Children and Youth Services of Allegheny County v. Chorgo

• Decision Date: 19 April 1985
• Parties: CHILDREN AND YOUTH SERVICES OF ALLEGHENY COUNTY v. William CHORGO, Appellant.
• Court: Pennsylvania Superior Court

Page 1374

491 A.2d 1374

341 Pa.Super. 512

CHILDREN AND YOUTH SERVICES OF ALLEGHENY COUNTY v. William CHORGO, Appellant.

Superior Court of Pennsylvania.

Argued June 19, 1984.

Filed April 19, 1985.

David M. Priselac, Pittsburgh, for appellant.

Alida J. Kornreich, Pittsburgh, for appellee.

Before BROSKY, JOHNSON and MONTGOMERY, JJ.

BROSKY, Judge.

This appeal is from an order denying credit toward a support order for Social Security payments made to appellant's children. Appellant contends that his child support obligation should be reduced by the amount of the Social Security retirement payments. We agree, but not as to the arrears which accumulated before the Social Security payments began. Accordingly, we reverse.

Children and Youth Services (CYS) commenced this action to enforce a support order and to compel the payment of arrearages. The court below held that the support order should continue at the prior rate; that no credit should be given towards the support obligation for Social Security benefits of the appellant paid directly to the children; and that arrearages should be paid at the rate of $50 per month.

Two broad issues are before us on this appeal. First, whether, and under what conditions, the support obligation should be reduced by the amount of Social Security retirement benefits paid to the children. Second, whether, and under what conditions, the arrearages should be reduced as a result of these payments. Each issue will be treated in turn. ¹

Credit for Social Security Payments

Within this issue there are three questions to be answered. Why should credit be given or not given? If credit is to be given, when? Finally, if credit is to be given, how much? Again, these questions will be treated in turn.

First, why should credit be given? The first cases we will quote seem to answer this question with, "Why not?" The Vermont Supreme Court noted that: "These payments are, in a sense, a substitute for the wages the obligor would have received but for the disability, and from which the court ordered payments would otherwise have been made.... In theory, at least, the actual source of payments is of no concern to the party having custody as long as they are in fact made." Davis v. Davis, 141 Vt. 398, 401, 449 A.2d 947, 948 (1982). ²

The same practical approach was taken in Binns v. Maddox, 327 So.2d 726, 728 (Ala.Ct.App.1976).

An order of support is for the benefit of the children, even though directed to be paid to the mother or other custodian. If the sum directed to be paid by the father is paid by the government through social security benefits derived from the account of the father, the purpose of the order has been accomplished. The father is entitled to be credited with such payments against his liability under the decree.

In a similar vein, the Missouri Court of Appeals wrote the following: "The use of social security payments to satisfy a child support obligation is merely a change in the manner of payment; the nature of the funds is the same." McClaskey v. McClaskey, 543 S.W.2d 832 (Mo.Ct.App.1976).

None of the foregoing provides an extremely persuasive rationale for the acceptance, vel non, of credit. A more cogent rationale oft-quoted by other jurisdictions, is presented in Andler v. Andler, 217 Kan. 538, 542-3, 538 P.2d 649, 653 (1975). Andler focuses on the "earned" character of Social Security benefits. Since the person obliged to pay support has, in effect, paid for those benefits in advance, he should, it is argued, receive credit for them. ³

Social Security benefits paid to the appellee for the benefit of the parties' minor children as the result of the appellant's disability may not, however, be regarded as gratuitous. On the contrary, the payments received by the appellee 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.

The United States Congress has seen fit to place the federal government in the role of insurer in order to afford members of the work force the protection and security of insurance against future disability. The fundamental nature of the Social Security system is a form of insurance in every sense of that word.

Benefits paid out by a governmental insurer, under a policy of insurance for which the insured has paid premiums, are no more gratuitous than benefits paid out by a private insurance company.

....

