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UPDATE: There is pending legislation for major changes to the alimony statute in Massachusetts. The Alimony Reform Act of 2011 was filed on January 18, 2011 and you can learn more about the Act at MassAlimonyFormula.com or in our recent blog post highlighting the differences between the bill and the current law.
Dealing with a case that includes the potential for both child support and alimony can be quite complicated. For purposes of this discussion, I will assume that the person receiving alimony is also the custodial parent (i.e. the person receiving child support).
First let's get some definitions:
Child Support is the amount of money paid by the non-custodial parent to the custodial parent for the support of the children. Child Support is calculated using a formula called the Massachusetts Child Support Guidelines. The formula is presumptive, and Judges can only vary from the formula in specific circumstances. To view the formula and calculate Child Support click here.
Alimony, also called spousal support, is paid by the wage-earning spouse (the spouse who has traditionally earned the majority of the income during the marriage) to the non-wage-earning spouse to allow the non-wage-earning spouse to continue to live in the lifestyle to which he or she has become accustomed during the marriage assuming their is enough income to do so. There is not currently any formula enacted or endorsed by the Massachusetts Legislature or the Courts for the calculation of alimony. The amount of alimony is dependent on the consideration of all of the factors described in M.G.L. c. 208 Section 34.
Some states use formulas to calculate presumptive alimony. And notwithstanding Section 34, some Judges in Massachusetts have suggested doing the same in Massachusetts. A Joint Task Force of the Massachusetts Bar Association and the Boston Bar Association has prepared a draft report which also suggests a formula to calculate the maximum alimony award possible. Although the Court has no obligation to follow these formulas they can be a valuable resource in helping parties understand a reasonable potential range of spousal support orders. The Divorce Spousal Support Calculator which includes all of these formulas and can be accessed by clicking here.
What happens when a case warrants both alimony and child support?
Just as there is no formula for calculating alimony in Massachusetts, there is also no bright-line rule for breaking down how much an order should be alimony and how much should be child support when a case warrants both. The interplay of these two figures can be very complicated because the tax effect to both the payor and the recipient is very different depending on how a support order is broken down.
We have a few observations based on three possible ways of making this calculation.
Option 1: If one were to calculate child support (using The Massachusetts Child Support Guidelines) and alimony (using The Divorce Spousal Support Calculator) and simply add them together, the overall support figure would likely be too high for the payor. For example, suppose a couple where the payor/non-custodial parent, Chris Jones, earns $125,000 per year, and the recipient/custodial parent, Pat Jones, earns $25,000 per year. Assuming no health insurance cost, 1 child (and no other child support orders), and no day care costs, the child support order would be $759 per week. Assuming a 20 year marriage, the average of the first five alimony formulas is $644.60 per week. Simply adding these together results in a total support order of $1403.60 per week ($72,987.20 per year), which is 58% of Chris' gross income (resulting in Pat receiving 65% of the total family income). This would likely leave Chris with not enough funds to support Chris' household.
Option 2: Some Judges have indicated at recent conferences that they are inclined to figure out an appropriate alimony order first, and subtract child support from that figure. In our example above, the child support was greater than the alimony, so there would be no alimony order. Chris would pay only the $759 per week in child support resulting in an annual income to Chris of $85,532 (taxed as $125,000) and an annual income to Pat of $64,468 (taxed as $25,000). After taking into account taxes these incomes are relatively close together, though Chris ends up with more than 50% of the income.
Option 3: Another possibility, suggested by one Judge to the author, is to estimate alimony, and then run the child support guidelines on the post-alimony incomes. In this example, if Chris pays $644.60 per week in alimony, Chris' post-alimony income is $91,480.80 and Pat's post-alimony income is $58,519.20. The Child Support using these figures is $558 per week. The resulting income to Chris would therefore be $62,464.80 (taxed as $91,480.80) and to Pat would be $87,535.20 (taxes as $58,519.20). Although resulting in a lower figure than Option 1, this may still result in too high an order for may Judges (and payors).
These examples demonstrate the difficulty of trying to use these formulas together without reviewing some common-sense evaluation of the budgetary needs of each party. For the example case the likely fair figure is somewhere between Option 2 and Option 3. It makes sense to have some of the order be alimony in order to move some of the taxable income to the lower tax bracket. It may not be practical, though, for the total order to be as high as $1,202.60 per week.
Dealing with a case that includes the potential for both child support and alimony can be quite complicated. For purposes of this discussion, I will assume that the person receiving alimony is also the custodial parent (i.e. the person receiving child support).
First let's get some definitions:
Child Support is the amount of money paid by the non-custodial parent to the custodial parent for the support of the children. Child Support is calculated using a formula called the Massachusetts Child Support Guidelines. The formula is presumptive, and Judges can only vary from the formula in specific circumstances. To view the formula and calculate Child Support click here.
