In Re the Marriage of Nelson
1997 Iowa Sup. LEXIS 258, 570 N.W.2d 103, 1997 WL 672214 (1997)
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Rule of Law:
Under the Iowa Child Support Guidelines, a parent's student loan payments are not deductible from gross income when calculating a support obligation, but payments for the children's health insurance are. Furthermore, a prior support order that deviates from the guidelines without providing a required written justification cannot serve as the baseline for determining if a substantial change of circumstances has occurred.
Facts:
- Jane M. Herbers and Scott J. Nelson, who have two children together, dissolved their marriage in September 1989 while Scott was a law student.
- The original dissolution decree set Scott's child support at $137.50 per child per month, noting that his completion of law school would constitute a substantial change in circumstances.
- In March 1993, after Jane had remarried, a court modified Scott's total child support obligation to $425 per month.
- In August 1995, Jane sought another modification, presenting evidence that Scott's annual income as a lawyer had increased to $38,524 by 1994.
- At this time, Scott was making monthly payments of $417 for his law school student loans and $181.43 for his children's health insurance.
- Jane, who had two children from her second marriage, worked part-time as a cook earning $5.20 per hour.
- Jane's new husband is a farmer, and their joint net worth had increased by approximately $70,000 since 1992, primarily from unrealized gains in farm commodities.
Procedural Posture:
- Jane M. Herbers filed a second modification action in the district court (trial court) seeking an increase in child support from Scott J. Nelson.
- The district court found a substantial change in circumstances and increased Scott's child support obligation from $425 per month to $695 per month.
- Scott J. Nelson, as appellant, appealed the district court's ruling to the Iowa Court of Appeals.
- The Court of Appeals affirmed the district court's judgment.
- The Supreme Court of Iowa granted further review of the Court of Appeals' decision.
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Issue:
Under the Iowa Child Support Guidelines, must a court deduct a parent's student loan payments from their gross income, and can a prior unexplained deviation from the guidelines serve as the baseline for determining if a substantial change of circumstances has occurred for the purpose of modification?
Opinions:
Majority - Harris, J.
No. A parent's student loan payments are not deductible from gross income for child support calculations, and a prior support order that deviated from the guidelines without providing written reasons cannot be the baseline for determining a substantial change in circumstances. The court reasoned that the Iowa Child Support Guidelines expressly prioritize the needs of children over the retirement of a parent's indebtedness, stating that debts can be refinanced but childhood cannot be postponed. In contrast, precedent allows for the deduction of health insurance premiums paid for the children from gross income. The court also held that the 1993 modification order, which deviated from the guidelines without the statutorily required written findings, was invalid as a baseline for measuring the 10% variance needed to show a substantial change of circumstances. Therefore, the court must compare the current circumstances to the last compliant order, which was the original dissolution decree. Finally, the court found it was reasonable for Jane, a mother of four, to work part-time, and using her actual earnings rather than her earning capacity did not create a substantial injustice.
Analysis:
This decision reinforces the mandatory nature of the state's child support guidelines and the strict procedural requirements for any judicial deviation. It establishes a clear precedent that an order failing to provide written justification for deviating from the guidelines is effectively nullified as a baseline for future modification actions, forcing courts to look back to the last compliant order. The opinion creates a distinct hierarchy of financial obligations, placing the needs of children above a parent's desire to repay personal debt, even professionally advantageous debt like student loans. This holding significantly impacts how trial courts must calculate income and provides strong support for custodial parents who choose to work part-time to care for their children.
