Sunday, May 23, 2010

Is Per Diem Properly Included in Income for Purposes of Calculating Florida Child Support?

As a Tampa family law attorney, I handle a large number of military divorces.  These cases present a number of unique issues.  One of the issues that often arises is how to account for military allowances and benefits from a family law perspective.  Service members frequently do not understand that, for purposes of calculating child support, income is defined much more broadly than taxable income under the Internal Revenue Code.  As any military divorce attorney will tell you, clients in the armed forces are often disappointed to learn that, while certain compensation is left off the tax return, those benefits are usually income under the Florida child support guidelines.

Not all payments and benefits received, however, constitute income.  Many military service members and civilian employees receive an allowance for travel and other expenses.  This pay is commonly referred to as a per diem allowance.  Per diem is a Latin term, which literally means "per day."  The term most often refers to the amount of money the company, government, or other organization will pay each day to cover living and travel expenses incurred in connection with work.

One of our recent military divorce clients involved a reservist that planned to spend an entire year on a security detail in the Middle East.  As part of the contract, the client was scheduled to receive a per diem for certain expenses.  An obvious issue in the client's divorce was whether the per diem would be included in income for purposes of calculating the client's Florida child support obligation.

Pursuant to section 61.30(2)(a)(13), Florida Statutes, reimbursed expenses, including per diem allowances, may be included in income for purposes of calculating child support.  These payments, however, are only included to the extent that the payment reduces the recipient's living expenses.

Very few appellate decisions help family law attorneys interpret this standard.  Florida's Fourth District Court of Appeal provided some insight in Lauro v. Lauro, 757 So. 2d 523 (Fla. 4th DCA 2000), the husband testified that the per diem he received was insufficient to cover the actual expenses he incurred when he was away from home on business.

The wife could present no evidence to the contrary but argued that, if the husband is paid per diem to cover his meals away from home, he does not have to buy groceries for dinner at home.  The court rejected her argument for two reasons.  First, the per diem at issue was a flat rate per day which did not necessarily cover the actual expenses incurred by the husband.  Second, even if the husband were reimbursed for the exact amount he spent on a meal away from home, any reduction in his living expenses at home because he did not have to buy groceries was de minimus.  Trial judges should not be reduced to having to decide how much a spouse, who was reimbursed for a meal while traveling, would have spent on a can of soup or a frozen dinner at home.

Based on this reasoning, we can expect the best divorce attorneys to argue that a per diem will not be included in income for purposes of calculating child support unless the allowance exceeds the actual expense or eliminates a material expense, such as housing, that otherwise would have been incurred.