The South Carolina Court of Appeals reversed a permanent periodic alimony award in a March 2026 decision, ruling the wife had the education and earning capacity to support herself but failed to make a good-faith effort to do so. The same opinion upheld counting the husband's vested restricted stock units (RSUs) as income for child support, signaling tougher appellate scrutiny of underemployment and equity pay.
Key Facts
| Item | Detail |
|---|---|
| What happened | SC Court of Appeals reversed a permanent periodic alimony award and affirmed counting vested RSUs as income for child support |
| When | Decision reported March 30, 2026 |
| Where | South Carolina Court of Appeals |
| Who's affected | Divorcing spouses with earning capacity disputes and equity-based compensation (RSUs, stock options) |
| Key statutes | S.C. Code § 20-3-130 (alimony); S.C. Code § 63-17-10 (child support / income) |
| Impact | Underemployed spouses face higher proof burdens; RSUs are now clearly support-eligible income |
Why this ruling matters legally
This decision tightens two distinct areas of South Carolina family law at once: spousal support eligibility and the definition of income for support. According to South Carolina Lawyers Weekly, the appellate court found the family court erred in awarding permanent periodic alimony to a spouse who held the education and earning capacity to support herself yet had not made a good-faith effort to maximize her income.
The ruling reinforces that earning capacity, not just actual current earnings, drives alimony analysis in South Carolina. A spouse who is voluntarily underemployed cannot rely on a depressed income figure to justify permanent support. At the same time, by affirming that vested RSUs count as income, the court closed a gap that high earners had used to shield equity compensation from child support calculations. Both holdings push South Carolina toward a more income-realistic, capacity-based support framework.
How South Carolina law handles alimony and income
South Carolina's alimony statute, S.C. Code § 20-3-130, directs family courts to weigh thirteen factors when awarding spousal support, including each spouse's earning potential, education, employment history, and standard of living during the marriage. The statute expressly authorizes the court to consider earning capacity rather than only actual income, which is the hook this appeal relied on.
Permanent periodic alimony is the default form under § 20-3-130, but it is not automatic. Where a supported spouse can become self-supporting, courts increasingly favor rehabilitative alimony (time-limited support to allow retraining or re-entry into the workforce) over a lifetime award. The 2026 reversal underscores that distinction: lifetime support requires evidence the recipient genuinely cannot achieve self-sufficiency, not merely that she earns less than her former spouse.
For child support, S.C. Code § 63-17-10 and the South Carolina Child Support Guidelines define gross income broadly to capture nearly all sources of compensation. By treating vested RSUs as income, the Court of Appeals applied that broad definition to modern equity pay. South Carolina guidelines generally calculate support as a percentage of combined parental income, so adding RSU value to the paying parent's gross income directly increases the support obligation. The holding aligns South Carolina with states like California and New York that already treat vested equity as income.
Practical takeaways
-
Document your earning capacity early. If you are the supported spouse, gather evidence of job searches, applications, and labor-market conditions. After this ruling, South Carolina courts expect proof of a good-faith effort to maximize income before awarding permanent alimony under § 20-3-130.
-
Disclose and value all equity compensation. Vested RSUs, stock options, and similar grants must appear on your financial declaration. The Court of Appeals confirmed that vested RSUs count as income for child support under § 63-17-10, so omitting them invites reversal or a contempt finding.
-
Reassess whether rehabilitative alimony fits better. If the recipient can realistically return to work, propose rehabilitative or term-limited support rather than permanent periodic alimony. This decision shows appellate courts will scrutinize lifetime awards where self-sufficiency is achievable.
-
Get a vesting schedule for any stock awards. The timing of when RSUs vest affects what counts as income in a given year. Request the grant agreement and vesting calendar during discovery so support can be calculated accurately.
-
Expect appeals on both issues. Because this opinion sharpens two contested doctrines, parties on either side now have clearer appellate footing to challenge support rulings that ignore earning capacity or omit equity income.
Frequently asked questions
FAQs
Does South Carolina count RSUs as income for child support?
Yes. In a March 2026 decision, the South Carolina Court of Appeals affirmed that vested restricted stock units count as income for child support under S.C. Code § 63-17-10. South Carolina defines gross income broadly, so vested equity compensation is included in the support calculation.
Can a South Carolina court deny permanent alimony if a spouse is underemployed?
Yes. Under S.C. Code § 20-3-130, courts assess earning capacity, not just actual earnings. The 2026 Court of Appeals reversal denied permanent periodic alimony where the spouse had the education and ability to support herself but failed to make a good-faith effort to maximize income.
What is the difference between permanent and rehabilitative alimony in South Carolina?
Permanent periodic alimony continues indefinitely until remarriage, cohabitation, or death, while rehabilitative alimony is time-limited support that helps a spouse retrain or re-enter the workforce. South Carolina's § 20-3-130 authorizes both, and the 2026 ruling favors rehabilitative support where self-sufficiency is achievable.
How does this ruling affect high earners with stock compensation in South Carolina?
High earners can no longer shield vested RSUs from child support. The Court of Appeals confirmed in 2026 that vested RSUs count as income under S.C. Code § 63-17-10, increasing support obligations for parents who receive equity-based pay rather than only cash salary.
Will this decision change existing South Carolina support orders?
Not automatically. Existing orders remain in effect unless a party files for modification and proves a substantial change in circumstances. However, this 2026 ruling gives parties stronger grounds to seek modification where earning capacity was ignored or equity compensation like vested RSUs was omitted from the original calculation.
A note before you go
If you are facing a South Carolina divorce involving spousal support or equity compensation, this ruling makes early, well-documented financial preparation more important than ever. A local family law attorney can help you assess earning capacity arguments and properly value RSUs or stock options before a support figure is set.
This article discusses recent news and provides general legal commentary. It does not constitute legal advice. Every case is unique. Consult a qualified family law attorney for advice specific to your situation.