As a divorce attorney, when finances and support are at stake, I have seen many folks go to great lengths to reduce or even eliminate their income, especially in this economy. Often times people have the misconceived notion that if they reduce or completely eliminate their income during the New Jersey divorce process they will not be required to pay as much support to their spouse as they would if they were still employed. This is a huge mistake and one that could be very damaging to a divorce case.
Imagine, you purposely lose your job or take a much lower paying job in order to pay your spouse less support. Or perhaps your spouse has already done this and you are worried you will not get enough support. Now imagine the Judge makes believe that party still earns a higher salary and they are forced to pay the larger sum of support on a reduced income. Sound unfair? It might be, but that is the reality one faces if they purposely reduce their income during the divorce.
In a divorce where one party voluntarily reduces their income, or even when the loss of income is involuntary the Court has the authority to impute income to that party. Meaning the Court may say, “Since you made $50,000 two months ago, you have the capability and potential to earn $50,000 now. Thus, we will calculate support on $50,000”.
The New Jersey Family Court may also impute income if they feel a party is underemployed. For example, if a doctor decides to quit his job and start working as a volunteer at an animal shelter, the Court may very well impute his previous salary when calculating support.
Imputation of income does not just have to do with alimony, but primarily with child support. This is one of the main reasons income is imputed. Parents have an obligation to support their children and the Courts want to make sure that the same is done to the best of their ability. Therefore, Rule 5:6A give the Court full authority to impute income to a party.
There are various things a Court may look at when deciding to impute income. Some of these are as follows:
1. Education of the party;
2. Assets of the party;
3. Past employment history;
4. Qualifications of the party;
5. Prior income;
6. Efforts to find commensurate employment;
7. Reason for the reduction or loss of income; and 8. Statistics from the New Jersey Department of Labor.
If the parties are unable to agree an appropriate figure of income, the Court may order the services of an employability expert in order to ascertain how much the party should be earning. This can be costly and time consuming.
If you are let go from your job, and the same happened involuntarily, my best advice would be to get proof that you did not just quit. This will show the Judge that you did not act in bad faith and that you are not just trying to get out of your support obligation. In addition, make sure you keep proof of your job searches and have a record of everywhere you applied. The Court may very well ask to see your efforts to find employment and this will should the Court that you are doing everything in your power to find to meet your financial obligations.
If your income has recently been lowered or your spouse’s income has been lowered, and you face any of the issues mentioned above, please call our New Jersey Divorce Law Firm to discuss how we can help.
Thank you to Elizabeth Rozin-Golinder, Esq., an associate New Jersey divorce lawyer at the Law Offices of Edward R. Weinstein for her invaluable assistance with this blog.