Tag Archive for: support

Health Insurance in Divorce

One frequent question in the context of divorce is what will happen to health insurance coverage. Generally, a spouse should not drop the other spouse while a divorce is pending. Health insurance is often addressed in the context of support and spouses are obligated to provide support for each other during the marriage. A support order can mandate a spouse to continue to provide health insurance. The obligation to carry health insurance for the other spouse ends at the entry of the final divorce decree. If you are unable to obtain alternate health insurance on your own right away you can look into COBRA coverage but this can be very expensive. More affordable options may be available on the healthcare marketplace.

If there are children between the parties, the children may remain under the health insurance coverage presently provided. There may be an adjustment to any child support award based on who is paying the premiums on the health insurance for the children. Child support will end when the child is eighteen or graduates high school, whichever is later. After court-ordered child support ends there is no longer a requirement for the parents to share the cost of the child’s health insurance however a parent may elect to continue to provide coverage for the child up until the maximum age of 26. Parties with private agreements can contract to continue to share this cost.

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Receipt of an Inheritance

The receipt of an inheritance may impact your divorce or support case. Section 3501 of the Pennsylvania Divorce Code defines what will be considered marital property, and up for division, versus what will be considered non-marital property. Marital property includes all property acquired by either party from the date of marriage through the date of separation. There is a presumption all property acquired during the marriage is marital regardless of how title is held (e.g. individually vs. jointly). However, property received as a gift, bequest, devise or descent is non-marital per 23 Pa. C.S. 3501(a). Accordingly, an inheritance that is received during the marriage can still be claimed as non-marital property. As a practical tip, parties should avoid commingling inheritance funds with other marital funds. Inheritance funds may still need to be disclosed since the separate assets of the party are a factor for equitable distribution under 23 Pa. C.S. 3502.

Money received by way of an inheritance should not to be considered income for a support matter. This was established in the case of Humphreys v. DeRoss, 790 A.2d 281 (Pa. 2002) wherein the court noted that the term “inheritance” was not expressly listed in the statutory definition of “income” under 23 Pa. C.S. 4302 and so was not intended to be included. However, Humphreys also established that receipt of an inheritance may still be a factor under Pennsylvania Rule of Civil Procedure 1910.16-5. Rule 1910.16-5 states factors for the court to consider for deviation from a guideline support obligation. One of the factors the court may consider is the assets and liabilities of the parties. In E.R.L. v. C.K.L., 2015 PA Super 220, the court upheld an upward deviation of a child support award where father had just received a $600,000 inheritance. The base support award was appropriately calculated in that case without the inclusion of the inheritance money.

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Allocation of Support

Allocation is the identification of separate portions of a support award where a party receives both child support and some form of spousal support simultaneously. Child support and alimony payments have different tax consequences. Child support is not tax deductible by the payor or taxed as income to the payee. The exact opposite is true of alimony. Alimony can be claimed as a tax deduction for the payor and must be claimed as income by the payee. Parties can reach a mutual agreement to allocate a support award however they see fit. Where support is calculated pursuant to the guidelines, the Order will spell out what portion of the support award is child support versus what portion of the support award is alimony.

Child support is payable to the custodial parent until the child is 18 or graduates high school, whichever is later. Child support is subject to modification based on a change in circumstances such as different income for the parents, different expenses for the child or a different custody schedule. Alimony is support paid to an ex-spouse following the divorce decree. The amount of alimony is largely based on the incomes of the parties but may also be affected by the distribution of the other assets, if any. Unless otherwise stated by agreement, alimony may be subsequently modified due the changed circumstances of either party. The changes must be substantial and of a continuing nature. As previously alluded to, an alimony provision within an agreement between the parties may not be modified in the absence of a specific provision allowing such a modification within the agreement.

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Deciphering Military Pay

Service members can receive compensation in a number of different categories. First, every service member will receive basic pay. This is their compensation for being enlisted as a service member. Certain service members will receive allowances in addition to their basic pay. BAH is the allowance for housing. This figure varies depending on the geographic area where the service member is due to differences in cost of living throughout the country. BAH should be added to the basic pay when determining income available for support. If a member is not receiving a housing allowance this may because they reside on base for free. In that scenario, the value of the benefit they are receiving in living for free should be imputed to them and tacked onto their income available for support.

