As most divorce lawyers know, alimony and child support calculations are based on the income of each spouse. As a result, it is important to establish a clear definition of “income” in this context. The problem is that many states define income differently, and these definitions may change from time to time. These states regularly update their official definitions, often including or excluding specific sources of income. A recent decision in Colorado shows that this definition may change over time.
Colorado Decides That Social Security Can Be Diverted to Pay for Alimony
In 2024, the Colorado Court of Appeals decided that Social Security benefits could be diverted or “garnished” in order to pay for a spouse’s alimony. As Colorado Politics noted, the Centennial State was relatively late to the game – as many other states had already addressed and resolved this issue.
Federal Law states that Social Security benefits are not transferable or assignable. However, it also states that Social Security benefits shall be subject to alimony obligations. At first glance, these two provisions seem at odds with one another.
The case in question involved a man who paid his wife $2,400 each month in spousal maintenance. After he reached retirement, he started receiving Social Security. At this point, he petitioned to have his alimony reduced – and he was successful. A family judge agreed to reduce his alimony obligation to just $700 per month.
However, this reduction still was not enough for the husband to make ends meet. He was earning just $300 per month in non-Social Security funds, which meant that he needed an extra $400 to keep paying alimony. As a result, he needed to transfer $400 of his benefits each month to his ex-wife.
In an effort to keep more of his Social Security benefits, the husband argued that his situation represented a violation of federal law. This is despite the fact that the Supreme Court resolved this question back in 1979, stating that Social Security could be used to pay alimony. In 1993, courts in North Carolina decided that a spouse does not count as a “creditor” when trying to access their ex’s Social Security.
Not All Income “Counts”
In short, the Colorado decision is not a surprise. But are there any government benefits or income sources that are truly “off-limits” for spouses receiving alimony? One example in Colorado is child support, and this type of income should never be used to calculate alimony obligations.
Another example is income from any “means-tested public assistance programs,” including the Colorado Works Program (Temporary Assistance for Needy Families), supplemental security income, food stamps, and “general assistance.”
Colorado’s alimony statute also states that Social Security benefits received by a parent on behalf of a minor child were always ineligible – even before the recent court decision.
Finally, earnings or gains on retirement accounts cannot be defined as “income” when calculating alimony amounts. However, this exclusion may not apply if the party takes a distribution from their retirement account.
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