Alimony (Maintenance): I’ve heard about the Illinois maintenance guidelines. Can the judge vary from them?
For better or worse, in 2015 Illinois adopted maintenance guidelines. Our maintenance guidelines create a presumption. Some have referred to the nature of presumptions as a “starting place.” Yet that is an over-simplification. In any event, the guidelines are presumed to apply when the combined gross income per year is less than $500,000. While these guidelines are a presumption, Illinois law regarding maintenance still considers factors such as how long you were married, the differences in income and assets, the ages of the husband and wife and a variety of other factors to determine how much alimony or maintenance will be paid and how long the payments will last. In 2015, Illinois enacted maintenance guidelines and it is critical to understand how these guidelines change effective January 1, 2019.
I’ve also heard about the maintenance as a deduction being lost? Explain that a bit more?
Effective with divorce cases entered on or after January 1, 2019, maintenance is no longer be deductible. For judgments entered before then, maintenance will still be a deduction. Illinois law regarding maintenance changes once again in 2019 because the percentages of maintenance change because of the loss of deductibility by the payor and the fact that the recipient previously had to pay taxes on maintenance as received.
What is maintenance?
Maintenance (alimony) is court ordered financial support that one spouse pays to the other in the event of a divorce.
What is permanent maintenance?
The better term and one that this author introduced into the 2018 maintenance guidelines amendments is “indefinite maintenance.” Using the term “permanent maintenance” or “indefinite maintenance” simply means there is no set time for the maintenance to end. I prefer the term “indefinite” maintenance because it better describes it. Unless the parties otherwise agree, indefinite maintenance ends when either spouse dies, the spouse receiving maintenance remarries, or the spouse receiving maintenance cohabits on a “resident, continuing conjugal basis.” Unless maintenance is explicitly termed as non-modifiable within the underlying divorce settlement agreement, maintenance can be modified based on a substantial change in circumstances.
Are all spouses entitled to maintenance?
No. A maintenance award is based on the needs of one spouse and the ability of the other spouse to pay.
Can husbands be awarded maintenance?
Yes. The law is clear. The Illinois’ maintenance statute is gender-neutral. Although in most cases the spouse awarded maintenance is the wife, husbands (in growing numbers) have been awarded maintenance. And with the maintenance guidelines we are clearly seeing more husband’s being awarded maintenance where the income disparity is sufficient.
What factors does the court consider in determining whether a spouse qualifies for maintenance?
Specific factors include the duration of the marriage, the income and property of each party, age, physical and emotional problems, and the standard of living established during the marriage.
What is the most important factor in determining whether a spouse qualifies for maintenance?
Generally, the length of the marriage. Commencing in 2015 Illinois law has a formula for determining the amount of maintenance, once it is determined one is entitled to alimony. The presumptive guidelines apply only if the court finds that a maintenance award is appropriate and so long as the combined gross income was less than $500,000 and the payor has “no obligation to pay child support or maintenance or both from a prior relationship.”
How much maintenance will be awarded?
Despite the language of the guidelines, the economic lifestyle of the parties should be the cornerstone (especially in long term marriages) in determining the amount of maintenance awarded. The maintenance guidelines provide that if the court determines that maintenance is appropriate (and the other two factors do not apply — the combined gross income test and the prior relationship text — then presumptively the maintenance guidelines should be followed. Under the guidelines through to January 1, 2019 the formula is:
- Take 30% of the payer’s gross income minus 20% of the payee’s gross income.
- But the amount calculated when added to the gross income of the recipient cannot be more than 40% of the combined gross income of the parties.
But how does this change January 1, 2019?
Starting January 1, 2019, the formula changes so it is based on net income rather than gross income. The new formula is to take 1/3 of the payor’s net income and subtract a quarter of the recipient’s net income. There is a 40% cap of the combined net income.
How does child support interplay?
The January 1, 2019 law provides: “If the application of guideline maintenance results in a combined maintenance and child support obligation that exceeds 50% of the payor’s net income, the court may determine non-guideline maintenance…, non-guideline child support…, or both.”
What does this mean?
This is a 50% cap in allowing the court not to follow the presumptive guidelines: that is if the combined obligation for alimony and child support is greater than half the payor’s net income.
How long does maintenance continue?
In cases where maintenance is awarded, there are presumptive amounts for the maintenance awards if the above two tests to not apply. The issue is the length of the marriage at the time the case is commenced. Under Illinois law from January 1, 2018, the current length is presumed to be:
|Maintenance Guidelines Length of Presumed Maintenance Obligation|
|Years 1-7||Years 8-14||Years 15-20|
|Mrg Yrs||Years Mn||Mrg Yrs||Years Mn||Mrg Yrs||Years Mn|
What happens if a spouse waives maintenance at the time they are divorced?
If a spouse agrees at the time the divorce is finalized to waive maintenance, that waiver is forever binding. The spouse waiving maintenance cannot later come back into court and be awarded maintenance.
What are the income tax consequences of maintenance?
Payment of maintenance is deductible by the party paying it and reportable by the party receiving it. But, this maintenance deduction ends for divorces entered on or after January 1, 2019.
Can maintenance be modified (changed)?
Yes. The issue is whether there is a substantial change in circumstances. If so, maintenance award can be adjusted up or down, or totally terminated. In cases of termination of maintenance the issues include whether there is “resident, continuing conjugal cohabitation” [See the Gitlin Law Firm’s articles in this regard]. Thus, unless the marital settlement agreement clearly states that the maintenance agreement cannot be modified, it is modifiable on a substantial change in circumstances. See the Gitlin Law Firm’s Q&A regarding modification of maintenance.