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Winkler v. Winkler4/26/2005
ler raises several issues. He argues that backdrop pension benefit is not income for child support purposes. In the alternative, he argues that even if the enhanced benefits are income, the trial court erroneously exercised its discretion when it awarded Zablocki a lump-sum payment of child support. He also argues that the trial court should have imposed a trust on the portion of the backdrop benefit to be paid as child support.
At issue is the modification of an existing child support order. Whether support provisions should be modified is discretionary, but may be ordered only upon a finding of a substantial change in circumstances. Peters v. Peters, 145 Wis. 2d 490, 493, 427 N.W.2d 149 (Ct. App. 1988); WIS. STAT.§ 767.32(1)(a). "The burden of showing that there has been a change in circumstances sufficient to justify a modification falls to the party seeking modification." Rottscheit v. Dumler, 2003 WI 62, , 262 Wis. 2d 292, 664 N.W.2d 525.
Once a substantial change in circumstances has been shown, the trial court must exercise its discretion as to modification of child support. See Sellers v. Sellers, 201 Wis. 2d 578, 585, 549 N.W.2d 481 (Ct. App. 1996). WISCONSIN STAT.§ 767.25 and WIS. ADMIN. CODE§ DWD 40 provide the framework for setting and modifying child support. The statute authorizes the Department of Workforce Development to establish income percentage standards from which to set child support. See§ 767.25(1j). Essentially, a fixed percentage is applied to the gross income of the parent paying support; the percentage varies based on the number of children and the time the paying parent spends with the children. See § DWD 40.03. The applicable percentage here, for one child, is seventeen percent.
There has been no serious dispute that Winkler's financial circumstances changed substantially when he chose to accept the backdrop benefit. Thus, the issue is whether the trial court erroneously exercised its discretion when it modified the child support order to require Winkler to pay a portion of his backdrop payment as a lump sum.
A. Whether the Backdrop Payment is "Income"
The percentage standards are specifically required to be applied to gross income, which is defined by WIS. ADMIN. CODE§ DWD 40.02(13). Section DWD 40.02(13) provides in relevant part:
(a) "Gross income" means all of the following:
1. Salary and wages.
2. Interest and investment income.
3. Social Security disability and old-age insurance benefits under 42 USC 401 to 433.
4. Net proceeds resulting from worker 's compensation or other personal injury awards intended to replace income.
5. Unemployment insurance.
6. Income continuation benefits.
7. Voluntary deferred compensation , employee contributions to any employee benefit plan or profit-sharing, and voluntary employee contributions to any pension or retirement account whether or not the account provides for tax deferral or avoidance.
8. Military allowances and veterans benefits.
9. Undistributed income of a corporation, including a closely-held corporation, or any partnership, including a limited or limited liability partnership....
....
10. All other income, whether taxable or not, except that gross income does not include any of the following:
a. Child support.
b. Foster care payments under s. 48.62, Stats.
c. Kinship care payments under s. 48.57(3m) or (3n), Stats.
d. Public assistance benefits under ch. 49, Stats., except that child care subsidy payments under s. 49.155, Stats., shal
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