In order to impute income, the court must make a finding that the party is voluntarily underemployed without just cause. Dorfman v. Dorfman, 315 N.J. Super. 511, 516 (App. Div. 1998). The party must be “intentionally failing to earn that which he or she is capable of earning.” Ibid. The imputation of income is discretionary and requires the judge to “realistically appraise” the party’s job prospects and earning capacity. Storey v. Storey, 373 N.J. Super. 464, 474 (App. Div. 2004).

See related Blog Post, published in the New Jersey Family Law blog.

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In order to impute income, the court must make a finding that the party is voluntarily underemployed without just cause originally appeared on NJ Family Issues on November 5, 2009.

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A trial judge establishing a spousal support obligation must consider the thirteen factors enumerated in N.J.S.A. 2A:34-23(b). See Crews v. Crews, 164 N.J. 11, 26 (2000) (“An alimony award that lacks consideration of the [factors set forth in N.J.S.A. 2A:34-23(b)] is inadequate . . . .”).

“A trial judge’s decision to impute income of a specified amount will not be overturned unless the underlying findings are inconsistent with or unsupported by competent evidence.” Storey v. Storey, 373 N.J. Super. 464, 474-75 (App. Div. 2004).

Generally, “[a] supporting spouse’s potential to generate income is a significant factor to consider when determining his or her ability to pay alimony.” Miller v. Miller, 160 N.J. 408, 420 (1999). A party may not deliberately remain underemployed to evade his or her support obligations, and a trial judge has the discretion to impute a higher income to an individual if it finds that the party is intentionally earning less than he or she is capable of. Golian v. Golian, 344 N.J. Super. 337, 341 (App. Div. 2001). However, the court has recognized that there are no bright-line rules which govern the imputation of income. Storey, supra, 373 N.J. Super. at 474. See also Caplan v. Caplan, 182 N.J. 250, 270 (2005) (discussing factors a court should consider in imputing income for the purpose of calculating child support).

For instance, in Storey, supra, 373 N.J. Super. at 468, an obligor spouse appealed a trial judge’s order denying his postjudgment application to reduce his alimony obligation based on his diminished earnings. We held that a trial judge must first assess whether the “obligor’s decision [to earn less] is ‘reasonable’ under the circumstances,” and that this assessment of reasonableness requires the consideration of many factors, such as the availability of work and parental responsibility for children. Id. at 469-71 (quoting Deegan v. Deegan, 254 N.J. Super. 350, 357 (App. Div. 1992)).

Parental responsibility is a relevant factor in determining whether a supporting spouse with diminished earnings has acted reasonably. Storey, supra, 373 N.J. Super. at 470-71. This factor is also specifically enumerated in N.J.S.A. 2A:34-23(b)(7).

A trial judge has the discretion to impute income, but only after he has first found that a party is voluntarily unemployed or underemployed. Caplan, supra, 182 N.J. at 268; Golian, supra, 344 N.J. Super. at 341; Dorfman v. Dorfman, 315 N.J. Super. 511, 516 (App. Div. 1998). In fact, “[s]uch a finding is requisite, before considering imputation of income.” Dorfman, supra, 315 N.J. Super. at 516.

See related Blog Post, published in the New Jersey Family Law blog.

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Parental responsibility is a relevant factor in determining whether a supporting spouse with diminished earnings has acted reasonably originally appeared on NJ Family Issues on August 3, 2009.

When calculating child support payments, the court may impute income to a parent whose income cannot be determined. Tash v. Tash, 353 N.J. Super. 94, 99 (App. Div. 2002). Further, the court may impute income to a parent where the parent has voluntarily become underemployed or unemployed without just cause. Caplan v. Caplan, 182 N.J. 250, 268 (2005). When determining whether to impute income, the court must consider four factors: (1) “the employment status and earning capacity of the parent . . . if the family had remained intact;” (2) “the reason and intent for the voluntary underemployment or unemployment;” (3) “the availability of other assets that may be used to pay support;” and (4) “the ages of any children in the parent’s household and child-care alternatives.” Child Support Guidelines, Pressler, Current N.J. Court Rules, Appendix IX-A(12) to R. 5:6A at 2293 (2008).