BAS is an allowance to assist service members with food costs. The BAS is another allowance to include as income for support. Service members can receive additional pay for special skill sets or hazardous duty. Examples include flight pay, jump pay or service in particularly dangerous locations. This type of compensation should also be included when calculating income available for support. All of this information can be found on a service member’s leave and earnings statement (LES). It is important to obtain and review the LES in preparation for support proceedings. Many service members have access to their statements online or can request them via phone.

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Spousal Support

Section 4321 of the Domestic Relations laws provides that married persons are liable for the support of each other according to their respective abilities to provide support as provided by law. Similar to child support, spousal support will be calculated based on a statewide guideline. Without children, spousal support is 40% of the difference of the net incomes of the parties. If there is also a child support order, spousal support will only be 30% of the difference of the net incomes. There is a defense to the duty to pay spousal support where the spouse seeking support has engaged in conduct that would constitute grounds for a fault-based divorce. The fault grounds under the Pennsylvania Divorce Code include: (1) willful and malicious desertion without reasonable cause for at least one year; (2) adultery; (3) cruel and barbarous treatment of an injured and innocent spouse; (4) bigamy; (5) imprisonment for at least two years after conviction of a crime; and (6) indignities to the innocent and injured spouse which makes that spouse’s condition intolerable and life burdensome.

It is up to the spouse who is objecting to a spousal support award to prove a fault ground for divorce by clear and convincing evidence. Many cases have touched on the issue of whether spousal support is appropriate if the other party had another relationship outside of the marriage. In this scenario the spouse objecting could raise a defense by seeking to prove adultery or indignities. Adultery is defined as voluntary sexual intercourse with a person other than his/her spouse. “Indignities may consist of vulgarity, unmerited reproach, habitual contumely, studied neglect, intentional incivility, manifest disdain, abusive language, malignant ridicule, and every other plain manifestation of settled hate and estrangement.” A single act by a spouse will not support a finding of indignities. Instead, it must be a course of conduct that renders the life of the innocent party intolerable or burdensome. A party objecting to spousal support should be aware that conduct which takes place after separation is generally not relevant. It should only be introduced if you can show the conduct began before separation. Parties should be careful of the timing of new relationships if seeking spousal support.

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Filing for Support

The first step in seeking support is to file a complaint with the Domestic Relations office. You can go to the office located in your county for assistance in filing. Through the child support program website you are now able to start a request for support online. Once a complaint is submitted, an initial support conference is scheduled for approximately four weeks later. Any support will be retroactive to the filing date so parties requesting support are not prejudiced during this time frame.

Both parties are directed to bring proof of income to their initial conference. This includes recent pay stubs and last filed tax return and W-2. Proof of certain expenses is requested as well. Relevant expenses may include health insurance premiums, mortgage payments, child care costs, and private school tuition. Parties who are unable to appear in person may request to appear by phone provided all the requested income and expense information is supplied in advance of the conference. The conference officer will use the information provided to do a calculation pursuant to the Pennsylvania guidelines. Parties can accept the calculation and enter a final order at the conference. Alternatively, parties can request a hearing if there are unresolved issues following the conference.

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Additions to Support Award

Pennsylvania utilizes support guidelines to determine the appropriate amount of basic support in each case. The Rules of Civil Procedure also contemplate other expenses that can be added to a support calculation. Child care expenses as needed to allow for employment can be added to the support award. The total amount of child care expenses should be adjusted to reflect the federal child care tax credit if applicable. Health insurance premiums that provide coverage for children and/or the other party can be allocated between the parties’ in proportion to their income. This is only applicable where a party is paying a portion of the premium as opposed to a scenario where the employer covers the full cost or a third party is providing the coverage.

