TEMPORARY SPOUSAL SUPPORT AWARD
How Are Temporary Support Awards for a Spouse Determined?
The temporary maintenance guideline formula is complicated, and you may want to use an internet on-line calculator available at: http://www.nycourts.gov/divorce/calculator.pdf
Effective October 13, 2010, New York has a new formula for determining the amount of temporary spousal maintenance to be paid. Temporary maintenance is support paid by the higher income spouse to the lower income spouse during the time that a divorce case is pending. The new law does not apply to "spousal support" ordered by the Family Court under FCA §412, which is to be "a fair and reasonable sum ... having due regard to the circumstances of the respective parties"; however the Family Court is likely to turn to the divorce court guidelines in setting their pre-divorce support orders. Temporary maintenance terminates upon the issuance of a final award of maintenance. Family Court orders terminate when the divorce court makes an order. Also, the new law provides for a presumption that counsel fees should be awarded to the "less monied spouse" so as to enable representation at the commencement of the action.
Income available for spousal support is defined in the same way as income under child support laws. In addition to earnings reported on the most recent federal income tax form, income includes worker's compensation, disability benefits, unemployment benefits, Social Security, veteran's benefits, pension and retirement benefits, fellowships and stipends and annuity payments, as well as investment income. The court may also include income from other sources such as non-income producing assets, employment perquisites ("perks") , and goods and services furnished by friends and relatives. The court can "impute income" to someone who has reduced their income by choice, or if the court believes the spouse is not being truthful about his or her true finances.
Certain deductions from income are allowed, including other child support, alimony or maintenance actually paid, non-reimbursed business expenses, public assistance, supplemental security income, NYC or Yonkers income taxes, and FICA taxes. Also, there is an income cap of $500,000 a year of the payor's income, which will be adjusted by the CPI every two years. Special rules apply to couples with income over this amount.
The Temporary Maintenance Guideline Formula
The temporary maintenance guideline formula is complicated, and you may want to use an internet on-line calculator available at: http://www.nycourts.gov/divorce/calculator.pdf
In this example, assume one spouse's income is $50,000 and the other spouse's income is $25,000:
To calculate the presumptive guideline amount: Example:
A. Take 30% of the income of the higher income spouse: $15,000
B. Subtract 20% of the income of the lower income spouse: -$5,000 = $10,000
C. Calculate 40% of the combined income of the spouses: $30,000
D. Deduct the lower income from the 40% amount (B.): $5,000
E. The presumptive award amount is the lower of (A.) and (C.): $5,000
Is There A Provision To Protect Spouses who are Poor?
Yes. A "self-support reserve" of 135% of poverty income ($14,620 for 2010) is established for the higher income spouse. Where the guideline calculated award would reduce the spouse's income below the self support reserve, the guideline amount is the difference between actual income and the reserve. There is a rebuttable presumption that no temporary maintenance is awarded if income is below the self-support reserve.
What About Health Insurance?
When a divorce is started, an "automatic order" is issued providing that neither party shall cause the other party or the children of the marriage to be removed from any existing medical, hospital and dental insurance coverage, and each party shall maintain the existing medical, hospital and dental insurance coverage in full force and effect. Under FCA §416 (h), the Family Court can also order that a spouse enroll eligible dependents or continue existing available health insurance benefits.
Most insurance policies do not provide for continued family coverage for an ex-spouse, other than limited time "COBRA law" coverage, which is often very expensive. If you need additional time to secure other coverage, the law provides that you or your spouse can request a 30 day delay in the divorce case, to secure other insurance coverage.
Can Spouses Still Make Private Agreements?
Yes. Spouses can form their own private settlement agreements in which the amount of temporary maintenance differs from the amount that would have been set according to the guidelines. There are conditions to private arrangements, and if they are not followed then the agreement is unenforceable. Most importantly, both parties must be informed about the law and the "presumptive amount" which would be due under the law must be specifically stated.
Also, if you already have a valid Separation Agreement or Pre-marital Agreement providing for maintenance, then the new law does not apply to you. A valid agreement must be in writing and properly acknowledged (notarized using specific language).
