Understanding and Calculating Alimony (Spousal Support) in Oregon

oregon alimony

In Oregon, alimony is referred to as spousal support and is awarded to one spouse in some cases when a divorce takes place. The Oregon divorce laws that encompass alimony are outlined in the Oregon Revised Statutes (ORS), primarily in Section 107.105 and 107 sub-sections 036,105,135,136, and 412.

Here is some information essential to know if spousal support will factor into your divorce.

  1. Types of Spousal Support in Oregon
  2. Factors That Determine Spousal Support Amounts
  3. Duration of Payments
  4. Modifying a Support Order
  5. Options When Non-Payment is an Issue
  6. Does Child Support Affect Spousal Support?
  7. Does Asset Division Affect Spousal Support?
  8. Spousal Support and Taxes

Types of Spousal Support in Oregon

Three types of spousal support are awarded in Oregon. Each has a distinct purpose and one which a spouse receives will depend on several circumstances. The three types are:

Transitional Spousal Support. Transitional support provides financial stability that allows a spouse to seek more education or training to become more employable and increase their earning capacity. This type is the most common and is awarded for a specified time to support an unemployed, under-employed, or low-wage earning spouse.

There may be gradual decreases in transitional support in some long-term Oregon marriages. These are known as “step-downs” and are put in place with the presumption that the receiving spouse gradually increases their income over time.

Compensatory Spousal Support. This is financial support that is considered compensation when one spouse makes significant financial or other contributions to the education, training, career, or earning capacity of their spouse, resulting in that spouse’s increased earning power. Often, one spouse will stay home and take care of domestic responsibilities such as caring for the home or children while the other spouse spends several years investing in their career.

Spousal Maintenance. This is a longer duration form of spousal support in Oregon. It is awarded in cases of a long-term marriage where one spouse cannot support themselves, and it isn’t reasonable to expect they can get the training or education they need to increase their earning power.

Most of the time, this support is for marriages lasting for 20 years or more (but sometimes in shorter marriages), when spouses are close to retirement age, or when one spouse has health conditions that increase their expenses and limit their capacity to work.

These types of alimony are not exclusive, and in some cases, the court may include settlements that include more than one type of support.

Also, spousal support is usually agreed upon by both spouses and approved by the courts. When that doesn’t happen, spousal support is ordered during a trial and is decided by the court.

Each spouse must disclose what assets they hold to the other spouse as part of the divorce process. This is the only way to ensure that an equitable division of assets occurs. It’s also important in figuring out child support and alimony issues as well. If spouses are reluctant to do so, legal actions are available, including serving a subpoena on financial institutions to get all required information.

Read More: What Happens if There are Hidden or Undisclosed Assets in a Divorce?

Factors That Determine Spousal Support Amounts

Oregon is one of the few states that legally adhere to a “no-fault divorce.” This means that one spouse’s wrongdoing or negative behaviors will not be considered a “cause” of the divorce. As a result, fault is not considered when an equitable division of assets occurs or determining the amount of spousal support.

Oregon is unique in that statutes have different factors depending on the type of support being awarded. After a spouse proves the need for support and that the other spouse can afford to pay, the following factors are used to determine the amount and duration:

Transitional Support

  • the length of the marriage
  • a spouse’s training and employment skills
  • a spouse’s work experience
  • the financial needs and resources of each spouse
  • the tax consequences of support to each spouse
  • custodial and child support responsibilities, and
  • any other factors the court deems just and equitable.

Compensatory Support

  • the amount, duration, and nature of the spouse’s contribution
  • the length of the marriage
  • the relative earning capacities of each spouse
  • the extent to which the marital estate already benefitted from the contribution
  • the tax consequences to each spouse
  • any other factors the court deems just and equitable.

Spousal Maintenance

  • the length of the marriage
  • the age of both spouses
  • the health (including physical, mental, and emotional) of each spouse
  • the marital standard of living
  • the relative income and earning capacity of each spouse
  • a spouse’s training and employment skills and work experience
  • the financial needs and resources of each spouse
  • the tax consequences to each spouse
  • custodial or child support responsibilities
  • any other factor the court deems just and equitable

The court can order one type of support or a combination, depending on the needs of the spouses.

There’s no specific formula for the court to decide spousal support, and judges have complete control over the final award. Couples who would like to determine the type, duration, and amount of spousal support can work together to negotiate the terms, and the court will review and approve it if it is deemed fair and equitable.

If spousal support is a contested issue in your divorce or separation trial, parties must complete and file a Uniform Support Declaration and serve it on the other party.

Read More: Everything You Need to Know About Alimony

Duration of Alimony Payments

There is no formula for determining how long spousal support payments must be made. A judge determines duration in Oregon family court. Typically support is usually based on the length of the marriage. One common metric is that one year of alimony is paid every three years of marriage

In some cases, judges may order a lump-sum payment of support, periodic payments, or a transfer of property ownership. Lump-sum payments are helpful in cases where the supporting spouse is self-employed or otherwise has an unsteady income. These cases don’t require ongoing court oversight after the paying spouse satisfies the order.

