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What Happens When a Parent Overpays Child Support - and Wants Credit
Monday, July 06, 2015

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What Happens When a Parent Overpays Child Support - and Wants Credit

Laura Monroe

When a court enters a final judgment ordering the payment of child or spousal support, it expects that that order will be strictly adhered to by both parties. However, frequently one or both parents vary the terms of the order without further consulting the court. This might take the form of overpayments (either intentionally or unintentionally) or directly paying a third party, such as a school or babysitter, rather than making payments to the ex-spouse. Sometimes it is the case that both parties have agreed to the variance due to a change in circumstances or other unforeseen contexts.

Problems arise when the paying parent asks the court for credit (offsetting and reducing future support obligations) or reimbursement. Here’s a look at some of the criteria the court may consider when making a ruling on support credits.

Substantial Compliance vs. No Retroactive Modification
If a party is seeking a support credit, the first thing he or she needs to determine is where his or her particular state of residence stands on the issue. Jurisdictions typically follow one of two rules in determining whether to allow a credit to a paying parent for overpayments or ‘nonconforming support’ payments (i.e. payments to a third party). Some states view allowing a paying parent  the credit as essentially a retroactive modification of the earlier support award. Since generally awards of child and spousal support cannot be retroactively modified prior to the filing of a petition by one of the parties, then credits will generally not be given for payments that vary from the precise terms of the support order.

Other states view credits more favorably and will usually give a paying parent credit if the payments made were essentially in compliance with the purpose of the child or spousal support order. In this case, the retroactive modification clause never comes into play as long as the obligor’s overpayments of support or nonconforming payments served to meet the needs of the supported party as provided for by the original support order. Thus, credit will often be given to the paying parent to offset any support obligation—although a few states also require that the recipient spouse agree to the new arrangement. Wisconsin has gone a step further and enacted a comprehensive statute that codifies the substantial compliance rule so that specific requirements must be met before a credit is issued.

Overpayments on Spousal or Child Support

There are many reasons why overpayments on support are made. Sometimes this is motivated by the paying parent’s desire to help out by providing additional support, or he or she may simply be attempting to build up credit or prepay the support obligation for his or her own benefit. Often, the paying parent doesn’t attempt to seek a credit until he or she falls into arrears. When the overpayments are voluntary, courts do not readily allow the obligor to receive a credit; rather, the overpayments of support are often considered to be a gift. The primary motivation for courts not granting credits for overpayments is the belief that support awards should foster consistency in both parties’ dealings with each other and that the recipient party must be able to depend on the regular receipt of support when planning his or her finances. From the courts’ point of view, if credits were always allowed, than the obligor would have the freedom to vary support payments to suit his or her purposes, leaving the recipient vulnerable to these constant shifts.

When overpayment credits are allowed, it’s often in circumstances where the paying parent made overpayments over a period of time because he or she could afford to and since that time his or her financial circumstances had changes. Courts also tend to be much more willing to give a paying parent credit when the overpayments of support were involuntary, meaning the spouse didn’t willingly or knowingly make such overpayments. As the courts see it, the obligor wasn’t adjusting payments to suit his or her whims but rather due to circumstances beyond his or her control.

Nonconforming Support Payments
Paying parents will often seek credits against their support obligation when they make nonconforming support payments, such as paying for school tuition or signing the child up for day care. In the first case, this most often occurs when the support order requires that payments be made to the clerk of the court or some other entity, which then in turn forwards the support payments to the recipient. Instead, the paying parent bypasses this provision and makes the payments directly to the spouse or custodian of the child. Under these circumstances, courts typically lean toward allowing credit for such payments. But if other things come into play, such as child support payments being paid directly to a child where the custodial parent’s control is circumvented and he or she does not have authority over how that money is spent, then any credit claims are most often denied. The exception here is the state of Mississippi, which will allow credits for child support paid directly to the child, even in the absence of any agreement by the custodial parent.

When the nonconforming support payment is made directly to a third party, the primary question that arises in court is whether the expenses paid served to provide the recipient with support as intended by the support order. In other words, did the payment lower the recipients living costs or was it intended to cover extraneous expenses. Any payments for expenses not contemplated as part of the paying parent’s duty of support will not generally be credited against any support obligations.

When considering the issue of support credits, the primary issue to keep in mind is that courts don’t like when support orders are disregarded. Thus, if either party seeks a variance in court-ordered support payments, it’s always advisable to first seek a judicial modification of the order before making the adjustments. In the end, credits and reimbursements are awarded at the court’s discretion, so it’s best to keep all variances legal and incompliance with the court.

Keywords: support credits, child support credits, spousal support, substantial compliance, retroactive modification, nonconforming support payments, divorce law
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