By Shannon C. Braun, Paralegal and Lance J. Nelson, Esquire–
When a husband and wife decide to get divorced, during the divorce process one spouse may owe the other spouse spousal support. In Pennsylvania, spousal support is calculated by a simple formula in accordance with the support guidelines. The formula for the calculation of spousal support is 40% of the difference between the parties’ net incomes without dependent children and 30% with dependent children.
Basic spousal support calculation:
Robert Jones is a high school teacher and his wife Kimberly is an executive with a pharmaceutical company. Bob and Kim have been married for twelve years and they do not have any minor children. Bob earns $6,000 net per month and Kim earns $16,000 net per month, Bob may be entitled to $4,000 per month in spousal support ($16,000 – $56,000 = $10,000 x 40% = $4,000) from Kim. If Bob and Kim had a minor child(ren), then Bob may be entitled to $3,000 (30% of $10,000 = $3,000) per month in spousal support from Kim.
Deviation due to medical insurance:
As in child support, there are additional expenses which may warrant an upward or downward deviation when calculating spousal support. One of these expenses is medical insurance premiums. Say Bob provides medical insurance for Kim with a monthly premium of $800 per month. This expense would be split proportionately between the parties’ based on their respective incomes and then added to Bob’s support award. Specifically, Kim’s net income is 73% of the total combined household income of $22,000 ($6,000 + $16,000 = $22,000; $16,000/$22,000 = 73%). Therefore, Kim’s portion of the medical insurance premium is $584 per month, which would be added into her support obligation to Bob resulting in Kim paying Bob $4,584 per month ($4,000 + $584= $4,584). If Kim provided the medical insurance Bob’s portion or $216 ($800 x 27%= $216) would be deducted from Kim’s support obligation. If the parties’ have minor children, the medical insurance deviation would be calculated under the child support calculations.
Marital mortgage deviation:
Another expense which may be considered when calculating spousal support is the mortgage on the marital residence. It is assumed that the spouse who remains occupying the marital residence during the divorce, is responsible for all of the expenses related to the residence. But the court may award a deviation in spousal support if the mortgage (including real estate taxes and homeowners insurance) exceeds 25% of the occupying spouse’s net income, including his or her spousal and child support awards. The Court may order a spouse to pay up to 50% of a portion of the mortgage which is in excess of the 25% of the occupying spouse’s net income.
Sample marital mortgage deviation calculations:
If Bob and Kim’s marital mortgage (including taxes and homeowners) is $4,000 per month and Bob is living in the marital residence, Kim can be ordered to pay up to 50% of $1,500 in addition to her basic spousal support. The $1,500 is calculated as such: Bob’s income is $6,000 + his spousal support award is $4,000, for a total of $10,000. Twenty-five (25%) percent of Bob’s income would, therefore, be $2,500. So, the mortgage of $4,000 is $1,500 ($4,000 – $2,500 = $1,500) in excess of 25% of Bob’s income. Therefore, Kim can be ordered to pay up to 50% of $1,500. A reverse mortgage deviation can be given if the spouse paying spousal support resides in the house. Whereas, if Kim was living in the house, she could get credit for up to 50% of $1,000 which is the amount remaining in excess of 25% of her net income. This is calculated as such, $16,000 net income – $4,000 spousal support = $12,000 x 25% = $3,000; $4,000 mortgage – $3,000 = $1,000.
The formula of 40% or 30% may seem simple but with many other factors which can be taken into consideration, it can become complicated. Spousal support also has entitlement issues that may need to be addressed and a family law professional can give you guidance to your options of other forms of support such as, Alimony Pendente Lite and even post-divorce support of Alimony. Bottom line is, even if you are good at math, it is always best to consult a family law professional to help you sort out your best options so that you only pay what you owe or that you get paid all of the support that you may be entitled to.
Note: Congress changed the tax law in December of 2017. Effective January 1, 2019, alimony (or spousal support) is no longer deductible on the federal taxes of the payor or includable in the income of the recipient. The formulas discussed above will likely change as a result of this change in tax law. However, to date, the Pennsylvania Supreme Court has not finalized any changes.
The members of the MacElree Harvey Family Law team possess the personal and professional skills necessary to help Delaware and Pennsylvania clients navigate the financial and emotional issues that often arise in Family Law cases.
If you have a Family Law matter and would like to schedule a consultation, please call (610) 436-0100.