Lee A. Bjorndal, Baudler, Baudler, Maus & Blahnik, 108 North Main Street, Austin, MN 55912 (for respondent)

Considered and decided by Randall, Presiding Judge, Klaphake, Judge, and Willis, Judge.

Appellant Martie Carlsgaard appeals from a judgment ordering the payment of reserved child support, which had been temporarily suspended during the pendency of appellant's workers' compensation action. Because the district court failed to calculate appellant's monthly income and apply the child support guidelines, we reverse and remand.

On April 5, 1996, the court reduced appellant's child support obligation to $89.54 per month, retroactive to March 1. In October 1996, after appellant's sick pay benefits had ended, the court suspended the support obligation entirely. In both of these orders, the court noted that the suspension was temporary and that appellant remained liable to pay back support "for any period during which workers' compensation benefits are received and appear to be attributable to the period from March 1, 1996 and ongoing."

In January 1997, appellant was offered a job with this employer that was consistent with his physical limitations and that paid more than his former position. Consistent with the statutory guidelines, his support obligation was set at $428 per month by an administrative law judge. The question of back support for the period of March through December 1996 was reserved, pending the outcome of the workers' compensation action.

On March 17, 1997, appellant settled his workers' compensation claim for a lump sum payment of $22,500, with one-third allocated to permanent partial disability, one-third representing temporary total disability during the period of wage loss, and one-third representing any future damages, except future medical expenses. The stipulation allocated $4,700 to attorney's fees.

Respondent Paula Engebretson then moved for payment of support not received from March 1 through December 31, 1996, in the amount of $3,270.52, representing the difference between what had been paid and the original support order of $367 per month. The district court accepted respondent's figures and made no findings on appellant's monthly income or resources available to him during that period. Judgment was entered for that amount, and this appeal followed.

On remand, the district court must calculate appellant's net income in accordance with Minn. Stat. § 518.551, subd. 5. "Income" for purposes of setting child support is defined as "any form of periodic payment * * * including, but not limited to * * * workers' compensation * * * payments." Minn. Stat. § 518.54, subd. 6 (1996). Thus, that portion of a workers' compensation settlement which is reasonably related to income may be considered when determining child support.[1] See Sherburne County Soc. Servs. v. Riedle, 481 N.W.2d 111, 112 (Minn. App. 1992) (given broad definition of income, payments from structured settlement can be considered income for support purposes).

In this case, one-third of the workers' compensation settlement was specifically identified as compensation for past wage loss. This, together with sick pay benefits received, is an appropriate starting point for determining appellant's gross monthly income. His net income then should be calculated by deducting a prorated portion of the attorney fees and any other costs which might be associated with producing the settlement, as well as any other deductions included under Minn. Stat. § 518.551, subd. 5(b). Once the court calculates appellant's net monthly income, it can apply the child support guidelines to determine the amount of support. Any deviation from the guidelines must be supported by findings specifically addressing the factors of Minn. Stat. § 518.551, subd. 5(c), (i).

Reversed and remanded.

[1] Appellant argues that the settlement should be amortized over the minority of the child, citing Lenz v. Wergin, 408 N.W.2d 873, 877 (Minn. App. 1987). We disagree. In Lenz, this court directed that on remand, the obligor's permanent disability lump-sum payment should be allocated over the period of minority following the date of injury. Id. However, this case differs significantly from Lenz because this settlement includes a specific allocation to past wage loss.