How Is Alimony Calculated?
The way alimony is calculated will vary from state to state and, depending on your location, alimony may be completely up to the judge’s discretion. Generally speaking, however, there are a few factors that are commonly considered when determining who is going to pay alimony, how much alimony will be paid, and how long the alimony payments will last. Judges will likely consider whether or not one party needs alimony in order to maintain the marital standard of living; while the standard of living will almost always decrease after divorce, many judges may be more likely to order alimony if there will be a substantial decrease in marital standard of living for one party, provided that the other party can pay. Spousal support may also be awarded if the other party will be forced to rely on government assistance while the other party has the ability to pay alimony. They will alt both the needs of the recipient and the ability to pay of the payor. Judges will also consider the earning potential of both parties, the length of the marriage, and other circumstances before making a decision pertaining to alimony.
Calculating Earning Potential
Divorce is not the time to reduce your income, especially voluntarily. Income is imputed when calculating alimony and/or child support. This means that your alimony and/or child-support obligation will be determined by what someone with your experience and education could be making in the present economy. If you have a job where the income varies, your income will likely be calculated by looking at what you’ve earned in the past. However, freelance work can be unreliable, especially when it comes to jobs like DoorDash, UberEATS, Lyft, etc. If your freelancing results in a very unpredictable income, it may be in your best interests to switch to a job with a more steady income as this will help mitigate stress post-divorce. It may be a good idea to consult your attorney about switching from freelancing to full-time work before you make any large decisions as this could impact your divorce, assuming alimony is a concern. If you are receiving alimony, and your income is unpredictable and, therefore, your need is greater some months than others, it may also be a good idea to consider switching to a career with a steadier income.
Second Jobs and Side-Hustles
In some cases, where full-time work is difficult to find, it may be necessary to get a second job or a “side hustle”. If you do this after the divorce has been finalized, you may not have to pay alimony on the income you receive from your second job, especially if your second job causes you to work more than 40 hours per week, as some states do not factor income received from a second job if the person is working more than 40 hours per week. If you have a side-hustle—such as UberEATS—your income will likely be calculated the same way any other freelancer’s income would be calculated: by looking at what you’ve made in the past. However, if you live in a state where they do not impute income beyond the standard 40-hour work week, your second income may not factor into the alimony.
When the Circumstances Have Changed
If you earn a living through freelance, gig work, or owning your own business, you probably know that circumstances can drastically affect your situation. For example, if you own a bunch of Airbnb locations, the 2020 pandemic may have been a financial nightmare for you since nobody was travelling, and your properties were probably empty for a significant portion of time. In a case such as the aforementioned, you have to petition the court to modify your alimony order to be proportionate to your new income. If and/or when your income does go back up, your alimony obligation could also increase as a result.
Does My Ex Have to Know about My Second Income?
If you are already paying alimony, and you get a second job, you may be wondering if your spouse has to know about it. Some people have a decree that states they’re required to notify the court of a change in income. While the courts can certainly change your alimony with the addition of a second income, they may not do so, especially if the increase in income is so marginal that it will not affect your spouse’s alimony payments. More pressing concerns are whether or not your spouse needs to know about your substantial raise, promotion, or new job opportunity that comes with a significantly higher income. In those cases, it may be worth your spouse’s time and money to go back to court and get the alimony order modified—whereas your DoorDash side hustle probably won’t consistently earn enough to be worth the time and money it takes to modify the alimony order. If you do experience a large pay increase, speak with your attorney about how this could impact your alimony award.
Getting Divorced? We’re Here for You
When you’re getting divorced, Coil Law is here for you. Whether you need help negotiating alimony, custody, or any other family law matters, our firm is here for you. Contact us today to set up your initial consultation.