Can The Court Vary From the Temporary Maintenance Guidelines?
Yes. The formula will apply in most cases, but the court has the discretion to vary if it finds the support established in a particular case is inappropriate or unjust, in which case it is to be adjusted according to these factors:
- the standard of living established during the marriage;
- the age and health of the parties;
- the earning capacity of the parties;
- the need of one party to incur education or training expenses;
- the wasteful dissipation of marital property;
- a transfer or encumbrance made in contemplation of the divorce, without fair compensation;
- the existence and duration of a pre-marital joint household or a pre-divorce separate household;
- acts against the other spouse that have inhibited his/her earning capacity or ability to obtain meaningful employment, including acts of domestic violence;
- the availability and cost of medical insurance;
- the care of children, step-children, disabled adult children, elderly parents or in-laws, that has inhibited earning capacity or ability to obtain meaningful employment;
- the inability of one party to obtain meaningful employment due to age or absence from the workforce;
- exceptional additional expenses for the children, including daycare, education, and medical treatment;
- tax consequences to each party (maintenance is taxable to the payee & deductible by the payor);
- marital property subject to distribution;
- reduced or lost earning capacity as a result of foregoing or delaying education training, employment, or career opportunities during the marriage;
- contributions and services of the maintenance recipient as a spouse, parent, wage earner and homemaker, and to the career or career potential of the other party; and
- any other factor the court expressly finds to be just and proper.
If support is adjusted from the guidelines amount, the court must set forth the reasons in a written order.
If a party defaults in the divorce (fails to respond to notices), and/or the court has insufficient evidence to determine income, then the award is to be based on the needs of the payee, or the standard of living of the parties prior to the divorce, whichever is greater.
POST DIVORCE SPOUSAL SUPPORT (MAINTENANCE)
The court can also award "post-divorce maintenance". This award is to be in such amount as justice requires, having regard for the standard of living established during the marriage, whether the recipient has sufficient property and income to provide for reasonable needs, and the circumstances of the case and the parties. In determining the amount and its duration, the court is to consider essentially the same "adjustment factors" as shown above. The court is also to consider these additional factors: the income and property of the parties, including property awarded in the divorce, the length of the marriage, the presence of children of the marriage in the home, and the ability of the ex-spouse to become self-supporting and the time and training necessary therefor. What About After a Divorce is Final?
Spousal Support (Maintenance)
When a spouse sues for separation or divorce (whether contested or uncontested), a judge will distribute the property accumulated during the marriage in a fair and equitable manner. As part of the process, the judge will consider any request to make an order that one spouse support the other financially during and after the separation or divorce. The parties are free to come to their own determination of a maintenance award, but if they cannot agree, the court will make the decision.
Traditionally, this support was called alimony, and in one-income families, the order was routine. Today, the decision is more complicated, as more often than not, both spouses earn an income. But a judge will still determine whether to order payment by one spouse to the other. The judge can order payments to: one spouse till they die or remarry, over a set period of time or in a lump sum.
What is compulsory financial disclosure in a divorce action?
Under New York's Domestic Relations Law, whenever there is an issue of support or maintenance, each party is required to make a complete disclosure of their financial state, which includes a "sworn statement of net worth." Net worth means the amount by which total assets, including income, exceeds total liabilities. Where parties are self-employed a forensic accountant may be necessary to audit the books and records of the businesses of the parties.
How will a judge decide whether to award maintenance?
New York's Domestic Relations Law requires a judge to award maintenance "in such amount as justice requires." In making the decision, the judge must assess:
- the standard of living of the parties established during the marriage;
- whether the party in whose favor maintenance is granted lacks sufficient property and income to provide for his or her reasonable needs; and
- whether the other party has sufficient property or income to provide for the reasonable needs of the other.
The purpose of a maintenance award is to help the receiving spouse become financially independent.
What factors is a judge required to take into account when coming to a conclusion on both the amount and duration of an award of maintenance?
