The typical child support payment case involves a parent who has not paid any or all of his/her child support obligation. However, the opposite occasionally occurs: when a parent overpays his/her child support obligation. What happens then? Is the parent out of luck, or is there something that can be done? Does a parent receive a refund or a credit for the overpayment?
Overpayment: How Does It Happen?
Generally, there are four instances in which overpayment occurs. The first is when a temporary child support obligation is reduced by a final judgment. In North Dakota and Minnesota, temporary or “interim” child support can be imposed sometime after a paternity, custody, or divorce case is commenced, but before the trial has occurred and the final judgment is entered. Temporary child support ensures that children are provided for financially during the pendency of a case that might last months or years. When the final trial occurs, the permanent child support obligation is established in a judgment. The child support in the judgment might be different than the child support in the temporary order, and can be made retroactively effective. In other words, if Bob has paid $1,000 per month for a year pursuant to a temporary order, but the final judgment establishes Bob’s child support at $600 per month, retroactive for the past year, then Bob has overpaid on his child support by $400 per month for 12 months, or $4,800 total.
The second situation is when child support is modified. Generally, when a parent successfully modifies child support, the new obligation is retroactive to the time when the motion was filed, both in North Dakota and Minnesota. So if Bob pays $1,000 per month in child support, makes a motion to modify child support on January 1st, his motion is granted on July 1st and new child support is $600 per month, then his child support will probably be retroactive to January 1st, and he’s overpaid by $400 per month for the last six months; a total of $2,400.
The third scenario is when a child support order is vacated. This is rare. It occurs when custody has transferred the other parent for a period of time (but the parent has continued to pay child support), or when the court determines that it didn’t have “jurisdiction” over child support. The jurisdictional issue can arise when it’s later discovered that another state has exclusive jurisdiction over child support, a party wasn’t properly served notice of the case, etc. When this occurs, the court might vacate the child support order and a parent has paid child support he/she wasn’t under an obligation to pay.
Finally, the overpayment can occur when a parent pays child support to another parent for a period of time, and later the child receives a lump-sum payment of social security benefits as a dependent of the parent. Perhaps the parent is disabled and the child qualifies as a dependent for the parent’s social security disability benefits in the amount of $500 per month. If the benefits are back-dated for a year, the parent will receive $6,000 in a lump sum. State law requires that those benefits are credited toward child support. Therefore, $6,000 of child support paid by the other parent is suddenly an overpayment.
Compensation: How Can I Be Repaid For My Overpayment?
Once an overpayment has occurred, how can the parent be repaid? Minnesota law states that an overpayment must first be applied to child support arrearages or spousal maintenance arrearages, or other debts owed to the other parent, and then the ongoing child support obligation must be reduced by 20 percent until the overpayment is extinguished. If Bob has overpaid on his child support by $5,000, his monthly obligation is $500, and he has a $2,000 child support arrearage and a $2,000 spousal maintenance arrearage, then the $5,000 would first be applied toward his arrearages ($4,000), leaving $1,000. Then his child support obligation ($500) would be reduced by 20 percent ($100) each month for 10 months (Bob would pay $400 instead of $500 each month), at which point the overpayment would be extinguished, and Bob would start paying $500 per month in child support again.
In Minnesota, if the parent who has overpaid no longer has a child support obligation, then obviously the parent’s future child support payments can’t be reduced to make up for the overpayment. In that situation, a court must first determine what is fair to the parties, and what is in the best interests of the children, and then decide whether the obligor should be repaid by the obligee, and how repayment will be made.
In North Dakota, an overpayment works similarly to Minnesota. The overpayment amount is offset by whatever child support or other debts the parent owes to the other. Then, the court can order the remaining overpayment to offset future child support, although there’s no “20 percent” reduction limit on future child support, meaning the obligor might not pay any child support until the overpayment is entirely offset by the ongoing obligation. If there is no ongoing child support obligation to reduce, then case law suggests the obligor should be reimbursed by the obligee (in fact, an obligee might be required to reimburse the obligor even if there is an ongoing obligation in North Dakota).
Many aspects of modification of child support, like those mentioned in this article, are complicated. Having an attorney to assist you could make the difference between success and failure. To speak with an attorney about your child support or other family law case, call the SW&L family law team at 701-297-2890 or email us via the contact form below.
The information contained in this article and on this website is for informational purposes only. Do not rely on the information on this website as legal advice.