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In this article we will explain the expected changes to Illinois spousal maintenance law for 2018. On July 28, 2017, the Illinois General Assembly passed House Bill 2537, which, if signed by Governor Rauner, will change the way maintenance payments in divorce work in Illinois. HB 2537 proposes to modify Section 504 of the Illinois Marriage and Dissolution of Marriage Act (750 ILCS 5/504), which deals with Illinois spousal maintenance payments, also known as alimony. This is expected to be signed into law and to go into effect in either January or July of 2018. For additional knowledge about how maintenance works in Illinois, you can check out our article, Illinois Spousal Maintenance Explained.
In this article we will explain the changes to Illinois spousal maintenance law for 2019. For additional knowledge about how maintenance works in Illinois, you can check out our article, Illinois Spousal Maintenance Explained.
The Income Threshold for Application of the Statutory Maintenance Guidelines has been Raised
According to the 2015 version of the law, courts are instructed to determine maintenance amount and duration based on the statutory guidelines when the combined income of the parties is less than $250,000.00. The 2019 version of the law changes the income threshold from a combined income of $250,000.00 to a combined income of $500,000.00. This means that the statutory guidelines will be applied to higher income families under the new law. If the combined income of the couple is above this threshold, the court is not required to adhere to statutory guidelines and may determine maintenance amount and duration based on weighing several factors, described here. Note that the court has the ability to deviate from the guidelines even if the income is below this threshold, but it must explicitly explain its rationale for doing so based on an analysis of the previously mentioned factors.
The Tax Burden of Spousal Maintenance Payments Has Shifted from the Recipient to the Payor
One of the most profound changes to spousal maintenance laws in 2019 is the tax treatment of spousal maintenance payments. Prior to 2019, spousal maintenance payments were tax deductible for the payor and were taxable as income to the recipient. For maintenance orders entered in 2019 and beyond, maintenance payments are no longer tax deductible for the payor and are no longer considered taxable income for the recipient. For much more on the implications of this change in tax law, check out our article: Changes to Spousal Maintenance Under the 2019 Tax Law.
Spousal Maintenance Amounts Are Calculated Differently in 2019
Prior to 2019, the amount of spousal maintenance was calculated by subtracting 20% of the gross income of the recipient from 30% of the gross income of the payor. For maintenance orders entered in 2019 and beyond, the calculation is accomplished by subtracting 25% of the net income of the recipient from 33.33% of the net income of the payor.
For more on this, check out our article: How to Calculate Illinois Spousal Maintenance in 2019.
Statutory Guidelines for the Duration of Maintenance Payments have been Reduced in Many Situations
Under both the current law and the 2019 law, the duration of maintenance payments is determined by multiplying by the length of the marriage by a numerical factor determined by the length of the marriage. This means that maintenance payments will last for a term equalling a certain percentage of the length of the marriage, and that this percentage increases as the length of the marriage increases.
Under the current law, the multiplying factors are as follows:
- If the marriage was for 5 years or less, the length of the marriage is multiplied by 0.20 to determine the length of maintenance;
- 5-9 years (0.40)
- 10-14 years (.60)
- 15-19 years (0.80)
- If the marriage lasted 20 or more years, the court is instructed to order maintenance for a term equalling the length of the marriage or, alternatively, permanent maintenance.
Under the 2019 law, the multiplying factors are:
- Less than 5 years (0.20)
- 5 years (0.24)
- 6 years (0.28)
- 7 years (0.32)
- 8 years (0.36)
- 9 years (0.4)
- 10 years (0.44)
- 11 years (0.48)
- 12 years (0.52)
- 13 years (0.56)
- 14 years (0.60)
- 15 years (0.64)
- 16 years (0.68)
- 17 years (0.72)
- 18 years (0.76)
- 19 years (0.80)
- For 20 years or more, the period of maintenance will be equal to the duration of the marriage or for an indefinite term.
So what does this mean? In sum, the 2019 law requires a shorter maintenance payment duration for many people, depending on the length of their marriage.
Let’s work through this. Under both the the 2015 maintenance law and the 2019 law, the duration of maintenance payments is determined by multiplying the number of years that the couple is married by a factor that increases as the length of the marriage increases. So if the couple was married for 4 years, both the new and the old law dictate a factor of (0.2). This means you multiply the number of years (4) by the statutory factor (.2) to determine how long the payor will be required to pay maintenance. In this example 4 years x 0.20 = 0.8 years (or 9.6 months). So this means that if a couple has been married for 4 years the court is instructed to order maintenance payments for 9.6 months.
Again, as the length of the marriage increases, the multiplying factor increases.
Under the 2015 law the multiplying factor steps up in 5-year increments. So, for marriages lasting 5 years through 9 years, the multiplying factor is 0.40 and for marriages lasting 10 years through 14 years the multiplying factor is 0.60 years. The factor does not increase between years 6 and 7, but increases significantly as soon as each 5-year threshold is met.
Under the 2019 law, the first 5 years of marriage are treated the same as under the 2015 law, requiring a 0.20 multiplying factor. However, thereafter the factor will step up on yearly basis rather than every 5 years of marriage.
The result is that the multiplying factor at each 5 year benchmark is the same under both laws, but in-between (e.g. years 6, 7, and 8), the 2019 law calls for a smaller multiplying factor than the 2015 law. This is because the 2019 maintenance law gradually increases every year rather than an immediate up-front step-up for each 5-year increment.
Depending on the length of your marriage, your maintenance duration may be shorter under the new 2019 law than it would have been under the 2015 law. The maintenance duration is not different (1) if your marriage lasted less than 5 years, (2) if your marriage lasted 20 years or longer; or (3) if your marriage length happens to fall at the end of on one of the 2015 law’s 5-year increments. However, for all other marriage lengths, the required maintenance duration will be shorter under the 2019 law than under the 2015 law.
For more on this, check out our article: How is the Duration of Spousal Maintenance Calculated in 2019?
“Permanent Maintenance” has been Changed to “Maintenance for an Indefinite Term”
The 2015 spousal maintenance law provides that for marriages lasting 20 years or more the duration of maintenance should be either “permanent maintenance” or equal to the duration of the marriage. Under the 2019 law, the term “permanent maintenance” will change to maintenance “for an indefinite term.” This means that long-term maintenance situations are less likely to be permanent and more likely to be terminated after at least a term of years equalling the duration of the marriage.
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