- Income & property—the judge will look at the income and property of the parties, which includes marital property distributed in the judgment of divorce;
- Length of the marriage—a longer marriage can mean a greater award, particularly if the receiving spouse stayed at home and raised children;
- Age and health of both parties—if a receiving spouse is in poor health or of advanced age, the award can be affected;
- Present and future earning capacity of both parties;
- Need of one party to incur education or training expenses—a maintenance award can be limited to the time it will take the receiving spouse to obtain skills to maintain himself or herself;
- Existence and duration of a pre-marital cohabitation or a pre-divorce separate habitation—if the couple lived together before marrying, or separated prior to divorce it might impact how a judge saw the length of the marriage;
- Acts that have inhibited or continue to inhibit a party's earning capacity or ability to obtain meaningful employment—such acts can include things like physical abuse;
- Ability of the party seeking maintenance to become self-supporting and, how long training might take;
- Reduced or lost lifetime earning capacity of the party seeking maintenance as a result of having foregone or delayed education, training, employment, or career opportunities during the marriage—if one spouse didn't go to college or take advantage of other vocational opportunities in order to maintain the marriage, the judge can take into account the amount of income the spouse gave up in doing so;
- Where the children live—if children will live with the receiving spouse, and this restricts that spouse's ability to earn an income, that can be taken into account;
- Need to care for family members other than children—if taking care of other family members (e.g. disabled adult children or stepchildren, elderly parents or in-laws) has inhibited or continues to inhibit a party's earning capacity, the judge may account for that;
- Inability of one party to obtain meaningful employment due to age or absence from the workforce;
- Need to pay for exceptional additional expenses—for example, for the children, including but not limited to, schooling, day care and medical treatment;
- Tax consequences to each party—spousal maintenance is considered income under the tax code;
- Equitable distribution of marital property—depending on what each spouse received in the judge's distribution of marital property, the judge may order maintenance to account for the value of the property;
- Contributions and services of the party seeking maintenance as a spouse, parent, wage earner and homemaker, and to the career or career potential of the other party—this allows the judge to consider the nonmonetary contributions of a spouse to the marriage;
- Wasteful dissipation of marital property by either spouse—if one spouse wastefully spends away the marital estate, the judge can take this into account in whether to award an amount to the other spouse to make up for the value wasted;
- Transfer or encumbrance made in contemplation of a matrimonial action without fair consideration—if one spouse sells off or transfers assets just prior to the divorce, the judge will treat the sales or transfers in the same manner as he would a wasteful dissipation;
- Loss of health insurance benefits upon dissolution of the marriage—this depends on the availability and cost of medical insurance for the parties; and
- Any other factor the court expressly finds to be just and proper.
Can a judge's maintenance award be modified later?
Yes. When changed circumstances affect substantially the financial situation of either the person paying maintenance or the person receiving maintenance, that person may request a modification (or even a termination) of maintenance. Circumstances a judge may consider as part of a determination to modify the maintenance award:
- The paying party loses a job or becomes so seriously ill that he or she cannot earn an income.
- The receiving party finds work that substantially increases his or her income.
- The receiving party's financial position changes: negatively, due to circumstances related to the economy, such as a sudden rise in prices or taxes, or due to illness, that leaves them living a poor lifestyle; or positively because he or she received a substantial inheritance that gives him or her a much better lifestyle or begins a new relationship that reduces the receiving spouse's financial need.
- The paying party's financial circumstances change due to a good faith retirement.
- The person seeking a change in maintenance bears the burden of proving changed circumstances that affect the financial situation.
If my former spouse and I established a maintenance award as part of a stipulation of settlement, can the award be modified?
If the settlement has been incorporated into the divorce judgment, the award contained in the judgment will not be modified absent a showing of extreme hardship on either party.
What happens if the person receiving post-divorce maintenance remarries or dies?
The judge must terminate the award.
What if my former spouse refuses to pay the required maintenance?
New York provides remedies for a refusal to pay maintenance. A person who is owed back maintenance can commence contempt proceedings against the non-paying spouse to ensure maintenance orders are enforced.
Can I enforce a maintenance order after my former spouse has moved from New York State?
Yes, under the Uniform Interstate Family Support Act, you may seek enforcement of a maintenance award even if your former spouse has left New York.