Impact of FSA and 401(k) deductions on Alimony Calculations


A recent Central Florida case was heard by the District Court of Appeals which determined that a trial court erred by allowing the cost of contributions to a 401(k) and a Flexible Spending Account (FSA) to be deducted from the former wife’s income for the purposes of determining available income for alimony.

Calculation of alimony is often determined in part by comparing the income of both spouses and assessing each person’s needs and ability to pay.  Some payments are allowed to be subtracted from each party’s income before the alimony is calculated.  The District Court of Appeals used Florida Statute 61.30(3) to describe allowable deductions which include deductions for health insurance, court ordered support, mandatory union dues and mandatory retirement payments (among others).

The Court determined in this Lake County case that because the wife had the ability to change or eliminate her contributions to both her 401(k) and FSA plan that these payments were not mandatory.  Therefore the payments must be included as part of her monthly income for the purposes of calculating alimony.

What Is The Impact?

Calculation of alimony can be complicated and contentious since Florida does not have a statute providing specific guidance on the calculation.  Often, income deductions can make an impact to the spouse making the payment, but the amount of impact varies greatly from situation to situation.

In my experience, I rarely see 401(k) or FSA plans that are truly mandatory.  The most frequent place I see mandatory retirement contributions are primarily with government, public safety and union jobs.  If these things are at issue in your case, make sure to discuss the details of the FSA and retirement plans with your attorney.

DCA Case#: 5D12-2234 (August 2013)