Spousal support payments are calculated based on several factors, but it’s mostly dependant on each spouse’s income level. Throughout a divorce, couples may be worried about how they’re going to divide finances and assets, along with payments required for spousal or child support.
Before determining spousal support payments that an individual will make, it’s necessary to define his or her income.
When Spousal Support Is Required
When divorcing, a party may be required to pay spousal support. Generally, spousal maintenance is intended to help individuals at lower income levels maintain a standard of living as they transition from a more financially secure marriage to a single income.
In some cases, a prenuptial agreement may outline details about spousal support, which the court is likely to uphold if the agreement is valid. In other cases, one spouse may make far more than the other and have more financial freedom. This could make him or her obligated to pay alimony based on the assets and income obtained over the course of the marriage. Other factors that determine spousal support could include spouse age and overall health, such as the presence of physical or mental health conditions that limit a spouse’s earning capacity.
In some states, a formula is used to calculate spousal support based on income. The calculation entails subtracting a percentage of the recipient’s net income from a percentage of the other spouse’s net income. Depending on the circumstances, the court may make adjustments extending beyond the formula.
Net Income vs. Gross Income
People often pull income from several sources, including their own businesses, which may complicate calculations for spousal support. Net income is usually the basis for calculating support payments.
Generally, individuals can calculate net income by subtracting items from their gross income, such as state and federal income tax, social security, self-employment tax, 401(k) and other contributions to retirement plans, medical expenses, and child or spousal support payments from a previous marriage.
Determining the Length of Spousal Support
In addition to the payment amount, the length of the spousal support pay period will be based on a particular formula, to which the courts may also make adjustments. If a marriage lasted for a period of longer than 20 years, obligors are likely to continue paying the recipient until he or she retires. Meanwhile, the length of marriages lasting less than 20 years is likely to factor into the spousal support amount. Whether payments are permanent may also hinge on the ability of the recipient to earn an income.
Making Adjustments After a Divorce
It may be possible for the courts to adjust spousal support in the years after a divorce or sooner. This is an option if drastic changes occur to change the circumstances of either party. Normally, this change consists of a 10% increase or decrease in one party’s income or a serious health issue, in which case either party may request a change to spousal support from the court.
Knowing what to expect when determining spousal maintenance can help both parties avoid unpleasant surprises throughout the divorce process and come to an agreement that works for them and any children involved.