Individuals receiving Social Security benefits may see changes in their alimony payments following a state court decision that deems these benefits as eligible for consideration as income for spousal support.
The Colorado Court of Appeals recently ruled that under federal law, Social Security can be factored into determining the amount of alimony one ex-spouse must pay to the other.
Alimony is commonly ordered by courts to aid spouses with significantly lower incomes, particularly those who may have sacrificed career opportunities to care for children or support their partner’s financial endeavors.
The court’s ruling centered around a specific provision of federal law stating that Social Security payments cannot be transferred or assigned.
In a case involving retiree Riley McClure, the court upheld that Social Security should be considered when calculating alimony owed to his ex-wife, emphasizing its role as income.
Judge David H. Yun highlighted that Social Security benefits, along with certain federal benefits, can be used in determining alimony payments even if indirectly allocated.
This decision means that retirees like McClure will still have their Social Security benefits factored into their spousal maintenance fees post-retirement, with potential broader implications for others in similar situations.
Seniors who receive Social Security benefits and are obligated to pay alimony may now face increased monthly payments if their benefits were not previously considered as income.
Recipients of alimony might have grounds to review their payments and potentially seek adjustments if Social Security income was not appropriately included in the calculations.
While some states already incorporate Social Security benefits into alimony assessments, not all seniors may be affected by this ruling.
Kevin Thompson, finance expert and founder/CEO of 9i Capital Group, suggested that most seniors may not be significantly impacted by the alimony ruling.
However, concerns arise concerning potential challenges to the ruling, especially given the economic pressures faced by seniors reliant on Social Security amid rising costs of living.
With inflation affecting essentials such as housing and healthcare, there may be arguments to safeguard Social Security benefits from being heavily affected by alimony obligations.