Dispute over order modifying child support. DECISION OF COURT OF APPEALS VACATED; DISTRICT COURT JUDGMENT REVERSED AND REMANDED.

We granted further review of a court of appeals decision in this challenge to an order modifying child support. The non-custodial parent’s net monthly income exceeds $6000, and the question is whether special circumstances can and should justify a monthly payment of less than the $1650 minimum provided for such an income in the guidelines. The district court fixed the amount at $1200. We find no justification for setting the amount below $1650 and remand for an order requiring payment of that amount plus a portion of the parent’s annual bonus.

The marriage between Mark and Rhonda Beecher was dissolved in 1991. They are the parents of four sons, Beau, Rhett, Jeremy, and Marcus, all of whom except Beau were minors at the time of the dissolution. The parties received the boys’ joint legal custody, with Mark initially awarded their primary physical care. Although not ordered to do so, Mark provided substantial monetary support to the two older boys while they attended college.

During the summer of 1995 Mark moved to California with Jeremy and Marcus to accept a job as senior vice president of a bank at a substantial increase in salary. Rhonda thereafter filed an application for modification, requesting physical custody of Jeremy and Marcus and child support. She believed the boys should stay in Iowa because the move to California would have an adverse effect on them. The application was granted and Rhonda was awarded primary custody of the boys. In calculating the amount of child support Mark was to pay, the district court found Mark had a base annual salary of $139,200 with a net monthly income of $7228. This figure included a $400 per month auto allowance and, until 1999, a $1197 per month home subsidy Mark received as employee benefits. It did not however include income Mark was to receive as a bonus at the end of the year. Rhonda’s net monthly income was computed at $906. These net monthly incomes are not challenged on appeal.

The court set support at $1200 per month, plus twenty-five percent of any net bonus Mark would receive from work. This was to continue until the older child, Jeremy, reached eighteen or graduated from high school. At that time Mark was ordered to pay $720 per month plus fifteen percent of any net bonus until Marcus reached eighteen or graduated from high school. The district court recognized Mark’s monthly child support payment was considerably lower than called for under the guidelines, but found there was justification for the deviation on grounds we discuss later. The court believed its departure from the guidelines would not create a hardship on Rhonda in view of her successful remarriage.

On Rhonda’s appeal, the court of appeals majority found there was no authority to reduce the amount below the $1650 provided in the guidelines, and ordered the support order modified to require Mark to pay that amount. It also ordered that Mark pay the percentage of bonuses specified by the district court.

The purpose of the child support guidelines is to provide for the best interests of the children by recognizing the duty of both parents to provide adequate support for their children in proportion to their respective incomes. Although the guidelines cannot accommodate all specific facts of individual cases, they will normally provide reasonable support. The amount of support provided by the guidelines is presumed to be correct. State ex rel. Dep’t of Human Servs. v. Cottrell, 513 N.W.2d 765, 768 (Iowa 1994). The guideline amount may however be adjusted upward or downward if the court finds an adjustment necessary to provide for the needs of the child and to do justice between the parties under the special circumstances of the case. Id.

II. Our support guidelines are pegged to the parent’s net monthly income and the number of children involved. The percent of income required varies for amounts up to $6000 net income per month. For a net monthly income in excess of $6000 our guidelines provide:

This guideline calls for Mark to make payments no less than a non-custodial parent with a net monthly income of $6000. For a non-custodial parent of two children (where the custodial parent’s net monthly income is $906) the guidelines call for support of $1650 ($6000 x 27.5%). In this case, the district court, exercising the discretion accorded it under the above guideline, first calculated Mark’s monthly support figure by multiplying 27.5% by his net monthly income of $7228, resulting in $1988. It then, based on the reasons to be discussed, reduced the support to $1200 per month, plus 25% of his net bonus.

