MSSC Clarifies the Relationship Between Alimony and Social Security Benefits
June 8, 2020 § Leave a comment
Before 2018, the rule in Mississippi was that an alimony payor was entitled to a dollar-for dollar credit against an alimony obligation for derivative Social Security (SS) retirement benefits received by the payee ex-spouse. Spalding v. Spalding, 691 So.2d 435 (Miss. 1997).
Note: Derivative benefits are those derived from the payor’s SS entitlement, as where the payee elects to base benefits on the spouse’s earning record instead of his or her own, so as to receive a greater benefit.
That changed with the case of Harris v. Harris, 241 So.3d 622, 628 (Miss. 2018), which overruled Spalding and held that derivative SS benefits do not trigger an automatic modification of alimony, but that the trial court must “weigh all the circumstances of both parties and find that an unforeseen change in circumstances occurred to modify alimony.”
Then, in Alford v. Alford, decided July 23, 2019, the COA reversed and remanded a chancellor’s award of alimony because it did not take into account Linda Alford’s inevitable receipt of derivative SS benefits in its initial determination of alimony. The COA remanded the case to the trial court, but Linda filed a petition for certiorari with the MSSC.
The MSSC granted cert., and in Alford v. Alford, decided June 4, 2020, the court reversed the COA in part. At ¶2, the court’s opinion states:
“We granted certiorari because this Court has not answered whether a chancellor should consider Social Security benefits when considering initial alimony awards. We find that consideration of derivative Social Security benefits should be reserved for alimony modification proceedings.”
Justice Kitchens wrote for the unanimous court:
¶14. The Court of Appeals held that the chancellor should have considered Linda Alford’s near-future reception of derivative Social Security benefits when it made her initial alimony award because “Harris specifically holds that derivative Social Security benefits will not justify a subsequent modification of alimony if the benefits were anticipated or foreseeable at the time of the divorce.” Alford, 2019 WL 3297142, at *6 (citing Harris, 241 So. 3d at 628-29).
¶15. Linda Alford argues that the Court of Appeals erred in its interpretation of Harris. According to her, Harris concerned “whether the other financial circumstances of the parties had materially changed so as to warrant a modification of alimony, when coupled with the advent of Social Security benefits” and did not concern whether derivative Social Security benefits were foreseeable. This Court agrees. Harris did not hold that the future receipt of derivative Social Security benefits is a foreseeable circumstance that would not allow a subsequent modification of alimony; rather, Harris said that when an alimony recipient acquires derivative Social security benefits, the alimony payor may seek a downward modification of his or her alimony payments after the chancery court considers the totality of the parties’ circumstances, not merely the receipt of derivative Social Security benefits. Harris, 241 So. 3d at 628. We find that Harris requires the chancellor to examine the impact the reception of derivative Social Security benefits causes and not the reception alone. We find also that it is the unpredictable impact that stymies foreseeability at the time of the initial alimony award. Thus, we hold that the Court of Appeals interpreted Harris incorrectly. [My emphasis]
¶16. At the time of the Alfords’ divorce, the law regarding derivative Social Security benefits provided that the spouse paying alimony was entitled to an automatic credit toward his alimony obligation “because the amount was based on his income.” Harris, 241 So. 3d at 626 (citing Spalding, 691 So. 2d at 439). In 2018, this Court overruled Spalding “to the extent that it holds an alimony reduction to be automatic for Social Security benefits derived from the alimony-paying spouse’s income.” Id. at 624. The issue in Harris involved a modification of a property settlement agreement, and this Court held that
Social Security benefits derived from the other spouse’s income do not constitute a special circumstance triggering an automatic reduction in alimony. When a spouse receives Social Security benefits derived from the other spouse’s income, the trial court must weigh all the circumstances of both parties and find that an unforeseen material change in circumstances occurred to modify alimony. Harris, 241 So. 3d at 628.
¶17. Harris did not say that derivative Social Security benefits can never be a basis for modifying an alimony award, only that the reception of derivative Social Security benefits does not “trigger[] an automatic reduction in alimony.” Id. The Court in Harris said that when a person receives derivative Social Security benefits, there can be a later modification of alimony as long as the chancellor “weigh[s] all the circumstances of both parties and find[s] that an unforeseen material change in circumstances occurred to modify alimony.” Id. If we were to agree with the Court of Appeals that “derivative Social Security benefits will not justify a subsequent modification of alimony if the benefits were anticipated or foreseeable at the time of the divorce[,]” Alford, 2019 WL 3297142, at *6 (citing Harris, 241 So. 3d at 628-29), one would not be able to seek a modification under Harris because it is foreseeable that most Americans will receive Social Security benefits at some point in their lives.
