MAINTENANCE & CHILD SUPPORT

MAINTENANCE

Maintenance, aka Spousal Support, aka Alimony, are synonymous terms for our purposes. It is a monetary award floated from the monied spouse to the less monied spouse during the pendency of a divorce action (known as pendente lite maintenance) and for a predetermined durational period after the divorce.

Like much else in matrimonial law and the Domestic Relations Law, there are statutory guidelines and then umpteenth factors that can be used as reasons to deviate from the statutory guidelines.

Judicial discretion is the name of the game and overarching theme.

DRL §236B(6) sets forth the Notice of Guideline Maintenance.

For a link to the Guidelines and calculation formula, look here:

https://www.nycourts.gov/LegacyPDFS/divorce/forms_instructions/NoticeGuidelineMaintenance.pdf

The income used for the calculation is the adjusted gross income (gross less FICA and NYC taxes).

Income may also be imputed to a party for various reasons, including parents who steadily and consistently give them money and subsidize their lifestyle.

The payor’s income is capped at a ceiling that increases biennially – on March 1st of every even year – commensurate with inflation. For example, the statutory cap from March 1, 2024 – March 1, 2026, is $228,000. This will increase on March 1, 2026, then again on March 1, 2028, and so on. To give you a sense of historical figures, the cap was $203,000 from March 1, 2022 – March 1, 2024; $192,000 from March 1, 2020 – March 1, 2022; and $184,000 from March 1, 2018 – March 1, 2020.

The presumptive amount payable when the maintenance payor IS NOT simultaneously paying child support is the lower of the following 2 calculations – remember to apply the above-referenced statutory cap on the payor’s income when performing the calculations:

30% of the payor’s income less 20% of the payee’s income.

40% of the combined income less the payee’s income.

The presumptive amount payable when the maintenance payor IS simultaneously paying child support is the lower of the following 2 calculations – remember to apply the above-referenced statutory cap on the payor’s income when performing the calculations:

20% of the payor’s income less 25% of the payee’s income.

40% of the combined income less the payee’s income.

The calculations yield a figure, which is the yearly figure. Divide that by 12 to get the monthly maintenance amount.

The guidelines further set forth a durational timeline for post-judgment maintenance payments in time brackets set forth below.

Maintenance is payable for:

15% – 30% the length of the marriage for a marriage up to 15 years;

30% – 40% the length of the marriage for a marriage between 15 & 20 years;

35% – 50% the length of the marriage for a marriage over 20 years.

“Length of Marriage” is defined as the date of marriage until the date of summons filing or the date the parties entered into a valid Separation Agreement or “Stop-the-Clock Agreement.”

The factors that can be applied to deviate from the Notice of Guidelines Maintenance statutory guidelines as well as the factors that are often applied to determine where along the spectrum of durational payout the maintenance would be payable are as follows:

(a) the age and health of the parties;

(b) the present or future earning capacity of the parties, including a history of limited participation in the workforce;

(d) the termination of a child support award before the termination of the maintenance award when the calculation of maintenance was based upon child support being awarded which resulted in a maintenance award lower than it would have been had child support not been awarded;

(e) the wasteful dissipation of marital property, including transfers or encumbrances made in contemplation of a matrimonial action without fair consideration;

(f) the existence and duration of a pre-marital joint household or a pre-divorce separate household;

(g) acts by one party against another that have inhibited or continue to inhibit a party’s earning capacity or ability to obtain meaningful employment. Such acts include but are not limited to acts of domestic violence as provided in section four hundred fifty-nine-a of the social services law;

(h) the availability and cost of medical insurance for the parties;

(i) the care of children or stepchildren, disabled adult children or stepchildren, elderly parents or in-laws provided during the marriage that inhibits a party’s earning capacity;

(j) the tax consequences to each party;

(k) the standard of living of the parties established during the marriage;

(l) the reduced or lost earning capacity of the payee as a result of having forgone or delayed education, training, employment or career opportunities during the marriage;

(m) the equitable distribution of marital property and the income or imputed income on the assets so distributed;

(n) the contributions and services of the payee as a spouse, parent, wage earner and homemaker and to the career or career potential of the other party; and

(o) any other factor which the court shall expressly find to be just and proper.
Factor (o) is that catch-all factor of wide judicial discretion.

The court needs to first perform the calculations pursuant to the statute. If the court then determines that such calculations yield a maintenance award that would be inappropriate or unjust given the enumerated factors (a) through (o) above and the totality of circumstances, they can adjust the maintenance award.

