Marriages in Oregon are terminated by a proceeding called a dissolution of marriage, commonly referred to as a divorce. When dissolving a marriage, the court can order two kinds of support: child support and spousal support (formerly called alimony).
When parties have a child together, but are not married, a court cannot award spousal support although child support is generally awarded.
Child support is money one parent must pay to the other parent (or directly to the child if over 18 in some circumstances) for the care, support, education and welfare of the parties’ children. In Oregon, child support is generally awarded in cases involving children younger than 18, although a support obligation may continue until the child reaches 21 if the child is a “child attending school” as defined by state statute. Child support can be established through an administrative proceeding filed by the state of Oregon, through a paternity action filed by a party, in a petition for custody action between unmarried parents, or in a dissolution of marriage proceeding (divorce). In all cases, including a divorce, child support is established by using the state’s Uniform Child Support Guidelines.
Oregon’s Uniform Child Support Guidelines contain a formula that takes into account the parties’ gross income, the parties’ parenting plan (the overnights), childcare costs, medical insurance costs and uninsured ongoing medical expenses in addition to several other factors. Oregon’s child support calculator is found online at www.oregonchildsupport.gov/calculator/pages/index.aspx
. Once the parties’ information is inputted into the worksheets, the formula determines a presumptively correct amount of child support. The presumed amount is generally followed unless specific findings are made that the amount is unjust and inappropriate based on the facts of the particular case.
Also, based on the same factors that determine child support, the Oregon guidelines may impose an additional obligation within a child support determination in the form of “cash medical support.” Cash medical support is an additional amount a parent may be ordered to pay to help with the cost of health care coverage or to help with the uninsured medical expenses of the child. When ordering child support the court will order one, or both of the parents to provide health insurance for the minor child. If private health insurance is not available, or not reasonable in cost under the child support guidelines, the court may order one of the parties to acquire publicly-funded health insurance and/or to provide private health insurance when it becomes available. A court is also likely to order a division between the parties of uninsured health care costs for minor children.
Possible factors to justify a deviation from the presumed amount are set forth in the guidelines themselves. They include such circumstances as: other resources of a parent; necessities of a parent; net income of a parent; a parent’s ability to borrow; the number and needs of other dependents; the desirability of the custodial parent to remain at home with the children; tax issues; and the financial advantage afforded a parent by living with a partner in a relationship similar to a spousal relationship. Note that judges do not commonly deviate from the presumed amount of child support.
Unlike spousal support (discussed below) child support is taxable as income to the paying parent although untaxed to the receiving parent and/or child.
In establishing the appropriate amount of child support, it is important to establish the parties’ income. To establish a party’s income, a judge will look at all earnings, income and resources of that party. This includes salaries, wages, commissions, advances, bonuses, dividends, Social Security, workers’ compensation, unemployment benefits and all other sources of income. If a party has no income, that party’s income can be based on “potential” income, or at least an income based on what that party can earn working full time at the lowest current minimum wage in Oregon. Other factors that may come into play in establishing the appropriate amount of child support are: the number of children; whether there are any non-joint children; the amount of parenting time (visitation) a party has with the child; and whether a party is paying or receiving spousal support.
Generally, the party with more overnights with the child will receive child support from the party with fewer overnights. Child support is generally payable even if the parties have joint legal custody and 50/50 shared parenting if there is a difference between the parents’ incomes. Typically, the party with the greater income will bear a greater portion of the financial burden to support children. The guidelines may find that one party’s income is only enough to support him or herself, and presume that no support should be paid, although these situations are rare.
The ordered amount of child support can be modified when there is a substantial and unanticipated change in the parties’ financial circumstances. Generally, the court will not “waive” child support, because it is for the benefit of the minor child and not for the benefit of the spouse receiving payments.
The following simplified example may be useful: Assume that the parent with less parenting time has a gross income of $3,000 per month, and the parent with more parenting time has a gross income of $1,500 per month. The combined incomes of the parties is $4,500 per month, of which two-thirds is from the parent with less parenting time. If, under the formula, the support needs of one child are $600/month, the parent with less parenting time would be required to pay two-thirds of that amount, or $400/month.
Spousal support is money that a court orders a party to pay to a former spouse to help that spouse meet his or her needs, preserve a similar lifestyle to that enjoyed during the marriage, or to allow a spouse to become self-sufficient. Spousal support is not awarded in every dissolution case and may only be ordered in dissolution of marriage cases (not in paternity or unmarried custody cases).
An award of spousal support is not based on a formula as is the case with child support; rather, it is based upon what is “just and equitable under the circumstances.” The amount and duration of spousal support is based on a variety of factors. Those factors include: length of the marriage (generally not awarded in short-term marriages); ages of the parties; health of the parties; work experience and earning capacity (probably the most important factor). A court will also look at the standard of living the couple had during the marriage, how the couple deals with property division in the marriage, the parenting plan regarding children, how responsibility for debt is allocated, costs of health care, etc.
The Tax Cuts & Jobs Act of 2017 brought about a change in the tax consequences of a spousal support award. The impact spousal support has on taxes now depends on when the general judgment is entered into the court record. With any general judgment entered before 2019 spousal support is considered to be income to the receiving spouse and is deductible to the paying spouse. This created an interrelationship with child support where a party receiving spousal support will have a higher income based upon the support award, while the paying spouse’s income is deemed lower for purposes of a child support award.
However, for judgments entered after December 31, 2018 the tax consequences have been reversed. Beginning Jan. 1, 2019, spousal support payments are not deductible from the income of the payer spouse, or includable in the income of the receiving spouse. However, Oregon’s child support guidelines have not been updated. Therefore, for child support purposes, spousal support is still income to the receiving party and a reduction to the paying party’s income. Judgments that were entered before 2019 but are being modified now should be able to retain the old tax scheme so long as the supplemental judgment does not explicitly apply the new tax scheme.
There are three kinds of spousal support: transitional, compensatory and maintenance.
- Transitional support is for a party to obtain the education or training necessary to allow the party to prepare for reentry into the job market or for advancement in the job market. This type of support is commonly awarded in shorter or mid-length marriages where a party may need additional resources for a limited time to become gainfully employed and to “transition” into single life.
- Compensatory support is for cases when there has been a significant financial or other contribution by one party to the education, training, vocational skills, career or earning capacity of the other party, or where one party is given substantially more value in property during the dissolution and there are no other assets to “offset” the property award. This type of support is usually reserved for rare cases.
- Maintenance support is a contribution by one spouse to the other, either for a specified or indefinite period of time. This is commonly awarded in long-term marriages where there is a significant gap between the earning capacity of the parties, a gap which will probably never be closed or where a party may lack the ability to gain meaningful employment in the future.
Spousal support awarded in a particular case can be a combination of the three kinds of support, such as a higher amount for a period of months in transitional support, and then a smaller amount in maintenance support for a period of months or years, or indefinitely.
Spousal support generally does not automatically terminate upon remarriage of the spouse receiving the support. Either party can ask for a hearing to modify the amount or length of spousal support based on a substantial and unanticipated change in the financial circumstances of either party. Establishing an appropriate amount of spousal support is nearly always interrelated with the division of property in a particular case. For instance, a spouse could be awarded the bulk of equity in the family residence in exchange for not receiving spousal support. Generally, a court would prefer to disentangle the parties if possible (if it is otherwise equitable) rather than order spousal support.
The law relating to child and spousal support is very complex and has a substantial impact on the lives and resources of the parties involved. Legal representation to protect your rights is generally a good investment.
Legal editor: William M. Jones and Cambell Boucher, May 2020