Child support and alimony payments are two of the main issues that couples must negotiate during separation and divorce proceedings. Support payments allow children and spouses to approach (if not meet) the pre-divorce lifestyle.  To determine such payments, lawyers and judges consider a number of factors, including wages, bonuses, dividends, and other sources of income.  Notions of fairness to children and spouses guide the reasoning.

What is imputed income?

In certain cases, a parent or ex-spouse may remain voluntarily unemployed or underemployed, significantly reducing the amount of income available for support payments or one’s own support. People may have many reasons for not working or failing to work enough, yet when a party does this “without good cause”, lawyers and judges will ignore actual income. Instead, they will impute or presume additional income to reflect the amount of money a party should be contributing to the support of self, children, estranged spouse, or ex-spouse.

This is not a one-way issue.  Dependent spouses and/or primary custodial parents who do not earn reasonable incomes are subject to challenge, and their alimony and child support payments are subject to measured reductions for that reason.

What are the criteria for imputing income?

The criteria for determining when income should be imputed include the following:

• A party’s employment status and expected earning capacity if the family had remained together;
• A party’s reason and intent for voluntary underemployment or unemployment;
• A party’s access to actual or imputed income from other assets that could be used to pay support;
• The ages of children in each parent’s household;
• Child-care  and alternatives to child-care.

Criteria that the court will not consider to determine imputed income include:

• A party’s gender; and
• Income of new spouse

To impute income to a parent who cares for young children, the court will deduct that parent’s share of child-care costs needed to facilitate work outside the home.

How do we establish imputed income?

To actually compute income, lawyers and judges base calculations on potential employment, earning capacity based on work history, educational background, occupational qualifications, and prevailing job opportunities in that region. A party’s former income at their usual or former occupation or the average earnings for that occupation as reported by the New Jersey Department of Labor (NJDOL) may also be used as baselines. If potential earnings cannot be ascertained, income may be imputed based on a party’s most recent wage or benefit record. As a last resort, income may be imputed based on full-time employment (40 hours) at the New Jersey minimum wage of $8.25 per hour.

For cases in which there is funding to do this analysis, the parties may hire a forensic employability expert, usually a psychologist, to conduct a full review of education, work history, and earnings history of the target party or parties (sometimes each party alleges the other’s willful underemployment).  The expert interviews each party and conducts independent marketplace and industry reviews.  The results are presented in the form of an expert report.  The expert is available for deposition and testimony at a trial or post-judgment plenary hearing.

Conclusion

A party’s chronic unemployment or willful underemployment is sometimes the biggest controversy between the parties.  Long-term obligations for child support, child care, college expenses, and alimony can run into the hundreds of thousands of dollars.

If you need legal information and advice about these issues, the law relating to them, and your individual case, you should contact family and divorce lawyers who are seasoned experts in these issues.

Our law firm will help you figure out whether you have a good claim, one that is worth pursuing, and will advise you on the best course of action to take.  Please write or call us today to begin that important conversation.