Notably, and of great consequence, is that the court is required to state the reasons they deviated from the statutory guideline calculation amount in a written decision on the record.

The court may deviate in any number of ways including but not limited to: setting different caps on the payor’s ceiling amount to perform the calculations on or lowering the maintenance amount if there is a substantial equitable distribution award.

Income above the statutory cap is almost always applied in high-net-worth cases. The standard of living and equities necessitate such measure.

Regardless of the court, the parties can always enter into a binding and enforceable agreement with each other setting forth their own mutually agreeable maintenance terms.

The parties have wide latitude to do as they wish.

Their simple limitation is that they cannot do anything that would counter public policy and General Obligations Law.

For example, you cannot have one party who is indigent and would be a ward on the state waive maintenance and collect government benefits instead.

There, the courts stick it to the parties and say:

“The monied spouse is supporting the less monied spouse before the government will.”

Maintenance terminates upon the payee’s remarriage. Given how many people live with romantic partners before marriage these days, it is fairly common to include terms that if the payee is residing with a romantic partner for a period – something like 60 out of 90 days is one iteration – maintenance terminates.

It is very difficult to modify a maintenance award or have it prematurely terminated, but it can be done if extreme hardship is proven.

Maintenance is not tax deductible to the payor by the IRS on federal taxes but is deductible on New York State taxes. The payee must pick up the state tax tab.

Life Insurance is commonly negotiated to back and secure the maintenance award.

The payor is asked to secure a minimum term life insurance policy with a face value that projects the future maintenance award.

This is not a hard-and-fast rule.

It is weighed and bartered as part of the global agreement.

CHILD SUPPORT

Below are some useful resources and links for your child support and maintenance analysis.

https://ww2.nycourts.gov/divorce/MaintenanceChildSupportTools.shtml

https://childsupport.ny.gov/pdfs/CSSA.pdf

https://www.nyc.gov/assets/hra/downloads/pdf/services/child_support/noncustodial_parents.pdf

https://www.nyc.gov/site/hra/help/child-support-calculator.page

Child Support in New York is governed the Child Support Standards Act, known as the CSSA and is found in two mirror statutes, Domestic Relations Law §240(1-b) and Family Court Act §413. The Domestic Relations Law (“DRL”) is used for actions in Supreme Court, while the Family Court Act (“FCA”) applies to proceedings in Family Court.

In calculating child support, the CSSA amount automatically applies to the combined income of both parents up to a set cap on combined income.

For income exceeding that amount, the court has the discretion to issue a child support award above the cap based on multiple factors, along with the overarching, catch-all judicial discretion factor.

The guiding lights are the best interest of the children and maintaining the children’s standard of living in each parent’s household.

The statutory cap increases biennially – on March 1st of every even-numbered year – commensurate with inflation. For example, the statutory cap from March 1, 2024 – March 1, 2026, is $183,000. This will increase on March 1, 2026, then again on March 1, 2028, and so on. To give you a sense of historical figures, the cap was $163,000 from March 1, 2022 – March 1, 2024; $154,000 from March 1, 2020 – March 1, 2022; and $148,00 from March 1, 2018 – March 1, 2020.

Child support comes in 2 categories:

Basic child support

(Think: food, housing, clothing, transportation);

And

Add-ons

(Think: health/medical: insurance and uncovered expenses; child care while the custodial parent is working; educational expenses; and other extraordinary expenses, such as summer camp, extracurricular activities, tutors and enrichment programs).

The number of unemancipated children dictates the percentage to apply to the CSSA calculation.

For example:

For 1 child, 17% is applied;

For 2 children, 25% is applied;

For 3 children, 29% is applied;

For 4 children, 32% is applied;

For 5 or more children, 35% or more is applied.

Let’s walk through how the calculations are done:

In our case scenario, the parties have 2 children.

The Husband is child support payor and has an adjusted gross income (“CSSA income”) of $350,000/year.

The Wife is the child support payee and has an adjusted gross income (“CSSA income”) of $275,000/year.

To calculate basic child support, you would calculate 25% on the statutory cap, which is assuming it is between March 1, 2024 and March 1, 2026, would be $183,000, with each party paying their pro rata share.

The combined parental income is $625,000.

The Husband is 56% of the pie.

The Wife is 44% of the pie.

The total combined child support obligation for the 2 children is 25% x $183,000, which is $45,750.

The Husband’s child support obligation on this amount is $45,750 x 56% = $25,620/year ($2,135/month).