Couples can decide the payment method, such as a direct deposit or a personal check. If there are concerns about payments, courts can include an income withholding order directing the paying spouse’s employer to withhold spousal support from the employee’s paycheck. Those funds are then forwarded to the recipient spouse.

In some cases, especially if a paying spouse has a significant amount of property received in the divorce, the court will order the supporting spouse to transfer real or personal property ownership to the recipient as part of the support order.

Modifying a Support Order

There are instances when life events can impact a spouse’s ability to make support payments. A job loss or health issues could result in a spouse seeking to have a support order modified. If the recipient spouse’s job status or marital status changes, these could also be valid reasons for modifying support.

Either spouse can ask the court to modify or terminate spousal support, but a judge will only change or end the award if the requesting spouse demonstrates a substantial change in circumstances to either spouse since the last order.

Options When Non-Payment is an Issue

If one spouse does not make support payments on time, this outstanding debt is known as alimony arrears. Arrears can be collected through mediation, small claims court, or wage garnishment.

Mediation is often a preferred choice for many couples because it can also resolve other issues such as property division, child support, debt, and so forth, saving thousands of dollars in legal fees and avoiding court.

If your spouse isn’t paying court-ordered support, you can ask the court to enforce the award by filing a formal motion with your local court. Penalties for failing to pay may include attorney’s fees, fines, or even jail time.

Failing to comply with a court-issued spousal support order may also result in a contempt of court charge against the spouse who failed to pay owed alimony. In extreme cases, this could lead to jail time.

Does Child Support Affect Spousal Support?

Because both parents are responsible for meeting the financial needs of their children in Oregon, this does have an impact on the overall amount one spouse may receive. When appropriate, spousal support and child support are considered together, including how much time children spend with each parent and other factors.

When determining child custody and parenting time, the court will usually decide issues concerning child support, health insurance for the minor children, and payment for uninsured medical expenses.

The Oregon Department of Social Services provides a Child Support Guidelines Calculator and a Child Support Worksheet to help estimate a parent’s fair share of child support. The state also provides a Parenting Time Calculator to help calculate parenting time percentages.

Read More: The Ultimate Guide to Child Support

Does Property Division Affect Spousal Support?

Oregon is an equitable division state, meaning that courts will divide all marital assets fairly and equally, although not necessarily divided equally on a 50/50 basis.

Property division can impact spousal support and be used as part of negotiations. For example, one spouse may give up their interest in the family home in exchange for not having to pay spousal support. This would be the equivalent of a lump sum support payment.

Debts are also divided in Oregon in the same way as assets. The same applies to pensions, IRAs, and 401k accounts. They are also considered marital property and subject to equitable distribution laws. Any amounts before marriage or after separation are regarded as separate property. However, this applies only to the amounts accumulated during the marriage.

Spousal Support and Taxes

Beginning January 1, 2019, as part of the Tax Cuts and Jobs Act, spousal support or separate maintenance payments are not deductible from the income of the payer spouse or includable in the income of the receiving spouse if made under a divorce or separation agreement executed after December 31, 2018.

You can’t deduct alimony or separate maintenance payments made under a divorce or separation agreement executed before 2019 but later modified if the modification expressly states the repeal of the deduction for alimony payments applies to the modification. Alimony and separate maintenance payments under such an agreement are not included in your gross income.

According to the IRS, a payment is alimony or separate maintenance if all the following requirements are met:

  • The spouses don’t file a joint return with each other
  • The payment is in cash (including checks or money orders)
  • The payment is to or for a spouse or a former spouse made under a divorce or separation instrument
  • The spouses aren’t members of the same household when the payment is made (This requirement applies only if the spouses are legally separated under a decree of divorce or separate maintenance.)
  • There’s no liability to make the payment (in cash or property) after the death of the recipient spouse
  • The payment isn’t treated as child support or a property settlement.

If you paid amounts that are considered taxable alimony or separate maintenance, you may deduct from income the amount of alimony or separate maintenance you paid whether or not you itemize your deductions.

Not all payments under a divorce or separation instrument are alimony or separate maintenance. Alimony or separate maintenance doesn’t include:

  • Child support
  • Noncash property settlements, whether in a lump sum or installments
  • Payments that are your spouse’s part of community property income
  • Payments to keep up the payer’s property
  • Use of the payer’s property
  • Voluntary payments (that is, payments not required by a divorce or separation instrument).

Child support is never deductible and isn’t considered income. Additionally, if a divorce or separation instrument provides for alimony and child support, and the payer spouse pays less than the total required, the payments apply to child support first. Only the remaining amount is considered alimony.

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