income, we find the combined monthly income to be $2,984. Under table 1 of the Guidelines, when combined monthly income is $2,984, the monthly support for one child is $697. Multiplying $697 by Rodney's contribution of 67 percent results in a monthly child support obligation for Rodney of $467. We therefore reverse the portion of the district court's order modifying the amount of child support to be paid by Rodney and, consistent with the calculation recited above, remand the cause to the district court with directions to enter an order requiring Rodney to pay $467 per month in child support retroactive to August 1, 1999, the first day of the month after Robert turned 19.