The Wife’s child support obligation on this amount is $45,750 x 44% = $20,130/year ($1,677.50/month).

The Add-ons are split pro rata to income, so the Husband’s obligation towards add-on payments is 56%, and the Wife’s obligation is 44%.

The court has discretion to apply the CSSA calculation to the income above the statutory cap – $183,000 in the above scenario – if they think it is warranted.

Income above the statutory cap is almost always applied in high-net-worth cases. The standard of living and equities necessitate such a measure.

Income is defined in the same way it is for maintenance.

It’s the gross income less FICA and NYC taxes.

Income can be imputed, such as money from family, as well as work benefits and frills.

Cloaked business expenses that are personal, such as meals and entertainment, can be imputed.

Maintenance paid to any spouse, this one or a past one, as well as child support paid for other children outside the current relationship, SSI/government assistance, and unreimbursed business expenses can be deducted.

When we perform the child support calculations, we deduct maintenance that the payor is paying from his or her income and add that amount to the payee’s income.

It is not mandatory to include college expenses in an agreement, but it is nearly always included.

Most typically, the parties agree to share the cost of college (including room and board) pro rata to their incomes at the time the children are ready to start college up to a SUNY Albany cap for in-state students.

We see other variations, such as agreeing to share the cost equally or having one party pay a much larger share. Parties may also choose a different cap, such as a CUNY cap, if they want to obligate themselves on paper to a lower amount and give themselves the wiggle room to voluntarily pay more.

Conversely, many Ivy League graduates insist on agreeing to an Ivy League tuition cap congruent with the one they attended.

Scholarships and 529 proceeds may first be applied before the parties’ obligation kicks in.

The different judicial departments vary greatly with regard to granting the child support payor a credit for college room and board.

The first department doesn’t grant it (Think: Manhattan).

The second department does (Think: Brooklyn).

You see how silly it is that you can walk over a bridge on foot, and on one side, the payor gets an advantage with a room and board credit, and on the other side, the payor is denied it.

That being said, even in the first department cases, the parties can negotiate this piece between themselves. It is possible the child support payee will give the room and board credit to the payor in exchange for something else they may want.

Many things can be “bought” like this throughout the negotiations for something the other party wants.

Child support is payable in New York State until the child’s emancipation.

Emancipation occurs when the child turns 21 years old.

This is older than many other states, where child support is payable until 18 or 19 years old.

If the parties want to deviate from the Child Support Standards Act guideline amount by agreement, or if the court determines that a deviation is proper, a guideline award pursuant to the CSSA must still be calculated and stated, along with a reason why the CSSA amount is not being used.

The same applies when the parties or court deviate upward or downward from the CSSA calculated child support award.

Deviations in both directions must be accompanied by the justification and reasoning for their propriety.

Some reasons people may deviate downward from the CSSA calculations are that the payor is paying 100% of private school tuition or 100% of the medical/health related expenses.

Some reasons people may deviate upward from the CSSA calculations are that the parties are splitting Add-ons equally, even though the payor should technically pay a greater pro rata share under the CSSA guidelines or that the upward deviation is necessary to equalize the children’s standard of living in both households.

Like life itself, child support is fluid and not static, as per the DRL and FCA.

DRL §236(B)(9)(b)(2)(ii) and FCA §451(3)(b) state that child support can be modified under the following circumstances: (i) after 3 years have passed since the order was entered, last modified or adjusted; (ii) with an increase or decrease in either party’s gross income of 15% or more; and (iii) due to a substantial change in circumstances

Regarding factor (iii), think: disability; and extreme circumstances outside one’s control.

The parties can legally opt out of child support modifications based on factors (i) and (ii).

It is against public policy and General Obligations Law for the parties to opt out of modifications based on factor (iii).

Sometimes, parties agree to opt out of modifications based on factors (i) and (ii) but agree that the child support amount will increase periodically commensurate with inflation. They agree to apply these increases on their own, every 1, 2 or 3 years, as they mutually agree at the time of the agreement negotiations.

Under IRS Publication 504, child support is not deductible to the payor and taxable to the payee.

In this regard, it is what we term “expensive money” for the payor.

The calculation is performed on money that isn’t even theirs because it’s pre-tax and owed to the government.

The parent with whom the children reside more than half the nights of the year would be able to claim the children on his or her tax returns as the IRS default.

The parties can negotiate around this and agree to allow the non-custodial parent to claim the children using Form 8332.

Commonly, parties will alternate claiming the children on even/odd numbered years or each party claims a specific child when there are multiple children.