Distinguishing Between Compensatory Pension and Compensation in Divorce Proceedings
There are differences between the two precepts.
The compensatory pension is an economic benefit to one of the parties when they are left in a state of imbalance, generally when their economic situation worsens due to separation or divorce.
It is not about equalizing their assets, but rather supporting the most vulnerable in order to balance their economy. The amount of the agreement is expressed in a regulatory agreement. If there is no agreement, the Judge establishes it.
There are several factors and circumstances that influence determining said pension:
- Agreements between spouses.
- Age and health status.
- Professional qualification or real possibilities of getting a job.
- Time dedicated to caring for the family.
- Collaboration time is provided for the productive and professional activities of the spouse.
- Duration of marriage or cohabitation.
- Loss of pension rights.
- Economic flow.
- Other various details of coexistence are relevant to consider.
The sentence will include the periodicity, payment method, update forms, duration, cessation, and guarantees of effectiveness.
A modification or termination of the payment of this pension may be requested in the following cases:
- A substantial modification in the fortune of the person who perceives it.
- Circumstances that allow payments to be completed, such as the cessation of the case, a new marriage, cohabitation with another person, or death.
The death of the debtor should not extinguish this pension , however, the heirs can request its reduction or elimination, in case the inheritance is insufficient or their legitimate rights are affected.
In the separation of assets, one of the spouses may be given the right to compensation for dedication to the home during the marriage. Work for the house is computed as a contribution to the charges, considered as a contribution in kind.
Usually, the obligation to participate in the household chores is carried out by both spouses contributing with their income, but that does not prevent one of them from also being responsible for providing their services to carry out household chores and take care of the children.
This contribution in kind is made by the person free of charge, without receiving any remuneration, but it is a contribution that generates compensation . It should be considered as a contribution to family responsibilities.
When is one entitled to compensatory compensation?
Domestic tasks must be shared and the responsibility for their execution lies with both spouses. The same thing happens with the care of children, their attention, responsibility for their school and extracurricular activities, and their health and recreation.
This personal dedication usually falls on one of the parties, although the common project of living together includes the burdens for both. Because the field of housework and responsibilities towards children is so broad, it must be assessed at the time of a divorce.
There is also another case in which that family member, in addition to his or her duties at home, also works or performs other tasks outside the home, whether full-time or part-time.
In this case, it is also appropriate to claim compensation because the person allocates their time to both actions. These types of issues will be considered to quantify the compensation made.
If one of the spouses works in a family business owned by the other spouse, compensation will surely be easier to achieve due to that dedication to the home and business of the other spouse and their family. When precarious situations arise at work, compensation would be even more possible.
Calculation of Compensatory Compensation
Both in this case, and in that of the pension, there is no scale that establishes specific limits, so the best option is to reach an agreement between the parties.
In the event that this agreement is not reached, the courts recognize that it is a complex process where there is also no unifying jurisprudence, due to the great margin that can exist between one case and another.
Generally, they are calculated keeping in mind:
- The Interprofessional Minimum Wage.
- The equalization of what a person who performs household chores and cares for the family would receive as a salary.
Differences and similarities between pension and compensatory compensation
The pension quantifies the imbalance of opportunities in one of the spouses, assessing their work opportunities and the time dedicated and to be dedicated to the family.
Therefore, compensation is contemplated in the assessment of the work for the house carried out by one of the spouses, valuing it as a contribution to supporting the family responsibilities.
In a legal analysis of the present and future imbalance, the compensatory pension is agreed upon regardless of the economic regime of that family.
For its part, compensation is agreed only in the property separation regime. It would not be provided for, for example, in the case of community property. And this is after analyzing the existing situation during the coexistence of the marriage and until the termination of the property separation regime, to determine the value of the contribution of work to the home and family.
In the compensatory pension, an analysis is carried out that assesses both the past and the future of the impact of the person’s contribution to the family and appreciates a possible economic imbalance.
That is why in compensation there is no future assessment of the family, nor is this imbalance taken into consideration, but rather based on past and present dedication until the extinction of the current economic separation regime.
Both compensations are compatible
It is often thought that because you have agreed to a pension in a divorce, you have no option to be compensated. But it must be understood that these two concepts are different and have a different nature as well.
If the requirements are present for each one, they are compatible and both can be perceived at the same time.
How to Change or End Compensatory Pension Payments?
To change or end compensatory pension payments, you must file a motion to modify the divorce judgment with evidence of a substantial change in circumstances, and get court approval.
Does the Death of the Debtor Nullify Compensatory Pension Payments?
Generally the obligation to pay compensatory pension payments as marital property division ends upon the death of the paying ex-spouse.
Is it possible to receive half of my husband’s pension in an Illinois divorce?
Yes, under Illinois law, non-employee ex-spouses are entitled to receive up to 50% of the marital portion of their former spouse’s work pensions as part of property division in divorce.