Private school tuition can be added to a support order. Generally, parties should agree on private school costs prior to seeking to have them included in their support order. If a child always attended private school prior to parties separating, they will likely be permitted to continue in private school. If a child has not previously attended private school, whether or not they should now be permitted to is more of a legal custody question that should be dealt with in custody court prior to any inclusion in a support order. Summer camp pay also be added to the support award. These additional expenses are allocated between the parties in proportion to their income. Parties with comparable incomes would each pay roughly 50% of these added costs. Alternatively, in a scenario where there is a significant disparity income, the party earning more will pay a greater share of these added costs.

Click here to read more about calculating child support.

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Changes to Income

Once a support order is established each party is under a continuing obligation to notify the court of any changes income, employer or employment status. Changes income may impact the support order under the guidelines as the amount of support varies based on the income bracket the parties fall into. A reduction income does not necessarily mean the support order will change. The court can consider the reason behind the reduction income. A voluntary reduction income should have no effect on the support order. Voluntary reductions income are defined as a party taking a lower paying job, quitting or leaving a job, changing occupations or returning to school or being fired for cause. The purpose behind this provision is to make sure parties cannot benefit from attempts to escape or lower their support obligation.

A non-voluntary reduction in support may result in a change to the support award. Non-voluntary reduction income may result from a lay-off, illness, termination or job elimination. These are circumstances which the party has no control over. Even a party who faces a non-voluntary reduction income should take steps to resume employment as soon as possible. Prolonged failure to obtain employment can result in an earning capacity being imputed. Earning capacity is determined based on a party’s age, education, training, and prior work experience and earnings. For a party with limited or no prior work experience, an appropriate earning capacity may be minimum wage full time. For parties who have the skill set and education for a certain type of career, example nurse or IT specialist, the average income of someone in that career in the same geographic region as reflected by the Bureau of Labor Statistics can be useful in determining an appropriate earning capacity.

Click here to read more about support.

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Income for Support

Each party’s monthly income is evaluated for the purposes of determining an appropriate support order. Pennsylvania Rules of Civil Procedure dictate that each party’s monthly gross income based on at least a six-month window should be ascertained first. For purposes of support gross income includes all wages or salary, bonuses, commissions, business income, rental property income, pension or retirement payments, royalties and dividends, and income from an estate or trust, social security disability and retirement benefits, disability benefits, workers’ compensation, unemployment compensation and alimony. It also includes any other entitlement to money or lump sum awards such as lottery winnings, tax refunds, insurance compensation, settlements, awards or verdicts.

For income that is not received on a regular basis, it may be appropriate to average out the income over the course of a year. This may be applicable in the context of a bonus or other one time payment. Each party has an obligation to report any changes income after the establishment of a support order. Failure to timely report changes income can result in any subsequent modification of the support award being retroactive to the time of the failure to disclose. After identifying the gross income of the parties, the Rules then allow the following deductions to arrive at net income: federal, state, and local taxes, unemployment compensation taxes and local services taxes, FICA payments, non-voluntary retirement contributions, mandatory union dues and alimony paid to the other party.

Click here to read more about support.

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Support Guidelines

Pennsylvania utilizes support guidelines to determine the appropriate amount of support in each case. The initial step is to determine the net monthly income of the parties and who will be receiving the support. There is a rebuttable presumption that the amount of support as dictated by the guidelines is correct. In order to overcome this presumption a fact finder must make a determination that application of the guidelines would be unjust or inappropriate. The guidelines are reviewed every couple of years to make sure they are still appropriate given current costs of raising children and the poverty level. The goal of using support guidelines is to ensure that similarly situated parties are treated similarly.

Pennsylvania uses an “Income Shares” approach which presumes that children of separated parents should receive the same amount of support as a child in an intact family. There are a number of studies that demonstrate what an intact family spends on their children in proportion to their income and the guidelines reflect the average expenditures for children on a monthly basis. The primary focus is on the income of the parties however expenses may be considered and deviation from the guidelines may be appropriate where there are unusual or extraordinary expenses. A support award may be adjusted if the party owing support is already at poverty level and barely able to sustain their own basic needs. The 2016 federal poverty level for one person is income of only $990 per month. Outside of falling below the poverty level, it is unlikely a deviation from the guidelines would be warranted due to expenses.

Click here to read more about the support guidelines.

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