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A Better Partnership
June 28, 2012

COA Opinion: Parent may elect to not receive social security benefits when the elections is for economic reasons, without the forfeited income being imputed against him or her in calculating child sup

In Clarke v. Clarke, the Michigan Court of Appeals reversed the trial court's order imputing social security retirement benefits as income to the plaintiff. In Clarke, the plaintiff elected to take early social security retirement benefits. After learning that his minor son would also be eligible for benefits as a dependent, the plaintiff contacted the defendant and negotiated for splitting the child's dependent benefits between the defendant and himself. However, when the plaintiff and his son began receiving their benefits, the dependant benefits went directly to the defendant. When the plaintiff learned that the defendant was getting these benefits, he withdrew his social security application and repaid all the monies that he and his son had received. The trial court imputed the lost social security income to plaintiff under the theory that the plaintiff's social security benefit represented an unexercised ability to earn income. The Michigan Court of Appeals disagreed, finding that if the reason for not taking the benefits early was economic in nature, then the income could not be imputed to the plaintiff. The Court then remanded the case to the trial court in order to determine if the plaintiff had chosen to hold off on his benefits for an economic reason or because he didn't want the defendant to receive the dependent benefits.

The Court of Appeals also affirmed the trial courts modification of the court order granting the defendant the federal dependency tax exemption for the minor child. The Court found that the trial court had not abused it discretion when it found that a change in circumstance had occurred that warranted modification of the order. The change in circumstances was that the minor child had gone from living with both of his parents half of the time to living full time with the defendant. Previously, the parents had been splitting the tax exemption every other year in order to mimic their custody arrangement.

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