Earning Capacity: Alimony and the Invisible Paycheck

Income Variability

Things change.  Incomes rise and fall, jobs come and go, marriages last…and some of them do not.  In an economy where the only constant is unpredictability, a theme of increasing frequency in divorce litigation is the difficulty in calculating appropriate alimony or child support figures when earning capacity is taken into account.  When a breadwinner has fallen on hard times – late in a marriage, during a divorce, or immediately thereafter – and is constrained to take a cut in income, should support figures be based on what he or she now earns, or should they instead be based upon what could be earned given that person’s experience, education, credentials, and marketability?

Trial Courts in Connecticut

Trial courts in Connecticut often utilize the concept of “earning capacity,” which is “meant to be a flexible concept, particularly suited to cases where the designation of a precise monetary value of earned income is inappropriate.”  Weinstein v. Weinstein, 87 Conn. App. 699, 710 (2005).

The Connecticut Supreme Court has defined earning capacity as “not an amount which a person can theoretically earn, nor is it confined to actual income, but rather it is an amount which a person can realistically be expected to earn considering such things as his vocational skills, employability, age and health.”    Weinstein, 280 Conn. 764 (2007).  The Appellate Court has noted that “it is particularly appropriate to base a financial award on earning capacity where there is evidence that the payor has voluntarily quit or avoided obtaining employment in his field.”  Hart v. Hart, 19 Conn. App. 91, 95 (1989).

Appellate Court: Tanzman v. Meurer

In a decision, our Appellate Court reaffirmed the assignment of an earning capacity to a payor of alimony (who sought to reduce his obligation after claiming to receive decreased taxable earnings at his new job), and further underscored the weight an earning capacity determination can have on the primary wage earner of a marriage.  In upholding the decision of the trial court which denied a modification of alimony, the Appellate Court pointed out that the plaintiff husband had “failed to provide us with any statute, case law, or rule of practice that requires the trial court to specify an exact earning capacity when calculating an alimony and child support award.”

Tanzman v. Meurer, AC 30723, 128 Conn. App. 405 (released May 23, 2011).  In other words, under current case law in our state, a judge in a divorce proceeding may assign one party with an earning capacity – and award alimony and/or child support based on that notion of the payor’s expectation of earnings – but there is no requirement whatsoever that requires the Court to precisely specify the monetary value it assigned based on the evidence presented at trial.

Post-Judgement Motions

This soft spot in our jurisprudence can and does cause additional complications in post-judgment motions to modify support orders, when one party seeks to demonstrate a “substantial change in circumstances” as required by Connecticut General Statutes § 46b-86 et seq.

Indeed, when an original alimony award was predicated on earning capacity and not on actual income, and the earning capacity was further left undefined by a trial court, a litigant faces the daunting task of demonstrating a “substantial change” to a non-quantified number.  Instead, a moving party is charged with relying upon extrinsic and collateral evidence to demonstrate that his or her earning capacity – however slippery and undefined – has substantially changed within the meaning of the statute and applicable case law.

As a potential payor of alimony in a divorce proceeding, one should be aware that a judge might not simply glance at a tax return or even at a paystub, but may instead base his or her decision on a comprehensive history of the parties’ earnings, education, employability, and economic resilience.  Moreover, even after that award is determined, any litigant would be best served to seek the counsel of an experienced family law attorney before attempting to modify the award based on decreased income or a change in employment.

Any questions about this posting or confidential inquiries concerning the subject matter may be directed to Attorney Joseph C. Maya at jmaya@mayalaw.com or by telephone at (203) 221-3100.