As to non-custodial parents earning a net monthly income in excess of $6000, the parties dispute whether the guidelines ever permit an adjustment, even under special circumstances, below the amount specified for the $6000 income level. The court of appeals concluded the support amount cannot be so reduced, that only upward adjustments could be ordered. The court of appeals based its determination that support payments could not be adjusted downward on the quoted language in our guidelines which state that a child support order for "a non-custodial parent with a monthly net income of $6001 or more shall be no less than the dollar amount . . . for a non-custodial parent with a monthly net income of $6000." (Emphasis added.) Such a view reads too much into the quoted language. The resulting figure–$1650 per month in this case–in common with all other figures derived from the guidelines, is preliminary in the sense that it is subject to consideration for adjustment upward or downward when special circumstances warrant it. The general provision in our guidelines empowering courts to depart from the recommended child support amounts because of special circumstances reads as follows:

This provision is not at all ambiguous. It is not limited to situations in which the net monthly income of a non-custodial parent is $6000 or less. It applies to all child support orders, irrespective of the net monthly income of the non-custodial parent.

III. The district court justified its downward deviation from the guidelines on a number of grounds. One was Mark’s payment of the boys’ medical expenses. But the guidelines state "[a]ny premium cost of a health benefit plan or medical support plan which has not been considered in computing net monthly income may be considered by the court as a reason for varying from the guidelines." (Emphasis added.) Mark’s costs of providing medical insurance for the boys was used as a deduction in calculating his net income. The trial court therefore incorrectly found this expense was a special circumstance that mandated a downward adjustment from the guidelines. To do so allowed a double deduction for health insurance that is not contemplated by the guidelines. There is also nothing in the record to indicate that Mark has been required to pay for any unusual medical expenses for the boys. Risk of doing so does not justify a deviation from the guidelines.

The district court also cited the high cost of Mark’s home in California, suitable for the boys. A quick response for considering an expensive home in California is that, under the change, the boys are not being raised there. But there is more. In establishing the guidelines, we balance "the needs of children against the legitimate needs and expenses of the payor parent." State ex rel. Dep’t of Human Servs. v. Burt, 469 N.W.2d 669, 670 (Iowa 1991). Put another way, the guidelines already take into consideration the reasonable living expenses of the non-custodial parent. Id. The living expenses of the non-custodial parent ordinarily do not provide a basis for departing from the guidelines. Id.; see also In re Marriage of Nelson, 570 N.W.2d 103, 108-09 (Iowa 1997) (special circumstances did not exist for downward departure in child support payment even though net monthly income was not enough to meet total monthly expenses); State ex rel. Weber v. Denniston, 498 N.W.2d 689, 691 (Iowa 1993) (mere fact that a child support obligor’s actual living expenses makes it burdensome to pay support at guideline level is not sufficient cause for deviating from guidelines); State ex rel. Epps v. Epps, 473 N.W.2d 56, 58 (Iowa 1991) (unless special circumstances are revealed by record, obligor’s reasonable living expenses will furnish no ground for departure from presumptively correct child support guideline amount).

We do not find any special circumstances in this record justifying a downward departure from the guidelines. Mark’s move to California was for a higher paying job. His increased income inured to the benefit of his sons and results in the corresponding increase in the amounts due for their support under the guidelines. The more expensive home in California was intended to benefit the boys. Both the income and more expensive home however also inured to Mark’s own benefit. The California home and the higher living cost there are not grounds for departure from the guidelines.

The court also cited the fact that Mark must bear eighty percent of transporting the boys to California for visitation. These transportation costs though, like the expensive home and high cost of living in California, were likewise also for Mark’s personal benefit and do not justify a departure from the guidelines. Mark’s commendable support for his children’s college expenses are also not germane in determining his financial ability under the guidelines. See State ex rel. Nielsen v. Nielsen, 521 N.W.2d 735, 738 (Iowa 1994).

The district court’s final stated ground for deviation is Rhonda’s remarriage. Standing alone, remarriage does not constitute a special circumstance which otherwise warrants departure from the guidelines. In re Marriage of Gehl, 486 N.W.2d 284, 287 (Iowa 1992); see also Epps, 473 N.W.2d at 59 (enforcement of child support guidelines would not result in substantial injustice, even given father’s commitment to a second family); In re Marriage of Ladely, 469 N.W.2d 663, 665 (Iowa 1991) (fact that former husband had new family was not a special circumstance justifying deviation from guideline level of support for child of first family).

