Be Neutral
A Publication of the Georgia Office of Dispute Resolution

Case Watch: For Mediators
When Should Fringe Benefits Be Counted as Income?

The following case analyses are part of a regular series we publish to help neutrals broaden their knowledge of rulings of Georgia’s appellate courts that may affect your practice. Remember: mediators should not give legal advice or opinions

Review of Simmons v. Simmons, 288 Ga. 670, decided February 28, 2011, appeal to the Georgia Supreme Court of a ruling by Judge David Motes, Barrow County Superior Court.

Simmons offers mediators an excellent and detailed explanation of when employer benefits should be added to income, and how much life insurance the non-custodial parent should maintain for the benefit of the minor children.

Most custodial parents are aware of the perks of employment that their spouse has enjoyed. They believe that such perks constitute economic benefits that should translate into higher child support obligations for the non-custodial parent. What does the Georgia Supreme Court say in this regard?

1. Fringe Benefits: The question for the Simmons court was which, if any, fringe benefits should be included as gross income. The trial court found that in addition to his regular monthly gross income of $5,782.78, the husband received the following benefits:

-- $2,316.92 a month as his percentage of the profit of the Subchapter S corporation. The court arrived at this figure by calculating the average monthly income over the past three years.

-- $2,769.70 as total amount of fringe benefits, which were designated as: $1,200 company payment on loan for company-owned Dodge Ram truck used by the husband and coverage of vehicle expenses (gas, tag, insurance and repairs); cell phone for husband’s use; and company’s payment of company-issued credit card for items including meals and social activities.

The court found these “benefits” significantly reduced personal living expenses and were properly included in gross income. These increased husband’s monthly gross income from $5,782.78 to $10,869.40.

ERROR? On appeal, the husband alleged error by the trial court by relying upon the statute that states that employer-paid standard benefits such as health insurance premiums and contributions to retirement plans are not included in fringe benefits. The husband, however, could not show that the trial court included these standard benefits in his $10,869.40 monthly gross income. The trial court in fact separated the “benefits” from the “fringe benefits,” and thus the Supreme Court did not find any error.

Although Simmons clarifies that standard benefits such as health insurance premiums and retirement plan contributions should not be counted as gross income, the case also tells us that other benefits can be included. Depending on how much those other fringe benefits add up to, they would certainly be topics to be mediated.

2. Life Insurance: To calculate the amount of the life insurance a non-custodial parent must maintain, most mediators multiply the monthly child support amount by the years remaining to be paid to the minor children.

The Simmons trial court ordered the husband to maintain a policy in an amount of $150,000 in a trust with the wife as trustee. This amount exceeded the cumulative child support obligation of the father.

The statute that governs this provides: “In any case before the court involving child support, the court may include in the order of support provisions for life insurance on the life of either parent or the lives of both parents for the benefit of the minor child. The court may order either parent or both parents to obtain and maintain the life insurance.”

The Supreme Court ruled that the statute did not limit the value of any such insurance to the future child support obligation of the parent. The amount is within the trial court’s discretion, the Supreme Court said, and the trial court did not abuse its discretion. This gives mediators more leeway in helping parties determine an amount for the benefit of the children, regardless of the years and amount left to pay child support.

As to whether life insurance can be maintained in a trust, we know from earlier BE NEUTRAL articles that Henry v. Beacham, 301 Ga. App. 160 (2)(a), upheld a trial court’s requirement that a trust be created.

3. Deviation: A final issue that the husband appealed was that the trial court’s failure to consider the cost of the life insurance premiums as a deviation on his child support payments. The Supreme Court found that since the husband did not pay the premiums and his life insurance was a fringe benefit paid by his company, the trial court did not abuse its discretion by declining to consider a deviation.

All the issues raised by husband in this appeal were found to be without merit. The trial court’s judgment was affirmed, and all the Supreme Court justices concurred. It appears there was no gross error, and the all-encompassing “discretion of the trial court” prevailed yet again.


Mary Ellen Cates is an attorney and registered mediator in Avondale Estates, Ga.  She has practiced domestic law exclusively since 1985.  A divorce mediator since 1998, she is also a domestic arbitrator, and she has been appointed as special master for DeKalb County Superior Court.

Phone: 404-292-3803; fax: 404-292-1510; or