In North Carolina, we see cases where one spouse is primarily a breadwinner for the family, often bringing in most if not all of the income. In those case, the other spouse is the homemaker, the one that cares for the children and/or pets and maintains the home. And when it comes to separation and divorce, dollar values become important. So how do you value a homemaker spouse’s contribution to the marriage?
Recently in China, a new civil code allowed a judge to award a spouse roughly $7,700 for five years of housework and childcaring (rather paltry when considering the market value of those activities), on top of monthly alimony. The new code allowed a spouse to be seek direct compensation for his/her childcare, housekeeping, and other unpaid contributions during marriage. What is unknown is how they arrived at that number. This may sound like an odd law, but our legal system also does not neglect the unpaid, unvalued work that homemaker spouses do.
Our statutes in the divorce and alimony chapters take into consideration the contributions of a spouse as homemaker. Under the law, a judge must consider contributions by one spouse to the education/training of the other spouse that may have led to his/her increased earning potential. Those factors are also at play when the judge is required to consider the relative earning capacity of each spouse. For instance, if you took care of the children and home while your spouse was earning a higher degree, the court must consider that when making awards for alimony and consider how a degree might have affected your spouse’s earning capacity versus yours. In other words, your contribution to allow your spouse to go to school should not be ignored by the court. However, there is still the question of determining the value of such unpaid work.
Quantifying the value of unpaid work in furtherance of marital goals can be complex. The obvious route is to look at a fair market value to calculate what the work was worth if outsourced. But that fails because marriage is a special kind of partnership to which market rules cannot be applied. This explains the adage “Never go into business with friends and family.” It is because you do not offer them the same rates you would for a typical client.
Other methods create hypotheticals to delve into what the homemaker spouse would be doing otherwise, if not for the homemaker role. This opportunity cost approach only works if there is evidence to show the lost wages. (For instance, if the homemaker spouse could have taken a job at a salary but declined in order to care for children.) There are further methods, but no matter which one is chosen the court needs to consider a homemaker’s contribution. Note that homemaker contributions are also considered in equitable distribution and may result in a one-time distributive award.