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Imputed Income in Family Court

Posted by Matt Rooney | Oct 24, 2013 | 0 Comments

New Jersey Family Courts May Impute Income When Setting Child or Spousal Support

Determining the appropriate child or spousal support obligation is often straightforward but can be very complicated, too. A number of factors could influence the ultimate amount. At the top of that list is the income of the respective parties. But what happens when one or both parties' income is not a fair or accurate representation of their earning capacity? Unemployment, retirement, underemployment, or even incarceration could give rise to this dilemma. In those situations, a New Jersey Family Court may decide to impute income rather than simply use the parties' actual income. A recent unpublished (and therefore non-binding) decision from the New Jersey Appellate Division in Barnes v. Barnes provides a clear yet concise explanation in the alimony context: “A trial judge has the discretion to impute income, but only after first finding that a party is voluntarily unemployed or underemployed. Caplan v. Caplan, 182 N.J. 250, 268 (2005); Golian v. Golian, 344 N.J. Super. 337, 341 (App. Div. 2001); Dorfman v. Dorfman, 315 N.J. Super. 511, 516 (App. Div. 1998). 4 A-5834-11T1 In fact, “[s]uch a finding is requisite, before considering imputation of income.” Dorfman, supra, 315 N.J. Super. at 516. Here, the judge determined that defendant was unemployed voluntarily, and conducted the difficult task of identifying an amount of income to impute to defendant.” We've discussed voluntary vs. involuntary unemployment at-length before here at the blog. At the end of the day, the final imputation amount is at the Court's discretion if a family judge believes that the subject party's unemployment or underemployment is indeed voluntary. In the Barnes case,  the plaintiff had moved to reduce his alimony obligation. The defendant received social security disability benefits of $1893 per month. The trial judge nevertheless concluded that the defendant was not precluded from earning income; that judge proceeded to evaluate all of the relevant factors including earning capacity and financial resources before imputing $15,600 in annual income, totaling $1300 per month, to the defendant. The end result of this imputation was a $30 per week reduction of plaintiff's alimony obligation. The Appellate division affirmed the trial court's determination having found no abuse of discretion. $30 per week, or $1,560 per year, is clearly serious money for the average middle class American. Hence, if you're in a position where you are receiving or paying child support or spousal support, it is extremely important to make sure that the support obligation is being calculated by the Court utilizing the correct income level for both parties. At DeMichele and DeMichele, we assist hundreds of clients in seeking modifications of their child support and/or alimony obligations; we also represent clients who are trying to maintain their support when the payor files a motion to reduce their obligations. Properly evaluating how the state of the law impacts your particular employment circumstances is critically important. Our attorneys will therefore work with you to not only make the right legal arguments but also help you put together a narrative that unambiguously articulate to the judge why your situation warrants a lower support obligation or, alternatively, if the other party's income warrants a higher imputation due to underemployment. Experienced help is a quick phone call or email away. If you have any questions regarding how your job loss may affect your support obligations, or have any other general questions regarding divorce, child support or spousal support, please contact us online today or call (856) 546-1350 for a confidential consultation with one of our skilled family court lawyers.

About the Author

Matt Rooney

Practice Areas: Family Law (including Divorce, Alimony, Child Support, and Domestic Violence); Municipal Court; Personal Injury; Residential Real Estate; Civil Litigation; Collections.

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