Alimony, also called spousal support, is paid by the wage-earning spouse (the spouse who has traditionally earned the majority of the income during the marriage) to the non-wage-earning spouse to allow the non-wage-earning spouse to continue to live in the lifestyle to which he or she has become accustomed during the marriage assuming their is enough income to do so. There is not currently any formula enacted or endorsed by the Massachusetts Legislature or the Courts for the calculation of alimony. The amount of alimony is dependent on the consideration of all of the factors described in M.G.L. c. 208 Section 34.
Some states use formulas to calculate presumptive alimony. And notwithstanding Section 34, some Judges in Massachusetts have suggested doing the same in Massachusetts. A Joint Task Force of the Massachusetts Bar Association and the Boston Bar Association has prepared a draft report which also suggests a formula to calculate the maximum alimony award possible. Although the Court has no obligation to follow these formulas they can be a valuable resource in helping parties understand a reasonable potential range of spousal support orders. The Divorce Spousal Support Calculator which includes all of these formulas and can be accessed by clicking here.
What happens when a case warrants both alimony and child support?
Just as there is no formula for calculating alimony in Massachusetts, there is also no bright-line rule for breaking down how much an order should be alimony and how much should be child support when a case warrants both. The interplay of these two figures can be very complicated because the tax effect to both the payor and the recipient is very different depending on how a support order is broken down.
We have a few observations based on three possible ways of making this calculation.
Option 1: If one were to calculate child support (using The Massachusetts Child Support Guidelines) and alimony (using The Divorce Spousal Support Calculator) and simply add them together, the overall support figure would likely be too high for the payor. For example, suppose a couple where the payor/non-custodial parent, Chris Jones, earns $125,000 per year, and the recipient/custodial parent, Pat Jones, earns $25,000 per year. Assuming no health insurance cost, 1 child (and no other child support orders), and no day care costs, the child support order would be $759 per week. Assuming a 20 year marriage, the average of the first five alimony formulas is $644.60 per week. Simply adding these together results in a total support order of $1403.60 per week ($72,987.20 per year), which is 58% of Chris' gross income (resulting in Pat receiving 65% of the total family income). This would likely leave Chris with not enough funds to support Chris' household.
Option 2: Some Judges have indicated at recent conferences that they are inclined to figure out an appropriate alimony order first, and subtract child support from that figure. In our example above, the child support was greater than the alimony, so there would be no alimony order. Chris would pay only the $759 per week in child support resulting in an annual income to Chris of $85,532 (taxed as $125,000) and an annual income to Pat of $64,468 (taxed as $25,000). After taking into account taxes these incomes are relatively close together, though Chris ends up with more than 50% of the income.
Option 3: Another possibility, suggested by one Judge to the author, is to estimate alimony, and then run the child support guidelines on the post-alimony incomes. In this example, if Chris pays $644.60 per week in alimony, Chris' post-alimony income is $91,480.80 and Pat's post-alimony income is $58,519.20. The Child Support using these figures is $558 per week. The resulting income to Chris would therefore be $62,464.80 (taxed as $91,480.80) and to Pat would be $87,535.20 (taxes as $58,519.20). Although resulting in a lower figure than Option 1, this may still result in too high an order for may Judges (and payors).
These examples demonstrate the difficulty of trying to use these formulas together without reviewing some common-sense evaluation of the budgetary needs of each party. For the example case the likely fair figure is somewhere between Option 2 and Option 3. It makes sense to have some of the order be alimony in order to move some of the taxable income to the lower tax bracket. It may not be practical, though, for the total order to be as high as $1,202.60 per week.
Does anyone know what to do if your alimony survives and it cannot be touched? I got alimony because I gave up high paying job to support ex through PhD program. I should not have to use alimony for child support. But when you subtract alimony, the child support is half of what i had before. Now with the new changes? It doesn't even cover extra-curricular costs in high income cases
ReplyDeleteIf you are still entitled to child support then you may be entitled to adjust child support upon the ending of alimony. The end of alimony is considered a material and significant change in circumstances and child support remains modifiable so long as the children are not emancipated. In addition, sometimes extra-curricular costs are handled separately from child support, and there is discretion within the Massachusetts guidelines on this issue.
DeleteWhat happens if the alimony amount calculated is greater than the Child support amount calculated? Can the judge in MASS order choice the alimony amount because it is greater or it does not work that way!
ReplyDeleteIn addition to the Alimony Reform Act, new Child Support Guidelines became effective in Massachusetts in August, 2013. We describe the changes here: http://kelseytrask.blogspot.com/2013/06/new-massachusetts-child-support.html . Regarding the interplay of alimony and child support, the new guidelines have to say the following: "Chapter 124 of the Acts of 2011 (An Act Reforming Alimony in the Commonwealth) amended G. L. c. 208 and now prohibits the use of gross income which the Court has already considered in making a child support order from being used again in determining an alimony order. See G. L. c. 208, § 53(c)(2). Consideration may be given by the parties to preparing alternate calculations of
Deletealimony and child support to determine the most equitable result for the child and the parties. Depending upon the circumstance, alimony may be calculated first, and in other circumstances child support will be calculated first. Judicial discretion is necessary and deviations should be considered. "