We conclude the facts Mark presents do not support a deviation from the guidelines. The district court erred in considering them as adequate for that purpose. In special circumstances the district court is empowered to fix support for one with Mark’s earnings below the amount specified for those earning $6000. But we conclude no special circumstances appear in this record which would justify doing so.

IV. We agree with the district court’s determination, affirmed by the court of appeals, that Mark should pay a percentage of any bonuses he receives as specified in the district court decree. Although we reach the result under a slightly different analysis, we agree with the court of appeals’ conclusion that Mark should be ordered to pay $1650 per month (plus twenty-five percent of any net bonus received) from May 1, 1996. The support shall decrease to $1122 per month (plus fifteen percent of any net bonus received) when Jeremy becomes eighteen years of age or graduates from high school, whichever is later. Such support shall continue until Marcus becomes eighteen years of age or graduates from high school, whichever is later. The district court’s order must be modified and the case remanded for entry of judgment accordingly.

Appeal from district court order modifying child support and alimony provisions of dissolution decree. DECISION OF COURT OF APPEALS VACATED; DISTRICT COURT JUDGMENT AFFIRMED.

The question we must answer in this appeal is whether the district court correctly modified a dissolution of marriage decree in reducing the alimony and child support obligations of respondent, John E. Rietz.

The dissolution decree was entered April 11, 1995. The decree noted that neither party was employed at the time of the dissolution. Thus, the court’s findings concerning alimony and child support were based on its view of the parties’ earning capacities and their past actual earnings. The district court set Barbara’s earning capacity at $25,000 to $50,000 per year and John’s earning capacity at $150,000 to $200,000 per year.

Based on John’s earning potential, John was ordered to pay Barbara $4000 per month in alimony for twelve years and $4000 per month in child support, $1000 for each of the four minor children.

Thereafter, Barbara filed an application asking that John be held in contempt for failure to make alimony and child support payments. On September 18, 1995, five months after the dissolution decree was entered, the district court ruled that John had failed to comply with the terms of the decree and that his failure was "willful and contemptuous." The court ordered John to serve thirty days in jail unless he purged himself of contempt by bringing the child support and alimony current. The contempt matter is not before us on this appeal.

On October 2, 1995, John filed an application for modification of the dissolution decree concerning his alimony and child support obligations, asserting that a substantial change in circumstances had occurred, since entry of the dissolution decree, based on a decrease in his income. At the time John filed his application, he was employed as a lease manager at a car dealership with an annual salary between $40,000 and $50,000.

In ruling on the application to modify, the district court on May 23, 1996, found that John’s anticipated income and earning capacity as estimated by the dissolution court had not been met one year after the decree. The modification court found that John’s present annual gross earning capacity was $55,000 and that after deductions for taxes and health insurance he could anticipate a net monthly income of approximately $3,500. The modification court thus concluded that the dissolution court’s estimate of John’s "anticipated income/earning capacity is no longer a possibility." The court found that John was unable to find a job with a high income as contemplated by the dissolution court, due to suspension of his broker’s license, and that it was "doubtful that he [would] ever again reach the income level that he attained as a stockbroker." The modification court therefore reduced John’s alimony payments to $1000 per month, effective June 15, 1996, for the next eleven years and his child support payments to $1300 per month, according to child support guidelines, effective February 1, 1996.

Barbara appealed. Upon our transfer, the court of appeals concluded that John intentionally reduced his income. The court of appeals therefore set aside the district court’s modification and reinstated the support amounts set forth in the dissolution decree. Thereafter, we granted John’s application for further review.

On further review, John asserts that the court of appeals erred in finding that he intentionally reduced his income with reckless disregard to deprive Barbara and his children of support.

In response, Barbara argues that the dissolution court anticipated John might choose not to be employed at his potential level of income in order to reduce his alimony and child support obligations. She also claims that John has no one to blame for suspension of his broker’s license but himself. Barbara thus contends that these facts, plus additional facts in the record, support a finding that John intentionally reduced his income to deprive her and the couple’s children of support.

