Circumstances change and parents paying child support often need a reduction in their monthly support obligation. Those with a duty to pay child support, based on a Uniform Order of Support, cannot simply stop or reduce their child support payments. Child support may only be reduced by order of the court. To obtain such an order, one must first petition the court and request a reduction in child support. The other parent is allowed to respond to the petition for reduction and there is often a hearing where evidence is presented before the court grants a reduction.
Section 510 of the Illinois Marriage and Dissolution of Marriage Act deals with child support reductions. (750 ILCS 5/510). Under Section 510, the court will only allow a reduction or "modification" of child support if the petitioner, the one seeking a modification, shows a "substantial change in circumstances." Id. Examples of a substantial change in circumstances include, but are not limited to, a loss of job, a cut in pay, an injury or illness that limits one's ability to work, and retirement.
For this blog, I would like to focus on retirement. Naturally, when one retires from a job, it is assumed that they will no longer earn the same salary as when they were working. However, a court will review the totality of one's finances before agreeing that income was reduced by retirement.
For example, Michael J. Hickey earned $180,000 a year before he retired at age 64. In re Marriage of Cherie A. Verhines and Michael J. Hickey, 2018 IL App (2d) 171034, paragraph 1. Mr. Hickey petitioned for a modification of his child support. At a hearing, it was determined that his income in retirement was reduced from $180,000 a year to $78,000. Id. Thus, the court cut his child support obligation in half. Ms. Verhines appealed the trial court's reduction in child support claiming the court erred by not including as income $83,000 in deferred compensation and for not including any portion of a $400,000 withdrawal from Mr. Hickey's retirement account. Id. at paragraph 2.
The appellate court agreed with Ms. Verhines and found that the trial court erred by not including the deferred compensation and retirement withdrawals as income but also erred for not including other income of Mr. Hickey such as $2.585 million in brokerage accounts and his ownership of three homes. Id. at paragraph 3. The court noted that in certain circumstances, IRA withdrawals cannot be considered income for child support purposes but it did not find such circumstance existed for Mr. Hickey. Id. at paragraphs 65-67. The court found that Mr. Hickey's IRA withdrawal was not made for need but for the purpose of maintaining an expensive lifestyle. Mr. Hickey regularly traveled from his home in Naperville, Illinois, to his vacation home in Bozeman, Montana. He also regularly traveled to New England and to various vacation spots around the world, spending an estimated $60,000 in travel per year.
The Appellate Court stated: "Michael's spending patterns show the power of his capital and demonstrate that there has been no change in his financial circumstances to warrant a reduction in his support." Id. at paragraph 93.
Therefore, retirement does not automatically result in a "substantial change in circumstances" for purposes of a reduction in child support. The court will look to the totality of one's finances to determine actual income, such as in Hickey, where the court looked to Mr. Hickey's deferred compensation and his large withdrawal from his retirement account in addition to investment income, and his lifestyle to determine his actual income. Other factors that were discussed in Hickey, but not mentioned here, include the needs of the child and the other parent's income.
Filing a petition for modification of child support is very complex and should never be done without the assistance of an attorney. I regularly appear in court all over Northern Illinois on petitions for the modification of child support. Contact me for assistance with your petition for modification of child support at 773-616-3705 or email at firstname.lastname@example.org.