An issue that comes up frequently involves a client that has been out of the workforce, but is feeling some pressure – either internal, from another person, or both – to go back to work. If a divorce is looming, or even in-process or finished, and you find yourself in this situation, should you go back to work?
Imagine a parent that has not been employed because the parent has been raising children at home. Let's just jump directly into the pool of stereotypes and assume for purposes of this post that we are talking about a mother that had a career, then had one or more kids and left her job to raise the children.
The Impact on Massachusetts Child Support from Returning to Work
Fast-forward, and now both children are in school the entire day, and unfortunately the marriage is ending. Assume the husband works full-time, and will be paying child support to the wife. Running two separate households is obviously more expensive, but the amount of income has not changed. Budgets are tight, really tight in fact. It looks like the marital home may have to be sold and the kids will have to switch schools (not the end of the world of course) unless there is a way to create more income.
While out at dinner with some girlfriends, our hypothetical mom says that she is thinking about going back to work. Her friend, also divorced and on her third glass of wine, exclaims dramatically “But you will get less child support if you go back to work!”
So, should Mom go back to work? What about her Massachusetts child support?
I think it is almost always better if mom, who we shall call Daphne, goes back to work, but there are a number of things to consider.
Yes, it is true that if Daphne has income of her own, this income will be factored into the child support guidelines and her support will decrease. But depending on the income levels and the difference between each parent's income, the child support may not decrease as much as you might expect.
Let's try an example using the following info (please try to remain calm, I know this is exciting):
Daphne Not Employed
- Dad, or Fred as he shall be named, earns $135,000 per year as an investigator.
- There are two children, and Daphne does about 2/3 of the total parenting since Fred travels for work somewhat regularly.
- Daphne has a job offer, in her field of previous employment, for $55,000.00. It is less income than what she made before the kids, but she has been out of the workforce for 8 years, and she can have some flexibility with her hours.
- Without any of her own income, Daphne would get $605.00 per week in child support. I included that Fred was paying $110.00 per week for medical insurance and $12.00 weekly for dental insurance for the family.
- Daphne's total “income” would be $31,460.00, all from child support, but child support is not taxable.
- Daphne takes the job at a starting salary of $55k per year, or $1057.69 per week.
- Daphne's child support decreases, but only goes down to $549.00 per week, for a loss of $56.00 per week.
- Daphne now has weekly tax-free child support of $549.00, and her own pre-tax (gross) income of $1,057.69! She has annual income of $83,547.88, and only pay taxes on her earned income, not the child support.
Returning To Work During Divorce?
We don't need to be math wizards to see that Daphne now has a better financial picture and has more income, even though her child support is lower. Hopefully Daphne is reading this blog post and not listening to her friend.
The simple example above does not consider any other benefits that may be available to Daphne now that she is back in the workforce. Here are a few other variables to consider:
- What if Fred should lose his job? Without her own income, Daphne's financial future is totally dependent on Fred's salary.
- If Fred got laid off, what about health insurance for the family?
- Since Daphne has a job, she would have more options for medical insurance.
- Daphne gets herself back in the workforce, and because she is bright and works hard, she gets promoted and starts climbing back up the income ladder. Bringing home the bacon. Frying it up in the pan.
- Daphne starts putting her own money away for retirement, taking advantage of her company 401(k) plan.
- Daphne meets people, and gets to talk to real adults. She makes some new friends. Studies show that women working after divorce report being happier, more financially secure, and have a better quality of life.
- Daphne, with significantly more income, will be able to get a mortgage on her own and maybe keep the marital home, or buy another place if preferred.
As you can see, there are many more positives for Daphne to go back to work. She will have increased financial security and peace of mind. She will not be tied financially to Fred, helping her feel more confident and in control of her own future. This situation is better for the children and clearly more advantageous than the $56.00 of child support that she “lost.”
To keep the example from having too many variables, I left out one other factor – child care. If Daphne had child care expenses, that expense could be factored back into the child support calculation, or perhaps she and Fred negotiate that this cost will be shared outside of child support. Perhaps Daphne's mom lives nearby and watches the kids after school for a couple of hours, takes Scooby out for his walk, and Daphne does not have to pay any childcare. Even with the costs of the typical after-school care program, Daphne is better off with her new job.
You go, Daphne.
Another point to remember is to make sure you are getting good advice when dealing with these important decisions. Just doing what a friend or relative says, despite their good intentions, is oftentimes a bad idea.
If you want to check out the Massachusetts Child Support Guidelines, and run some scenarios of your own, you can click here to go to the guidelines worksheet. Once on the page, select “Online Tools.”