It is becoming increasingly common for people who are approaching traditional retirement age—or are already retired—to have children who are minors. As a result, the prospect of a having to consider an ongoing child support obligation when considering retirement is becoming more common.
The matter of Smedley v. Lowman , 2 A.3d 1266 (Pa.Super. 2010), addressed the matter of retirement and child support directly, and now provides guidance for the same.
In Smedley the obligor father became fully vested in his police department pension at the age of 50 and elected to retire at age 52. At the time of his retirement he had a 7-year-old child for whom he had a child support obligation. The obligor’s retirement resulted in his income being cut approximately in half.
It is undisputed law in Pennsylvania that an obligor cannot voluntarily retire in order to justify the reduction of a child support obligation. A voluntary retirement only permits an obligor to pursue a reduction in his obligation. The court found in this matter that the father did not retire in order to have his child support reduced; therefore it could consider whether his reduction in income could warrant or justify a reduction in child support.
The father appealed and asserted that his retirement income should be the only income considered for a child support obligation, as opposed to any additional income imputed on him per a finding of a higher earning capacity. He argued that his retirement should not be considered an early retirement, or a voluntary retirement, because he was fully vested when he elected to retire; indeed he was already vested for two years when he retired. As the court has found that the father did not voluntarily reduce his income, through retirement, in order to circumvent his support obligation, the court was free to consider whether the father’s support obligation could be reduced due to his decreased income as a result of his retirement.
In reviewing the facts and evidence, the court found that the father’s reduction of income—his pension was half of the amount of his income when he was employed—was voluntary. No evidence was presented that his employer pressured him to retire or his health made it difficult or impossible for him to continue to work. Indeed, the court stated more than once that he was in good health and relatively young.
The court also pointed out that its review was to discern whether the lower court’s decision was an abuse of discretion. To that end, the court observed that the earning capacity the lower court assessed the father, $35,400 per year, which is still significantly less than his prior income of $50,000 when he was fully employed, was not an abuse of discretion.
Finally, the court admonished the father by observing that the father still has a 7-year-old daughter to care for and his decision to voluntarily retire at a relatively young age and in good health does not somehow take away his obligation to ensure his daughter has adequate support as, ultimately, support orders are, after all, for the benefit and interests of children.
The court’s analysis in Smedley was later applied in the matter of Pikiewicz v. Timmers , 106 A.3d 177 (Pa. Super. Ct. 2014). Although Pikiewicz was not reported and is nonprecedential, it does provide insight into the mind of the court on this issue. In Pikiewicz the obligor, a healthy 44-year-old man, elected to voluntarily retire and collect a pension, which reduced his income by nearly $4,000 per month, purportedly to spend more time with his son. The Superior Court of Pennsylvania, upon review and looking to Smedley for guidance, found that while the obligor did not retire in order to circumvent a support order, his voluntary retirement would not warrant a reduction in his child support considering he was in good health and refused to mitigate his reduction in income by securing alternative employment. As a result, the obligor’s earning capacity was assessed at his income when he was fully employed. The court bolstered its decision by noting that the support ordered was for the support and best interests of his child and that this obligation remains despite his decision to voluntarily retire.
Smedley was later reviewed and cited by a recent case called Kutsch v. Anthony, No. 252 (WDA 2016). Granted, the Kutsch matter, too, is unreported and explicitly nonprecedential, but it does provide a glimpse as to how the Superior Court of Pennsylvania may apply Smedley into the future. In Kutsch, the obligor was also retired and, therefore, the court had to consider how that retirement would affect his support obligation. The court, in Kutsch, noted that the obligor’s retirement was due to his failing knees which made it impossible for him to continue to work as a truck driver. As a result, the court found that while his retirement may have been early (he was only 55 years old), it was certainly not voluntary. On that basis the court distinguished Smedley from Kutsch as Smedley dealt with a voluntary retirement. As a result, the court in Kutsch declined to assess an earning capacity to the obligor as it did in Smedley based on an income other than his retirement income.
As more and more people are retiring while they still have a legal obligation to pay support to a minor child, it is becoming increasingly important for practitioners to keep a close eye on how this area of the law develops.
Published in The Legal Intelligencer on March 20, 2017 and an be seen here.