The below story and example regards the marriage of Hall and Frencher.
In 2003, a trial court ordered Bruce Frencher Sr. to pay $507 in child support for his daughter, Kayla. In 2011, a trial court reduced the child support payments to $276 per month retroactive to 2010. It further reduced them to $82 per month in March 2011. At a hearing in 2011, a trial court ordered Bruce to pay child support of $8.50 per month and found that he owed child support arrears of $16,421 from the period of January 2007 to 2011.
Further, the court ordered Bruce to pay $150 a month towards those arrearages and warned him that interest would accrue. Meanwhile, Bruce had begun receiving Social Security Disability benefits, which meant that Kayla was receiving social security derivative benefits of $960 due to his disability. Social Security also made a lump sum payment of $20,000 in derivative benefits for a period of July 2012 to April 2014. Bruce's ex-wife Winifred Hall gave him half of those benefits. At a hearing on January 13, 2015, Winifred and Bruce stipulated that he had made payment of various amounts towards the child support arrearages from September 2011 to June 2014, and those payments totaled $5,151. The trial court subtracted that amount from the total arrears as of August 2011 and concluded that Bruce still owed roughly $11,000 in arrearages. The court then calculated that Social Security had paid $8.50 per month for Bruce's child support obligation for 22 months for a total of $187 and further subtracted that from the arrearage, leaving a balance of $11,083 unpaid. The court also found that since 2014 Social Security derivative benefits had fully paid Bruce's child support obligation because they were a higher amount than his income. Bruce appealed.
However, the trial court continued to say that any of the overpayments above $8.50 would not be applied towards the arrearage and he still owed $11,083. Bruce contented that the lower court should have applied all the excess derivative benefits towards his child support arrears, not just those that accrued after the payment began. They noted that Family Code section 4504(b) provides that social security derivative payments shall be credited towards the amount ordered by the court to be paid to the non-custodial parent for the support of the child. CCP695.221 requires that the money be credited first against the current month support then against the remaining principal unsatisfied judgment and then toward accrued interest.
The appellate court concluded that the trial court erred by failing to apply Social Security derivative payments to the principals on arrearages and then to the interest. Summing up, the Justice reversed the portion of the trial courts judgment that concerned the amount of arrearages that Bruce owed, and remanded for the court to recalculate the amount in line with the current family Code Section Code 4505(b).