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Preserving Means Tested Benefits in Child Support Cases

MPLP Summer 2008 Family Law Section Newsletter Article

                Issue 36, Summer 2008

Preserving Means Tested Benefits in Child Support Matters

 

Parents whose sole source of income is governmental means tested benefits, which are awarded based on  need, should not be ordered to pay child support or subject to contempt proceedings to collect support from such benefits.  The most common forms of means tested benefits are Temporary Assistance to Needy Families (TANF), Family Independence Payments (FIP, formerly AFDC), food stamps, Federal Earned Income Tax Credit and Supplemental Security Income (SSI).  Legal advocates for the poor assist recipients of means tested income, particularly those receiving SSI and FIP, many of whom who have been ordered to pay child support or support arrearages from their benefits.  While the Michigan Child Support Formula (MCSF) provides some protection to recipients of means tested income, more is needed.  In particular, the MCSF provision that mandates a minimum support order of $25.00 must be modified to exclude parents whose sole source of income is means tested benefits.

 

SSI and FIP are governmental entitlement programs designed to assist poor and disabled individuals.  In particular, the SSI program, established under Title XVI of the Social Security Act, was intended to assist persons who are elderly or who cannot work because of blindness or disability by setting a minimum guaranteed income level for those individuals.  See 42 USC 1381 et seq.  The current monthly benefit for an individual is $637.00.  To qualify for SSI, an individual must meet income and asset limits and the strict definition of “disability.”  Under the federal statute, an individual is disabled if his/her physical or mental impairment is of such severity that he/she is unable to do his/her previous work and cannot engage in any other kind of substantial gainful employment.  42 USC 1382c(a)(3)(B).  Unlike the Social Security Disability program (RSDI) established under Title II of the Social Security Act and based on the recipient’s work record, the SSI program is needs based and does not provide benefits to dependent children of the recipient.  Benefits are awarded solely on the basis of need and disability and are designed to protect the recipient from poverty. 

 

In order to protect means tested benefits, both federal and state law provides that SSI and FIP benefits are inalienable; that is benefits are not transferable or assignable and are not subject to execution, levy, attachment, garnishment, or other legal process.  See 42 USC 407, 42 USC 1383(d)(1) regarding SSI and MCL 400.63 regarding FIP.  SSI and FIP benefits cannot be garnished for any purpose, including child support collection.  Michigan courts have consistently held that a child support order that would require a parent to pay support from means tested benefits would violate the anti-alienation provisions applicable to such benefits.[1]  Further, the court cannot use its contempt powers to require payment of child support from inalienable, means tested benefits.[2] This special status accorded to SSI, FIP and other means tested benefits and recognized by Michigan courts has been incorporated into the Michigan Child Support Formula.  The formula provides that income from means tested sources “must not be considered income when determining child support.”  2004 MCSF 2.09 and see 2.05(A) regarding SSI.[3]  

 

Further, imputation is not appropriate where a parent’s source of income is means tested benefits.  2004 MCSF 2.10(F); see also Ghidotti v Barber, 459 Mich 189 (1998).[4]  Where a parent has low or no income, the manual provides a special formula for determining the proper amount of child support, which requires a parent to pay a prescribed percentage of his/her income as child support.  2004 MCSF 3.02.[5]    However, a parent whose sole source of income is means tested has no income pursuant to the formula.  Thus, because any percentage of zero dollars is zero, the proper amount of child support where a parent receives only means tested benefits is zero, or no child support.  This conclusion is further reinforced by the inalienable nature of means tested income such that benefits cannot be garnished to pay a child support order.

 

The dilemma is that the formula also mandates a minimum amount of child support of no less than $25.00 per month, unless the court deviates from the formula.  2004 MCSF 1.08.[6]  The minimum child support amount should be inapplicable when SSI, FIP or other means tested benefits is a parent’s only source of income.  It makes no sense to interpret the formula as requiring a minimum support order in circumstances where the court could not issue an income withholding order[7] or a contempt order[8] to ensure that a parent pays that minimum amount.  Consequently, neither a child support order based on some percentage of income, nor a child support order based on some prescribed minimum, is allowable where a parent's sole source of income consists of means tested benefits.

 

One way to reconcile the internal contradictions contained in the formula, as well as the formula’s apparent conflict with state and federal anti-alienation law, is to deviate from the formula by finding application of the formula “would be unjust or inappropriate in a specific case.”  2004 MCSF 1.04.[9]   Application of the formula to an SSI or FIP recipient would be inappropriate base on the formula’s provision that means tested benefits are not income and the legal mandate against alienating such benefits.  It would also be unjust to apply the formula to a poor or disabled individual whose sole source of income is intended to protect the recipient from poverty.  Therefore, where such an argument is made, the court should deviate from the formula and order zero support.

 

However, this case by case approach is inefficient and burdens the courts and the child support enforcement system, particularly where SSI and FIP benefits cannot be garnished and the contempt power of the court cannot force payment.  A better approach is to modify the section of the formula that mandates a minimum support order in all cases by adding a provision that excludes those cases where a parent’s sole source of income is means tested benefits.  Thus, in such cases, the recipient would not be subject to a minimum support order and would not have to make the case for deviation from the minimum amount.  The benefits awarded to a poor, disabled recipient would be protected and available to protect the recipient from poverty. 

 

 



[1] See Proudfit v O’Neal, 193 Mich App 608 (1992) (defendant’s means tested benefits should not be considered as income to determine child support); Lapeer Co Dep’t of Social Services v Harris, 182 Mich App 686 (1990) (general assistance benefits are not income and are not subject to withholding to collect child support); Causley v LaFreniere, 78 Mich App 259 (1977) (a support order would conflict with anti-alienation provisions if defendant was ordered to pay support while his only source of income was means tested ADC benefits).

[2] In Gonzalez v Gonzalez, 121 Mich App 289 (1982), the court held that an order requiring the defendant to pay child support or serve jail time where his sole source of income was means tested ADC benefits was not within the power of the court. 

[3] The 2008 child support formula, effective October 1, 2008, continues this specific provision at 2008 MCSF 2.04.

[4] Note that the 2008 formula does not explicitly exclude means tested income from imputation.  Rather, the court must consider a parent’s potential income, defined as actual ability to earn and reasonable likelihood of earning the potential income.  See 2008 MCSF 2.01(G).  Application of the 2008 provision should eliminate recipients of means tested benefits (which are not considered income) from imputation.

[5] After 10/1/08, see 2008 MCSF 3.02(C) and (D).

[6] This provision is continued in the 2008 formula.  See 2008 MCSF 3.01(C).

[7] See Proudfit and Harris, supra.

[8] See Gonzalez, supra.

[9] After 10/1/08, see 2008 MCSF 1.04.


    


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