California Alimony Calculation – Fringe Benefits as Income Available for Support

California Alimony CalculatorOne of the biggest battles in many contested divorce cases is the issue of spousal support (also commonly referred to as alimony) and analysis of California spousal support factors. The most prominent factors a court typically considers when making a spousal support award are the supported spouse’s needs and the supporting spouse’s ability to pay support. Therefore, the supported spouse wants to make sure the court considers every single source of income the supporting spouse has available for support. The supporting spouse wants to minimize his/her income as much as possible without misleading the Court or the other party. One issue that has been litigated in California courts is whether fringe benefits or “perks” received through employment are income available when calculating support.

Many companies offer alternative compensation or perks to employees such as car allowances, cell phones, business meals, and company-provided day care. Parties and attorneys often debate whether these “non-cash” perks should be considered income from which the supporting spouse can pay support. Under California law, perks can be considered as income available for support if the benefit is not being divided as an asset and it has an economic value which can be added to the spouse’s income for the purposes of support calculation.

Learn more about division of property in divorce

Cell Phone as Fringe Benefit in Alimony CalculationIn cases where a benefit will directly reduce the supporting spouse’s monthly expenses, divorce attorneys will argue that it should be considered as income for support purposes. For example, if the supporting party’s employer pays for his/her cell phone every month and the cell phone is not limited to company use, the supporting party will not have to pay monthly cell phone premiums for personal use of a cell phone.

Likewise, if a company pays for the supporting party’s gas or auto insurance, the supporting party will not pay those expenses out of pocket. In these situations, the fringe benefit will likely be valued and included as income available for support.

Another major issue of contention in this area of law is whether the value the benefit assessed should be considered “taxable” or “non-taxable” income. According to the divorce attorneys at the firm, one California case holds that tangible benefits should be included as taxable income. However, until the employee actually pays taxes on such benefits it is unfair to consider them as gross deductions.

Business Lunch as Fringe Benefit in Alimony CalculationIn addition, some benefits such as a business meal may not reflect the cost of a normal meal. The supporting spouse may get to eat a $50.00 lunch on the company’s dime; however, if he/she had bought their own lunch, he/she would likely have spent less than $10.00. The court will use discretion in considering a request from a party or divorce attorney to categorize these types of benefits as income where the result might seem unreasonable.

Read more about the effect of divorce on taxes and finances

Unfortunately, there is no such thing as a San Diego spousal support calculator, and analysis of the factors affecting spousal support in California is complicated. Often times, a person will need to rely on the advice of an experienced and knowledgeable divorce lawyer in order to understand the theories and process involved.

Please contact us if you are considering a divorce from your spouse, a legal separation, or have questions regarding child custody and visitation. Nancy J. Bickford is the only attorney in San Diego County representing clients in divorces, who is a Certified Family Law Specialist (CFLS) and who is actively licensed as a Certified Public Accountant (CPA). Don’t settle for less when determining your rights. Call 858-793-8884 in Del Mar, Carmel Valley, North County or San Diego.