The insurance company here in issue was considered by the federal district court in Schmiedigen v. Celebrezze, 245 F.Supp. 825 (D.D.C.1965) where the court said:

[The] payments prescribed by them [the Social Security Act] are not gratuities or matters of grace; they are not public assistance; they are not welfare payments. On the contrary, the law created a contributory insurance system, under which what in effect constitute premiums are shared by employees and employers. Consequently, in spirit at least, if not strictly and technically, the employee, who throughout his working life has contributed part of the premiums in the form of deductions from his wages or salary, should be deemed to have a vested right to the payments prescribed by the statutory scheme, which in effect comprises the terms of his insurance policy. He has earned the benefits; he is not receiving a gift...." (p. 827.)

In Craver v. Craver, 649 S.W.2d 440, 443 (Mo.1983), the high court of Missouri rejected the holding of McClaskey, viewing the matter strictly and technically, rather than in spirit.

We must reject the notion that a contributor possesses any significant property interest in Social Security funds in the hands of the government, for it ignores both the theory behind, and the reality of, the Social Security system. First, the relationship between the government and the contributor is not contractual. Flemming v. Nestor, 363 U.S. 603, 610 [80 S.Ct. 1367, 1372, 4 L.Ed.2d 1435] (1960). Second, Congress has always specifically reserved the "right to alter, amend, or repeal any provision" of the Social Security Act. See 42 U.S.C. § 1304 (1975). Consequently, whatever equitable interest a contributor might possess is only contingent. It does not rise to the level of a vested property interest.

It appears that the court in Craver lost sight of the question presented by this type of case. The issue is not whether, technically speaking, a Social Security recipient has a vested right in the nature and amount of the benefits. Rather, the enquiry should be whether it is fair and just that the support obligor be given credit for these benefits. Part of this enquiry would certainly go to the nature of his investment in the program--as in Andler. Another, essential part of the determination would be the difference, if any, to the obligee--as in Davis, Binns and McClaskey.

Both portions of this dual enquiry are resolved in favor of allowing credit. First, since the obligor has paid in advance for these benefits over the years (albeit mandatorily), they should be recognized as the fruits of his labor. Second, since the child will still receive the same amount of support which the court has decided he should have, it does not matter to that party that the obligor is given credit.

Accordingly, we hold that credit should be given for social security payments made directly to the child when the obligor's employment occasioned the benefits. As a consequence, the amount of child support directly payable by appellant should be reduced by the amount of the social security benefits.

Second, when should credit be given? Four options are before us: that credit must always be given; that credit will not be given unless special requirements are met; that the court may in its discretion award credit; and finally, that there is a presumption that credit will be applied, which is rebutted only by articulated reasons supporting a conclusion to the contrary in the court's support order.

Research has revealed no case which clearly adopts the first option of mandatory application.

The second of these options is illustrated by the following quotation from Joachim v. Joachim, 57 A.D.2d 546, 547, 393 N.Y.S.2d 63, 64 (1977): "We hold that the Social Security payments to plaintiff for the benefit of the child do not relieve defendant, even pro tanto, from his obligation to pay for the support of his child in the absence of a showing of financial inability."

The third option is followed in Chase, supra, 74 Wash.2d at 259, 444 P.2d at 149.

The disability and resulting entitlement to social security are changes in condition of the parties to be considered in a modification proceeding but do not give rise to a modification or deduction without affirmative action by the court for they are not necessarily determinative. The father may be independently wealthy; or he may, in the interim, have inherited property. Benefits from private or public retirement systems may have accrued and become payable to him. In short, many developments affecting the economic condition of the parties may have occurred which would not permit or warrant a modification of the decree to the extent of deducting the social security benefits for dependent children from the child support ordered in a divorce.

The fourth option was chosen in Davis, supra, 141 Vt. at 401, 449 A.2d at 948-49.

The cases from other jurisdictions which have considered this question are not uniform in their approach to the problem. Some courts appear to hold that credit for government benefits paid to the party...