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Why Get a Cap on Maintenance Bonuses?

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Categorized as Spousal Support

Whether you have been ordered to pay maintenance to your spouse, or are in the process of determining how much to pay maintenance to your spouse, you probably know by now that your bonuses are included as part of the calculation.

 

Maintenance calculations in Illinois are based on several factors, including the income of each party and the standard of living established during the marriage, among other factors. If bonuses have been part of your income during the marriage, then it has been part of the standard of living established during the marriage. The problem comes, however, as to how to include the bonuses into the maintenance calculation.

 

If you are the spouse requesting maintenance, you will want to include the bonuses as part of the total calculation to determine a fixed monthly amount. The problem with this calculation is that bonuses may only come at the end of the year, which would mean a severe cash flow for the first 11 months until the bonus arrives. In addition, bonuses are usually not guaranteed and could vary. Because of this issue, most payor spouses will request that maintenance be based on their base salary. With this option, however, the payor spouse will likely be required to pay maintenance off of his bonuses.

 

Because maintenance is supposed to maintain the “standard of living” established during the marriage, it seems to reason that there needs to be a limit, or “cap”, on the amount that a spouse should be ordered to pay from their bonuses. If the payor has an excellent year after the marriage, and earns an additional $20k-$50 in bonuses, then the payee spouse gets a windfall in that she benefits from income she never enjoyed during the marriage.

 

As a result, if you are the payor spouse, you should request that the judge cap the amount of maintenance you are required to pay from your bonus to a fixed amount that closely resembles the standard of living established during the marriage. This would likely be a fixed number, such as no bonuses paid after the payor reaches $100,000. That way, the payor spouse has an incentive to continue to continue to earn more money, and the payee spouse also gets her portion of the bonus.

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