¶18. The Court of Appeals found that it was “clearly foreseeable” that Linda Alford would receive derivative Social Security benefits “in the near future” and it was the reception of those benefits that would not justify a later modification according to Harris. Alford, 2019 WL 3297142, at *6. While it may be foreseeable that a litigant will receive Social Security benefits, the impact of the benefits on both parties cannot be anticipated or foreseen. The chancellor must consider such benefits in conjunction with “all the circumstances of both parties” in order to determine whether there is an “unforeseen material change in circumstances” that justifies modifying alimony. Harris, 241 So. 3d at 628. It also may be said that it is clearly foreseeable that a person will get older and/or a person’s health will decline; yet courts have determined that these foreseeable events sometimes can create unanticipated, unforeseeable material changes in circumstances that justify the modification of alimony. See Broome v. Broome, 75 So. 3d 1132, 1141 (Miss. Ct. App. 2011) (“The chancellor found T.C.’s standard of living dramatically decreased over the years since the divorce decree due to his poor health and advanced age.”); Makamson v. Makamson, 928 So. 2d 218, 221 (Miss. Ct. App. 2006) (“These are specific findings that the increased costs, length of time before treatment was to begin and the stroke were not anticipated in the property settlement agreement.”). Contra Weeks v. Weeks, 29 So. 3d 80, 90-91 (Miss. Ct. App. 2009) (“With the extensive testimony concerning Deborah’s medical problems and the state of her health before the judgment after remand was entered, we cannot say that the increased expenses due to the progression of these problems was in any way unforeseeable by the parties.”).
¶19. In Harris, this Court considered the South Carolina case Serowski v. Serowski in deciding whether a modification of alimony “due to the start of Social Security benefits” was automatic or “require[d] a showing of a material or substantial change in circumstances[.]” Harris, 241 So. 3d at 628 (citing Serowski v. Serowski, 672 S.E. 2d 589, 593 (S.C. Ct. App. 2009)). In Serowski, the court did not find that the spouse’s reception of Social Security benefits was a foreseeability that would not allow a modification of alimony. Serowski, 672 S.E. 2d at 593 (“[T]he court found Wife’s increase in income due to her receipt of social security and annuity benefits had improved her ability to meet her needs.”). Instead, the court upheld a modification of alimony by considering the impact the Social Security benefits had on the wife’s income in conjunction with the increase in the wife’s net worth and the husband’s decline in health. Id. at 593-94 (“[T]he court properly considered both parties’ economic circumstances in reaching its finding.” (citing Eubank v. Eubank, 555 S.E. 2d 413, 417 (S.C. Ct. App. 2001))).
¶20. Similarly, this Court determines that Harris does not hold that the mere reception of derivative Social Security benefits is a foreseeable circumstance that would preclude a subsequent modification of alimony. Harris, 241 So. 2d at 628. In Harris we reversed and remanded, not because it was foreseeable that a person would receive derivative Social Security benefits, but because the trial court had failed to perform the proper analysis and determine whether all of the circumstances, including the impact the reception of derivative Social Security benefits had on both parties, constituted an unforeseen material change in circumstances. Id. at 628-29. Merely receiving derivative Social Security benefits alone is not enough to allow a modification of alimony because there must be judicial consideration of its impact on the parties, a factor that is not foreseeable at the time of the divorce. See Ivison v. Ivison, 762 So. 2d 329, 334 (Miss. 2000) (“An award of alimony can only be modified where it is shown that there has been a material change in the circumstances of one or both of the parties.” (citing Varner v. Varner, 666 So. 2d 493, 497 (Miss. 1995))); Tingle v. Tingle, 573 So. 2d 1389, 1391 (Miss. 1990) (“This change, moreover, must also be one that could not have been anticipated by the parties at the time of the original decree.” (citing Morris v. Morris, 541 So. 2d 1040, 1043 (Miss. 1989); Trunzler v. Trunzler, 431 So. 2d 1115, 1116 (Miss. 1983))).
¶21. We clarify our holding in Harris: when an alimony payor seeks an alimony modification based on the payee’s receipt of derivative Social Security benefits, the trial court must consider whether the impact of the derivative Social Security benefits on the parties constitutes a “material or substantial change in the circumstances[,]” Tingle, 573 So. 2d at 1391 (citing Clark v. Myrick, 523 So. 2d 79, 82 (Miss. 1988); Shaeffer v. Shaeffer, 370 So. 2d 240, 242 (Miss. 1979)), that arose after the original judgment and “could not have been anticipated by the parties at the time of the original decree[,]” Morris, 541 So. 2d at 1043; Trunzler, 431 So. 2d at 1116, and whether the change in circumstances calls for an alteration of alimony under the factors governing alimony awards from Armstrong, 618 So. 2d at 1280. See Steiner v. Steiner, 788 So. 2d 771, 776 (Miss. 2001) (“The chancellor must consider what has become known as the Armstrong factors in initially determining whether to award alimony, the amount of the award, and in deciding whether to modify periodic alimony, comparing the relative positions of the parties at the time of the request for modification in relation to their positions at the time of the divorce decree.” (citing Tilley v. Tilley, 610 So. 2d 348, 353-54 (Miss. 1992))).
That foreseeability aspect has puzzled me through the years. Your unclaimed SS benefits stop accruing when you reach 70, so 99.9% of people claim their benefits before then. You can’t get much more foreseeable than that. I think the bold language in Alford, above, clarifies that it is not the claiming of benefits that is unforeseeable; rather it is the economic impact that is unforeseeable and opens the gate to modification.
I don’t generally post about a case that is subject to a motion for rehearing, but with this blog winding down and this case being important to practitioners, I decided to go ahead with it. Besides, it’s a unanimous decision, and in my opinion it’s unlikely (and unforeseeable) that rehearing would be granted.
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