The guidelines regarding imputation of income require that the court consider “the reason and intent for the voluntary underemployment or unemployment.” Pressler, supra, Appendix IX-A(12) at 2293.

When a person comes to the United States for an extended visit with his family, and his marriage breaks up during that stay, the court cannot impute to him income that would effectively require him to remain in the United States and give up his native land in order to meet child support obligations set in accordance with American standards.

The guidelines provide that when determining whether or not to impute income, the court should consider “what the employment status and earning capacity of [the payor] parent would have been if the family had remained intact.” Pressler, supra, Appendix IX-A(12) at 2293. In this case, since the parties were in the United States only on visitor visas, the court must presume that had the family remained intact it would have returned to Egypt, as it did after an earlier visit. Hence, only the wages defendant may earn in Egypt are relevant when determining his support obligations. Accordingly, the court found no basis to impute to defendant income based on New Jersey wages, since he is not voluntarily underemployed by virtue of leaving this State and returning to Egypt.

The imputation of income must be “based on a realistic assessment of capacity to earn.” Storey v. Storey, supra, 373 N.J. Super. at 474. Indeed, the underpinnings for a support award is the obligor’s ability to pay. Dorfman v. Dorfman, 315 N.J. Super. 511, 516 (App. Div. 1998). When income is imputed to an obligor, the foundation of the award is the obligor’s ability to pay that amount. See ibid.

The Child Support Guidelines do allow the court to impute income based on New Jersey wages in certain situations. See Pressler, supra, Appendix IX-A(12) at 2292-93. However, Rule 5:6A allows the court to modify or disregard the guidelines “where good cause is shown.” “Good cause” includes “other relevant factors which may make the guidelines inapplicable or subject to modification” or “the fact that injustice would result from the application of the guidelines.” R. 5:6A. Imputing income based on New Jersey wage levels would be unjust and futile in the circumstances of this case, where the supporting parent is unable to work in New Jersey due to no fault on his part and is located in a foreign country where his earnings will be dramatically less than the amount he could earn here.

NOTE: My legal and mediation services are offered to clients in Union, Middlesex, Somerset, Essex, Hudson, Bergen, and Morris counties in NJ.

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When a person comes to the United States for an extended visit with his family, and his marriage breaks up during that stay, the court cannot impute to him income that would effectively require him to remain in the United States and give up his native land in order to meet child support obligations set in accordance with American standards originally appeared on NJ Family Issues on August 19, 2008.

When establishing child support, a trial court should apply the Child Support Guidelines, Pressler, Current N.J. Court Rules, Appendix IX-A to R. 5:6A at 2217 (2007). The trial court may only modify or disregard the guidelines if good cause is established for doing so. R. 5:6A. An important aspect of establishing appropriate child support is determining the parent’s net income. Child Support Guidelines, Pressler, Current N.J. Court Rules, Appendix IX-A to R. 5:6A at 2226 (2007).

The Supreme Court has held that “when a parent, without just cause, is voluntarily unemployed or underemployed, income may be imputed to that parent to provide for the child’s needs.” Caplan v. Caplan, 182 N.J. 250, 268 (2005). To determine whether it should impute income to an unemployed or underemployed parent, the trial court should consider: (1) what the employment status and earning capacity of that parent would have been if the family had remained intact or would have formed, (2) the reason and intent for the voluntary underemployment or unemployment, (3) the availability of other assets that may be used to pay support, and (4) the ages of any children in the parent’s household and child-care alternatives. [Child Support Guidelines, Pressler, Current N.J. Court Rules, Appendix 1X-A to R. 5:6A at 2227.]

The guidelines further specify that “[t]he determination of imputed income shall not be based on the gender or custodial position of the parent.” Ibid. In addition, “[w]hen imputing income to a parent who is caring for young children, the parent’s income share of child-care costs necessary to allow that person to work outside the home shall be deducted from the imputed income.” Ibid. After determining the income of each parent, the trial court must use the guidelines worksheet to calculate the exact amount of the child support order. Id. at 2280.

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When imputing income to a parent who is caring for young children, the parent’s income share of child-care costs necessary to allow that person to work outside the home shall be deducted from the imputed income originally appeared on NJ Family Issues on April 5, 2007.