Thus, the overall question is whether the district court erred in finding there had been a substantial change in circumstances after the April 1995 dissolution decree to warrant modifying John’s support obligations. Specifically, we must consider whether John intentionally reduced his income.

A dissolution court may modify child support and alimony provisions of a dissolution decree when there has been "a substantial change in circumstances." Iowa Code § 598.21(8) (1995). The party seeking modification must prove the change in circumstances by a preponderance of the evidence. Walters, 575 N.W.2d at 741. In Walters we discussed the following relevant principles which may be considered when ruling on a petition for modification:

Id. (quoting In re Marriage of Vetternack, 334 N.W.2d 761, 762 (Iowa 1983)). A primary factor to be considered in determining whether support obligations should be modified is whether the obligor’s reduction in income and earning capacity is the result of activity, which, although voluntary, was done with an improper intent to deprive his or her dependents of support. See id. This is because we have held that an obligor’s voluntary reduction in income or earning capacity may be a basis for refusing to modify support obligations. Id.

Upon our de novo review, we conclude that John did not intentionally reduce his income to deprive Barbara and his children of support. We therefore conclude that the district court properly held that John met his burden of showing that there was a substantial change in circumstances justifying a modification of his alimony and child support obligations under the dissolution decree.

First, we disagree with Barbara’s contention that John was largely responsible for his termination from his last brokerage firm. We recognize that John was terminated for work performance, which according to his employer was unsatisfactory. However, Barbara has presented no facts suggesting John tried to get fired to avoid future support obligations.² Nor can we fault John for pursuing his lawful remedies concerning his termination.

We also recognize that John’s inability to retain his stockbroker’s license was due to his failure to pay the $53,000 arbitration award. However, this is a substantial amount and as the modification court noted, one would question whether it would be appropriate to pay the arbitration award or to give that support to his family. Moreover, John is not employable in a brokerage firm without a broker’s license. Even if he had a valid license, John would likely have difficulty obtaining new clients given his termination from two brokerage firms and the adverse results of the arbitration.

We do not ignore the fact that John at times has failed to make all alimony and child support payments. However, John is currently employed in a well paying, seemingly stable job, albeit at substantially less than what he was earning as a stockbroker. We do not consider John’s actions surrounding his termination indicative of a reckless disregard of his support obligations. This is not a situation where the obligor has refused to pursue a previous career, cf. Ellis v. Ellis, 262 N.W.2d 265, 267-68 (Iowa 1978) (modification not allowed where obligor voluntarily retired at time when he still had substantial earning capacity), or quit a job to take a position with lower pay, cf. In re Marriage of Bales, 439 N.W.2d 228, 230 (Iowa App. 1989) (modification not allowed where obligor quit job paying $15,000 per year to take job paying $5900 per year). Rather, John has simply been unable to resume his career as a stockbroker. Additionally, Barbara always has the right to file an application to modify should John’s income increase in the future.

We therefore conclude that John did not intentionally reduce his income to avoid his alimony and child support obligations. We thus distinguish this case from others where we have held that an intentional reduction in income or earning capacity will preclude modification of support obligations. See Walters, 575 N.W.2d at 741-42 (citing cases where modification of support obligations was not appropriate based on obligor’s voluntary reduction in earning capacity).

In summary, the record shows that John realistically can no longer be employed as a stockbroker nor at the high income level he then enjoyed. The expectations of the dissolution court as to John’s earning capacity cannot be achieved. He now is employed at a seemingly stable job at a lower income level that is still substantial. The modification court set his alimony and child support obligations at a lower level based on his present actual income. We thus conclude that John met his burden of proving that a substantial and material change of circumstances had occurred after the entry of the dissolution decree.

Neither party otherwise challenges the alimony amount nor the child support amount ordered by the modification court.

We conclude that the district court properly modified John’s alimony and child support obligations based on his current income. We vacate the decision of the court of appeals and affirm the district court’s order modifying respondent’s alimony and child support obligations in all respects.

