FRENS
v.
FRENS
Docket No. 124080.
Michigan Court of Appeals.
Decided November 14, 1991, at 9:05 A.M.Thomas M. Stellard, for the plaintiff.
Ryan, Podein & Joyce, P.C. (by James M. Joyce), for the defendant.
Before: CAVANAGH, P.J., and MAHER and FITZGERALD, JJ.
FITZGERALD, J.
Defendant appeals as of right from an order of the trial court denying his motion to modify child support. Defendant argues that the trial court erred in deciding that the social security benefits received by plaintiff on behalf of her minor child because of defendant's disability could not be credited toward his child support arrearage. We agree and reverse.
When the parties were divorced on January 23, 1981, plaintiff was awarded custody of their two minor children and defendant was ordered to pay child support. The parties do not dispute the fact that the defendant was unable to meet his child support obligations.
During this period, defendant became disabled and applied for social security disability benefits. Following a hearing, a referee determined that defendant had been disabled on January 1, 1986, and in an award certificate dated July 12, 1988, the Social Security Administration informed plaintiff that her son was entitled to $7,537.75 in overdue benefits. Plaintiff was also informed that her son would receive a monthly award of $343 as long as defendant suffered from his disability.
*656 On September 9, 1988, in light of defendant's disability and the receipt of social security benefits, the friend of the court petitioned the trial court for a modification of his child support obligations. The friend of the court recommended that defendant's future support obligations be terminated and that he be given a $7,537.75 credit toward the child support arrearage that had accumulated since 1981.
The trial court agreed that defendant's future child support obligations should be terminated because of the change in circumstances, but concluded that the monies received "from the defendant through the Social Security Administration are monies separate and apart from any child support obligation that is the obligation of the father-defendant." The trial court also stated that "monies that were received by the plaintiff and the minor child of the parties are not to be credited against the arrearage which accumulated when the defendant was and is presumably ablebodied." It is this last part of the trial court's opinion on which this appeal is based.
Although this is an issue of first impression in Michigan, the majority of states that have reached an opinion on the issue whether a father is entitled to credit against child support payments for social security or Veterans' Administration benefits paid for the support of a minor child have held that a father is entitled to credit for such payments.[1] The arguments in defendant's favor are compelling:[2]
*657 [T]he payments received by the appellee [custodial mother] are for the children as beneficiaries of an insurance policy. The premiums for such policy were paid by the appellant for the children's benefit. The purpose of Social Security is the same as that of an insurance policy with a private carrier, wherein a father insures against his possible future disability and loss of gainful employment by providing for the fulfillment of his moral and legal obligations to his children. This tragedy having occurred, the insurer has paid out benefits to the beneficiaries under its contract of insurance with the appellant, and the purpose has been accomplished. [Andler v Andler, 217 Kan 538, 542-543; 538 P2d 649 (1975).]
The dissent concludes that on the specific facts of this case, where the arrearage started to accrue before defendant's disability, defendant is not entitled to have his outstanding support obligation satisfied out of the lump sum disability payment made to the minor child. The trial court apparently took the same position:
[The monies received] from the defendant through the Social Security Administration are monies separate and apart from any child support obligation that is the obligation of the father-defendant. [Thus], the amounts of monies [sic] that were received by the plaintiff and the minor child of the parties are not to be credited against the arrearage which accumulated when the defendant was and is presumably able-bodied.
The trial court's reasoning is illogical. The court terminated defendant's future child support obligations because of a change in circumstances as a *658 result of defendant's disability. It follows, therefore, that the change in circumstances occurred in January 1986 when defendant became disabled. We conclude that defendant is not entitled to reduce the arrearages that accumulated before the social security payments began. See Children & Youth Services v Chorgo, 341 Pa Super 512; 491 A2d 1374 (1985). However, the lump sum disability payment covers the period of January 1986 through July 12, 1988. Contrary to the trial court's findings, defendant was not "able-bodied" at that time, and, therefore, we hold that defendant is entitled to have the payment credited to the arrearage that accumulated after January 1986. Any arrearage that accumulated between the 1981 judgment of divorce and January 1986 remains.
Reversed.
MAHER, J., concurred.
CAVANAGH, P.J. (dissenting).
I respectfully dissent. Defendant argues that one of the parties is going to receive a windfall in the amount of $7,537.75. Defendant also argues that some jurisdictions have ruled that government benefits for dependents should be credited against support orders. See Cash v Cash, 234 Ark. 603; 353 S.W.2d 348 (1962), Horton v Horton, 219 Ga 177; 132 SE2d 200 (1963), Andler v Andler, 217 Kan 538; 538 P2d 649 (1975), and Cohen v Murphy, 368 Mass 144; 330 NE2d 473 (1975). On the specific facts of this case, I am convinced that the minor child, and not the father, is entitled to the lump sum disability payment and that the father's outstanding support obligation should not be satisfied out of this fund.
The Social Security Administration has taken the position that "in instances where a parent is responsible for making court-ordered support payments, *659 such legal obligation cannot be discharged by denominating children's disability insurance benefits as `child support' from the parent." Hennagin v Yolo Co, 481 F Supp 923, 924 (ED Cal, 1979) quoting from Fuller v Fuller, 49 Ohio App 2d 223; 360 NE2d 357 (1976). This position is consistent with the theory that the children would be entitled to these benefits whether or not the parents were divorced, a theory relied on by some of the jurisdictions that have refused to grant a credit against child support obligations. See, e.g., Craver v Craver, 649 S.W.2d 440 (Mo, 1983); Nibs v Nibs, 625 P2d 1256 (Okla, 1981).
I believe that the position taken by the Social Security Administration is sound and particularly appropriate here where the arrearage started to accrue long before the father was disabled. The equities definitely favor the plaintiff and the minor child, a factor either not present or not addressed in the majority of the cases that have reached the opposite result. See In re Estate of Patterson, 167 Ariz 168; 805 P2d 401 (1991), and the cases cited there. I would affirm the decision of the trial court.
NOTES
[1] See, e.g., Cash v Cash, 234 Ark. 603; 353 S.W.2d 348 (1962); Horton v Horton, 219 Ga 177; 132 SE2d 200 (1963); Andler v Andler, 217 Kan 538; 538 P2d 649 (1975); Perteet v Sumner, 246 Ga 182; 269 SE2d 453 (1980); Newton v Newton, 622 S.W.2d 23 (Mo App, 1981); Hanthorn v Hanthorn, 236 Neb 225; 460 NW2d 650 (1990); Griffin v Avery, 120 NH 783; 424 A2d 175 (1980); Mask v Mask, 95 NM 229; 620 P2d 883 (1980).
[2] Some courts have also reasoned that disability payments are a substitute for a father's loss of earning power. The payments represent money earned and contributed through working and constitute payments in the nature of support. See, e.g., Folds v Lebert, 420 So 2d 715 (La App, 1982).