Starting January 1, 2015, a new law determining spousal maintenance is in effect for divorcing couples. Maintenance is also known as alimony (particularly by the IRS) or spousal support. The new law, P.A. 98-0961, affects couples whose combined gross income is less than $250,000. The new law was put into place to fix inconsistencies in the way different courts awarded maintenance across Illinois. As this is a new law with complex mathematical computations, it is strongly advised that you consult an attorney before agreeing to any divorce settlement that includes a maintenance award.
Formula to Calculate Amount of Maintenance
How will you know how much maintenance you will need to pay or will receive? The new law has a formula that courts use for calculating spousal maintenance is based on both spouses’ gross income and the length of the marriage. The formula calculates a maintenance award that equals 30 percent of the paying spouse’s gross income minus 20 percent of the paid spouse’s gross income, not to exceed 40 percent of the parties’ combined gross income when added to the paid spouse’s gross amount. If the calculated amount of the maintenance award pushes the paid spouse’s annual gross over the 40-percent-of-combined-income limit the amount will be reduced to the 40 percent cap on her income after maintenance.
Huh, you say? Do I need to go back to school to learn this math to figure out what I should be receiving or paying in maintenance? No, you just need to consult with a knowledgeable Illinois divorce attorney.
Formula to Calculate Duration of Maintenance
How will you know how long you will need to pay or will receive maintenance? Another formula is based on the length of the marriage, which establishes the duration of the maintenance award. The duration of the award is figured out by multiplying the length of the marriage by the following multiples. For marriages lasting:
• 0 to 5 years, the multiple is .20
• 5 to 10 years, the multiple is .40
• 10 to 15 years, the multiple is .60
• 15 to 20 years, the multiple is .80
• 20 or more years, the court may either make the duration equal to the length of the marriage or make maintenance permanent.
Other Things the New Law Does
In addition, the new law:
• Prevents unallocated maintenance unless the parties agree to it
• Allows judges to permanently bar maintenance for marriages of 10 years or less
• Subtracts maintenance payments from the paying spouse’s income when calculating child support
How Does a Judge Determine Who Receives Maintenance?
Unlike child support, the judge has discretion as to whether to order spousal maintenance. Some of the factors judges use to decide whether maintenance are appropriate are:
• The duration of the marriage
• The standard of living established during the marriage
• The income and needs of each spouse
• Whether one spouse gave up higher education or career opportunities to stay home
• The time it will take that spouse to achieve sufficient education or job training to become financially self-sufficient
Once the judge decides that one divorcing spouse is entitled to maintenance, they use the formulas to calculate the amount and the duration of the maintenance award. Just like in child support cases, if the judge does not use the formulas, they will have to explain their reasons for not using them.
Since issues of spousal maintenance are both complex and have a high impact on finances, it is very important that you seek legal advice whenever they are at issue. To schedule an appointment, please call Rhonda Stuart at (708) 466-6912.