Father appeals from district court’s determination of the amount to be withheld from his workers’ compensation settlement for application to his child support obligation. AFFIRMED.

Lex Bradford Parr appeals from the district court’s determination of the amount to be withheld from his workers’ compensation settlement for application to his child support obligation. The issue is what amount of his settlement is exempt from garnishment pursuant to Iowa Code section 627.13 (1997). Although we conclude fifty percent of the settlement was subject to garnishment, we affirm the district court’s award of a lesser amount. We do so because the Child Support Recovery Unit (CSRU) which sought to enforce the child support order did not appeal.

Laura Carr and Lex Parr are the parents of Brad Lee Parr, born October 1, 1976; Sherry Mae Carr, born July 4, 1980; Stacy Rae Lynn Parr, born September 26, 1984; and Brandy Nicole Parr, born December 22, 1985. The district court ordered Lex to pay $20 per week child support, commencing January 28, 1977, for Brad Lee’s support.

In a different proceeding, the district court ordered Lex to pay $10 per week child support for all four children. The court ordered the support to begin on June 5, 1980. Laura assigned child support due her from Lex to the State for public assistance she received.

On July 26, 1996, the CSRU filed an order for mandatory income withholding requiring Lex’s employer or other income provider to deduct from his income $30 per week for current child support. The order required the employer to deduct an additional amount of $23,206 as a lump sum payment of delinquent child support due and owing as of July 25, 1996. The CSRU had the order served on Monfort, Inc., Lex’s employer.

This prompted Lex to file in the district court a "Motion to Determine Child Support Due and Amount of Child Support Lien." Following a hearing, the district court ordered that $3487.67 of the $7500 settlement be delivered to the CSRU and the balance of $4012.33 be delivered to Lex and his attorney for payment of attorney fees, costs, and repayment of a Title XIX claim. In effect, the court deducted attorney fees, costs, and the Title XIX claim from the $7500 settlement to arrive at the amount available for the child support delinquency.

Although the CSRU did not appeal from the court’s order, it too contends the district court did not correctly determine how the award should be divided. According to the CSRU, one-half of the award should have gone toward child support and the balance to Lex.

Our determination of which party is correct turns on our interpretation of state and federal provisions on garnishment limitations. Ordinarily, we review actions that concern support orders de novo. See In re Marriage of Griffin, 525 N.W.2d 852, 853 (Iowa 1994). However, this appeal involves undisputed facts and statutory interpretation. Our review is therefore for correction of errors at law. See In re Marriage of DeNuys, 543 N.W.2d 894, 896 (Iowa 1996).

Thus, under section 627.13, workers’ compensation benefits are exempt from garnishment, execution, and assignment of income. Child support, however, is one exception. Although workers’ compensation benefits are subject to garnishment for child support, federal law, more specifically, 15 U.S.C. § 1673(b), imposes a limitation on such benefits subject to garnishment.

The parties agree that the lump sum income withholding here was an allowable means of collecting delinquent child support from Lex. See Iowa Code § 252D.18C (authorizing the CSRU to "enter an ex parte order for income withholding when the obligor is paid by a lump sum income source" but limiting what can be collected to the amounts specified in 15 U.S.C. § 1673(b)). The only dispute is the amount that can be withheld.

Under this construction of section 627.13, the attorney fees, costs, and Title XIX claim would not be deducted from the lump sum settlement before applying the Act’s fifty percent limitation on garnishment. Thus, the district court should have applied the fifty percent limitation to the $7500 lump sum settlement. This would have resulted in fifty percent of the settlement being available for delinquent child support under the withholding order. The remaining fifty percent would not been have been subject to the order.

Our construction of section 627.13 is faithful to the principle that the "legislature places the highest priority on a child’s right to receive parental support." In re Marriage of McMorrrow, 342 N.W.2d 73, 76 (Iowa 1982). Though we agree with the CSRU’s position on what amount of the lump sum settlement was subject to the order, we must nevertheless affirm the district court’s contrary determination. This is because the CSRU did not appeal from the district court’s order. Accordingly, we affirm.