Monday, November 28, 2011

Does Reducing and Limiting Alimony Force Primary Caretakers into the Workforce?

When a child is born out of wedlock, either parent may initiate a court proceeding to establish certain rights and obligations that come with raising a child. Such rights include visitation, the ability to make significant life decisions for the child, and child support. The purpose of child support is to provide a measure of financial security for a child from a parent that might not be living with the child full-time.

When a child is born into a marriage that later dissolves, child support may be ordered, and usually is. The purpose of child support for children born into a marriage, or out of wedlock, is identical: to provide for the financial costs of raising a child.

However, when marriages dissolve, the finances of the couple might be such that a court will order alimony as well. The purpose of alimony is to provide for the financial well-being of a former spouse. The issue of alimony always has been, and will likely always be, controversial. The rationale behind it is that in a marriage, both people contribute in (ideally) complementary ways. When one spouse devotes time to furthering his or her career, it is (ideally) with the contribution of support from the other spouse. For example, if one spouse is picking up extra hours at work to get a promotion, he or she is doing so while his or her spouse is taking care of the home, or the kids. Often times, one spouse is not as able to further his or her career while their partner does. When the marriage dissolves, courts want the spouse who was not as able to further his or her career to smoothly transition into a financially independent unit, and the tool through which this is accomplished is alimony.

In Massachusetts, alimony is still officially a matter of great discretion for judges. The Alimony Reform Act of 2011 does not become effective until March 1, 2012, although many judges are issuing orders consistent with its new limits. The Act, for the first time in Massachusetts, creates a formula for calculating alimony, much like the existing child support guidelines in Massachusetts. One of the more important provisions of the Alimony Reform Act is that no income included in the calculation of child support will be then included in a calculation of alimony. The child support guidelines in Massachusetts are limited to a combined income of $250,000. Thus, unless the combined income in a marriage where there are minor children is more than $250,000, absent circumstances that would convince a judge to vary from the formulas, there will be only child support and no alimony order (provided that the lesser earning spouse is the primary caretaker of the minor child or children -- judges still have a good deal of discretion, and I would encourage you to speak to an attorney if you have any questions or concerns about your specific case).

This muddies the waters a bit from the varying justifications for child support (provide for the child) and alimony (provide for the former spouse). One justification for this is attrition. For couples earning less than $250,000 combined, there is usually not enough income to justify both child support and alimony. What the court will label as "child support" (and the IRS and Department of Revenue will treat as "child support") does assist the primary caretaker into transitioning into a financially independent unit.

However, it is not enough to provide for the economic quality of life enjoyed during the marriage. When a couple divorces, the expenses once shared (one home, one electricity bill, etc.) are now separated. Now there are two homes to pay for, and two electricity bills. Even if the combined income stays the same, the combined expenses will increase. For many individuals, receiving child support will not be enough. They will need to transition back into the workforce, or focus more time on increasing their income to meet their expenses. The "child support" will provide a measure of financial security to the recipient spouse as he or she transitions to devoting more energy towards furthering his or her career. This, unfortunately, comes at the cost (usually) of spending time at home with the children.

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