Effective January 23, 2016 a new maintenance law will take effect. Maintenance, sometimes called alimony or spousal support, may be awarded to one of the parties during a divorce to financially assist that party for a specific period of time. Couples can agree on what amount of maintenance, if any, is proper. Where couples cannot agree, prior to January 23, 2016, the court was required to use a list of criteria to determine the length and amount of maintenance.
The new statute creates an income cap of $175,000 for the person providing the maintenance (the “payor”). This cap will increase every other January 31 beginning in 2016 based on the Consumer Price Index for urban consumers. This new cap is a change from the current (2010) law that sets the cap at $543,000, and may result in significantly lower court-ordered maintenance payments for those “payors” with incomes over $175,000.
The new legislation has two formulas that are used to calculate the amount of maintenance—one where the “payor” is the non-custodial parent and another where there is no child support or when the “payor” is the custodial parent.
The new law also requires using the maintenance calculated to the income of each parent (either by adding the amount received or deducting the amount paid) when calculating child support. There is no formula to calculate maintenance for income over $175,000. Rather, the court shall determine any additional maintenance based on a consideration of a list of statutory factors.
The new legislation also has a formula to help determine the duration of maintenance. For marriages that have lasted 15 years or less, the duration will be 15% to 30% of the length of the marriage. For marriages that have lasted for more than 15 years but less than 20, the duration is 30% to 40% of the marriage. Finally, for those couples married longer than 20 years, the duration is 35% to 50% of the length of the marriage.
As in the past, maintenance is a tax deduction to the “payor” and is income to the “payee”.
We always inform our clients of statutory maintenance and child support calculations. They are often used as a starting point for discussion. One of the significant benefits of mediation, of course, is that the parties can agree to deviate from these calculations to fit their needs and the needs of their children.