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Imputing Income To Determine Child Support Obligations

By Sarah Jacobs, Esq.

Morristown Divorce Attorneys Discuss Imputing Income in Child Support Proceedings

Serving Clients in Denville, Randolph, Hanover, Madison, Morristown, Tewksbury, and Morris County

Morristown Divorce Attorneys Discuss Imputing Income in Child Support ProceedingsImputing income or “attributing” income to one party can be a significant issue in divorce or the dissolution of a civil union, especially if there is a disparity in incomes and support is an issue (e.g., child support, alimony, spousal support). It is not uncommon during litigation for the earnings of one or both parties to change due to unemployment or changes within their company or working schedule (e.g., less hours, more hours, or simply changing jobs). In some cases parents may intentionally reduce their earnings, to avoid the responsibility of paying support or as a tactic to increase the amount of support they receive.

At Jacobs Berger, LLC  we have extensive experience helping parents across Denville, Randolph, Hanover, Madison, Morris County, and throughout New Jersey, to tenaciously pursue missing income and assets and obtain relief which may be vital to you and your child(ren)’s financial future.

Contact our firm today to discuss your specific needs and concerns regarding your child support in a confidential case assessment.

Reduction of Income to Effect Child Support Proceedings in Morris County NJ

Parents employing this type of strategy, which involves an intentional reduction in income or perceived reduction in income, often believe that they are improving their own position, therefore negatively impacting the co-parent. Unfortunately, it’s the child(ren) who may suffer or is the real victim of this negative behavior. Because New Jersey Family Courts looks at the best interests of the children, the court has the discretion to assign or “impute” income to parents who are not working full-time and/or to their full earning capacity (e.g., voluntarily underemployed or unemployed, or earning less than what they were previously earning to intentionally avoid child support payments). 

Child support awards are based on the income of both parties, and parents are legally equally responsible for the financial support of their children. Each parent’s income is a key factor in calculating how much child support is owed or received. New Jersey Child Support Guidelines, Rule 5:6A, allow the imputation of income to a parent, that is considered consistent with their earning capacity, ability and income earning opportunities. Rule 5:6A also considers potential income based on the parent’s work history, occupational qualifications, educational background, and prevailing job opportunities in the region, special licensing or certification, statistics from the New Jersey Department of Labor, and basic common sense.  If potential earnings are not able to be determined then income imputation may be based on the most recently recorded benefits or wages.

Determining the Reason for Unemployment or Underemployment in NJ

New Jersey Child Support Guidelines allows a court to impute income whether the court is making the first child support order in a case, or modifying an existing child support order. Before using their discretion to impute income, family courts want to know why the parent is unemployed or earning less than they could be. They may hold a hearing and receive evidence to decide whether the parent has a legitimate reason for reduced income such as their employer downsizing or going out of business. Another example is if the parent has a commission based job (e.g., at a dealership, insurance or real estate agency, securities or commodities and financial sales, telemarketing) but hasn’t been able to close any deals due to the economic climate. Or the parent was terminated and hasn’t found a new job despite consistent and diligent efforts.

The courts will also determine whether this parent has any assets available which could be used to pay child support. If the court finds that the parent’s unemployment or underemployment is justified, they may decide to impute little income or no income at all. 

What Can I Submit to Prove I Am Not Voluntarily Underemployed or Unemployed?

Be sure to keep copies of any termination notices or other documents proving that your job loss was involuntary. In the meantime, be proactive and be prepared to show you are engaged in finding suitable employment. Submitting cover letters seeking employment, and keeping track of appointments and interviews, and other related efforts or training that you participated in to find a job, could also prove your good faith efforts in court.

Challenges of Imputed Income As A Self-Employed Person in NJ

Due to cases such as Larbig v. Larbig (2006) self-employed persons may be more likely to have their income imputed because they are “in a better position to present an unrealistic picture of his or her actual income than a W-2 earner”.  Case law set by Donnelly v. Donnelly (2009, which cited Larbig v. Larbig), set forth a higher standard for a self-employed litigant versus a regular W-2 wage earner as it related to the modification of a support obligation. Donnelly, a self-employed attorney was denied a reduction to his alimony and child support obligations because the court determined his claim that his law firm’s fortunes plummeted was “unconvincing”.

Imputing the Income of Intentionally Underemployed Ex-Spouses in Madison 

If you believe your co-parent is acting in bad faith and is intentionally underemployed or voluntarily quit a job to reduce the amount of support, you should consult an attorney experienced in family law to see if it may be possible to provide supportive evidence in lines with the rules of evidence (i.e., that the other parent rejected a promotion, bonus or increased hours, or social media posts and emails wherein the person says they will take measures to avoid paying child support).

Contact Our Randolph Child Support Lawyers Today

Jacobs Berger, LLC has extensive experience helping parents across Denville, Randolph, Hanover, Madison, Morris County, and throughout New Jersey to successfully draft fair and reasonable child support settlements and reach constructive child support agreements of all kinds, including changed circumstance modifications and termination of child support obligations. Our attorneys also work to enforce support settlements when not adhered to.

With our unique approach we regularly work with financial planners to help our clients build successful foundations for their legal and parental futures, and ensure that their needs can be met, and addressed. Whether you are in the process of creating a child support agreement, or are in need of legal assistance during a child support proceeding, our attorneys are ready to begin working with you today.

Contact us online to schedule a confidential consultation with our family law team or call our Morristown, NJ office at (973) 710-4366.

Contact Our Morristown Attorneys Today

At Jacobs Berger, our attorneys are experienced in protecting our clients across Madison, Randolph, Tewksbury, Morristown, and the greater Morris County area in all family law-related issues.

To schedule a strategic planning session with one of our experienced team members regarding your particular case, please contact us online or through our Morristown, NJ office at (973) 354-4506.