Understanding and Calculating Alimony in Indiana

Before you engage in divorce negotiations, it's important to understand how courts in Indiana make decisions about alimony (spousal maintenance).

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Alimony—or spousal maintenance as it's called in Indiana—is a court-ordered payment from one spouse to the other during or after the divorce. Courts in Indiana historically ordered alimony in divorce to ensure that both spouses received a fair property division. However, years ago, the state enacted new laws changing the name of "alimony" to "spousal maintenance," and a new definition allows judges to award maintenance to spouses that need financial support. (Ind. Code Ann. § 31-15-7-1 (2018).)

The concept of alimony isn't new and came about during a time when it was common for one spouse to work full-time and support the family while the other stayed home to care for the family. A stay-at-home spouse often had trouble adjusting to paying bills after a divorce, especially when the primary earner paid for all the expenses. Although it's common today for both spouses to work outside the home, spousal maintenance is still available if the lower-earning spouse meets the state requirements.

Qualifying for Alimony in Indiana

Either spouse can ask for maintenance in a divorce, but Indiana has strict guidelines regarding who is eligible. The court presumes that both spouses will work to support themselves after the divorce. However, the law allows a judge to order spousal maintenance if any of the following factors apply:

  • the requesting spouse is physically or mentally incapacitated to the extent that the spouse can't become self-supporting
  • a spouse lacks sufficient property (including marital property) to meet financial needs and the spouse is a custodial parent of a child with physical or mental illness that makes it impossible for the custodial parent to work, or
  • the court finds that rehabilitative maintenance is necessary for a supported spouse to acquire training or education to find property employment to become financially independent. (Ind. Code Ann. § 31-15-7-2 (2018).)

Types of Spousal Maintenance in Indiana

Many spouses are concerned with how they'll make ends meet while their divorce is pending. In Indiana, you can ask a judge for temporary maintenance, which is appropriate in cases where one spouse is unemployed or doesn't earn enough to pay for a new household without help from the other spouse. If the judge determines that you need support and that your spouse can pay, the court will order payments from your spouse. Temporary support ends when the judge issues a new support order and/or finalizes the divorce.

Courts in Indiana can only award maintenance after the divorce if the requesting spouse meets one of the specific circumstances listed above. Once the court decides that support is appropriate, the judge will order it in an amount and duration that is appropriate to meet the spouse's needs.

Physical or mental incapacity

If the court finds the spouse is physically or mentally incapacitated, the judge can award support for as long as the incapacity lasts, which can be short-or long-term. The court will retain the right to review and change the support order later.

Custodial parents without property

In cases where a custodial parent doesn't have enough marital property to meet financial needs and can't work due to a child's physical or mental illness or disability, the court will order spousal maintenance for any duration the judge finds appropriate. Both circumstances must apply before the court awards support.

Rehabilitative support

The most common type of maintenance is rehabilitative support, which is awarded when the court believes that one spouse can become financially independent, but needs support while receiving an education or training to become employable. Rehabilitative support applies, and the court will order it only after evaluating the following factors:

  • each spouse's educational level at the time of the marriage and on the date of the divorce
  • whether the requesting spouse interrupted education, training, or employment opportunities during the marriage due to homemaking or childcare responsibilities, or both
  • each spouse's earning capacity, including educational background, training, employment skills, work experience, and length of employment or absence from the job market, and
  • the time and expense necessary for the supported spouse to gain sufficient education or training to enter the workforce and find appropriate employment.

If the court believes that you meet the requirements for rehabilitative maintenance, the judge can order support payments for up to three years. (Ind. Code Ann. § 31-15-7-2 (3) (2018).)

Unless you agree otherwise in writing, the court can modify (change) any maintenance order if there is a substantial change in circumstances since the last order. (Ind. Code Ann. § 31-15-7-3 (2018).)

Unlike child support, there is no specific formula for judges to calculate a support amount. Judges have broad discretion and will try to calculate an amount that will allow both spouses to have similar lifestyles after the divorce.

Making Alimony Payments

If the paying spouse doesn't have steady employment but has many assets, the court may require a lump-sum (one-time) payment. Although a lump-sum payment seems daunting, it permanently relieves the paying spouse's obligation for support in the future.

Most spousal maintenance orders require periodic payments from the paying spouse. Unless the couple agrees otherwise, the court usually includes an income withholding order with the support order, which directs the paying spouse's employer to deduct the maintenance amount from a paycheck. Income withholding orders include the amount and frequency of the deduction, as well as where the funds should go after payroll reduces the paycheck. (Ind. Code Ann. § 31-15-7-10 (2018).)

If a paying spouse quits a job or otherwise fails to meet support requirements, the spouse receiving support can ask the court for help enforcing the order. Violating a support order is serious, and if you don't pay, the court may find you in contempt, which can result in fines, attorney fees, and costs, or, more seriously, a jail sentence.

Alimony and Taxes

Maintenance payments are tax-deductible to the paying spouse and reportable income to the recipient if you finalized your divorce before January 1, 2019. Otherwise, for divorces finalized on or after January 1, 2019, payments are not tax-deductible to the paying spouse or reportable income for the supported spouse. Couples should discuss how the tax changes impact their support order before negotiating a settlement agreement.