What is PSS?
PSS stands for post separation support which is a form of spousal support. For PSS to be awarded there must be a supporting spouse and dependent spouse. The supporting spouse is the primary breadwinner while the dependent spouse is often a stay at home mom or dad or a spouse that earns significantly less than the supporting spouse.
The goal of PSS is to equalize the parties income as much as possible following separation. Even with a PSS award, most parties’ incomes will not be equal but it will help alleviate the financial burden on the dependent spouse.
Click here for more information on post separation support
What formula does NC use now to calculate PSS?
North Carolina has no specific formula. The North Carolina statute on PSS provides factors for the court to consider when making the award. The factors include, but are not limited to, the parties’ present employment income, debt and accustomed standard of living. The full list of factors to be considered is outlined in North Carolina General Statute § 50-16.2A.
The court may base its award for PSS on the verified pleading, affidavit or other competent evidence. The parties’ fill out an affidavit that outlines his or her financial situation so the court may better understand how each party’s money is spent each month. An example of the financial affidavit is included below in the link for the Local Rules discussed in this article.
Given the fact there is no specific formula in North Carolina this often results in a wide range of awards depending on the judge, county and parties to a case. The goal of a formula is to reduce the uncertainty of the PSS award.
What are “Local Rules”?
In North Carolina, many counties have “Local Rules” which are rules that a particular county follows in addition to the statutes that the state legislature has issued. Local Rules are intended to give additional guidance and direction in family law cases. At times the North Carolina General Statutes can be vague and Local Rules often help to fill in the blanks. Local Rules cannot override or alter the statutes but are merely a supplement to them.
Most counties in North Carolina do not have extensive Local Rules outlining a suggested formula for calculating PSS. The counties that do have local rules pertaining to PSS typically require each party to prepare and serve a financial affidavit on the other party before a hearing. The rules do not, however, provide any actual guidance on how to calculate the PSS amount beyond what the statute states. The parties are at the mercy of the court to determine a fair and reasonable amount. The courts certainly try to be fair but given the fact there is no specific formula awards will vary from county to county and judge to judge.
But, two counties in NC have decided more guidance is needed to calculate PSS.
Chatham and Orange counties have adopted Local Rules regarding PSS to help guide the attorneys, parties and judges in cases by providing a formula that calculates a suggested PSS amount.
Click here for the local rules and forms:
Chatham and Orange counties are situated in Judicial District 15B. Chapel Hill is in Orange County, North Carolina and Pittsboro is in Chatham County, North Carolina. Local attorneys and judges developed a formula that results in a suggested PSS amount for the court to consider. The goal is to eliminate some of the guess work in calculating PSS amounts and hopefully result in more fair, consistent PSS awards.
How were the PSS rules created?
Judicial District 15B Local Rules (the “District 15B Rules”) provide a formula that was created after examining formulas in nine other jurisdictions. As opposed to running the numbers of each case through nine formulas and calculating an average, the District 15B Rules reliably generate a number that is within 1% of the average generated by the other jurisdictions’ formulas.
How do the rules help?
The District 15B formula produces an award that is a suggested PSS award. The judge is not bound by the number the formula generates but rather it is for informational purposes. In reality, it would seem judges would make most rulings based on the number the formula calculates unless the circumstances of the particular case dictate otherwise. If the judge doesn’t use the number generated, he or she would probably issue an award very close to that number. However, as with all matters in family law cases, each case has its own unique set of facts and circumstances which will certainly be factored into each award.
What documents does the court use with this formula?
The District 15B Rules provide three forms:
- The affidavit for each party to fill out with relevant financial information.
- The worksheet which is used to calculate the suggested PSS amount.
- The order the judge may use when awarding or denying alimony.
The affidavits are critical documents as they specifically outline each parties’ financial situation and are used in calculating the PSS award. The worksheet is used to calculate the award by plugging in the numbers on the affidavit. The order is the actual legal document the court issues setting the PSS award.
So how does the formula work?
First, lets take a look at the definitions regarding income that are used in calculating the PSS amount.
The definitions used in the formula to generate the suggested PSS amount are:
Monthly Gross Income: Pre-tax wages, profits, or other income received from any source, as defined in the NC Child Support Guidelines. In simpler terms, the top amount on your pay stub you see before any deductions are taken out.
Adjusted Monthly Gross Income (AMGI): Monthly Gross Income (above) plus monthly child support received for any child or spousal support received from a previous spouse; and minus monthly child support paid for any child or spousal support paid to a previous spouse.
Formula Definition. The suggested PSS amount is calculated by subtracting 3% of the Dependent Spouse’s Adjusted Monthly Gross Income from 30.25% of the difference between Adjusted Gross Monthly Incomes of the parties.
Actual Formula: (Supporting Spouse's AMGI - Dependent Spouse's AMGI) x 0.3025 - (minus) Dependent Spouse's AMGI x 0.03 ________________________ Suggested PSS Amount
Here is an example of how the formula works from the Local Rules Handbook:
Wife (Supporting Spouse) makes $150,000 per year ($12,500 per month)
Husband (Dependent Spouse) makes $30,000 per year ($2,500 per month)
Wife pays Husband $1,869.00 per month in child support for 2 children.
Wife’s Monthly Gross Income is $10,631 ($12,500-$1,869)
Husband’s Monthly Gross Income is $4,369 ($2,500 + $1,869)
Formula Calculation: $10,631-$4,369= $6,262 x.3025= $1,894.26 $4,369 x.03= $131.07 $1,894.26 - $131.07 =$1,763.19 PSS Award: $1,763.19
Impact on each parties’ income after calculating the PSS award:
Wife’s Monthly Income is now $8,867.81 ($10,631-$1,763.19)
Husband’s Monthly Income is now $6,132.19 ($4,369 + $1,763.19)
When does the court issue or deny the PSS award?
The PSS award may be determined either in court or when court is out of session. If the parties agree, the PSS determination may be made out of session by the judge based upon the PSS affidavits which means there would be no hearing. If the parties do not agree to an out of session determination, or if they agree to a hearing, the PSS award will be determined when court is in session. However, the court in its discretion may hear the matter in or out of court regardless of the preference of the parties.
Are there any limitations with the formula?
- The formula should not be used if dependent makes more than $16,666.67 a month or $200,000 a year.
- The formula is not used to calculate alimony.
- The formula is not intended to determine if a spouse is dependent or supporting. The results of the formula will only be accurate if dependance is determined before the formula is applied.
Key Points to Remember
- The formula generated by the Local Rules is a suggested amount for the judge to review. A judge still has the authority to determine the award regardless of the number the formula generates.
- This formula is included in the Local Rules of Chatham and Orange County only. Most other counties do not have Local Rules this specific related to PSS. However, it would not be surprising if other counties follow suit in the future. It is important to review the Local Rules for your particular county.
- The issue of fault, to include illicit sexual acts, must be addressed especially if committed on the part of the dependent spouse. There is no discussion of the role fault plays in PSS cases in District 15B Local Rules. Illicit sexual acts on the part of the dependent spouse and none on the part of the supporting spouse is a bar to post-separation support. This is an important issue that must be addressed.
