How is alimony determined?
Alimony, as opposed to child support calculated pursuant to the Guidelines, is not as definitive and is based on a number of statutory factors. In N.J.S.A. 2A:34-23(b), New Jersey’s alimony Statute provides: In all actions brought far divorce, divorce from bed and board, or nullity the, court may award one or more of the following types of alimony: permanent alimony; rehabilitative alimony; limited duration alimony or reimbursement alimony to either party.
In doing so, the court shall consider, but not be limited to, the following factors: The actual need and ability of the parties to pay. The duration of the marriage or civil union. The age and physical and emotional health of the parties. The standard of living established in the marriage or civil union and the likelihood that each party can maintain a reasonably comparable standard of living. The earning capacities, educational levels, vocational skills, and employability of the parties. The length of absence from the job market of the party seeking maintenance. The parental responsibilities for the children. The time and expense necessary to acquire sufficient education or training to enable the party seeking maintenance to find appropriate employment, the availability of the training and employment, and the opportunity for future acquisition of capital assets and income. The history of the financial or non-financial contributions to the marriage or civil union by each party including contributions to the care and education of the children and interruption of personal careers or educational opportunities. The equitable distribution of property ordered and any pay-outs on equitable distribution, directly or indirectly, out of current income, to the extent this consideration is reasonable, just and fair. The income available to either party through investment of any assets held by that party. The tax treatment and consequences to both parties of any alimony award including the designation of all or a portion of the payment as a non-taxable payment.
Any other factors which the Court may deem relevant. The New Jersey Supreme Court in Crews v. Crews, 164 N.J. 11, 26 (2000), held that “[a]n alimony award that lacks consideration of the factors set forth in N.J.S.A. 2A:34-23(b) is inadequate, and one finding that must be made, is the standard of living established in the marriage or civil union.” The Court found that “[i]n all divorce proceedings, trial courts must “consider and make specific findings’ under N.J.S.A. 2A:34-23(b)” Id. at 25.
The Appellate Division in Boardman v. Boardman, 314 N.J. Super. 340 (1998) reiterated the application of the principles for determining alimony as set forth in N.J.S.A. 2A:34-23, noting that the principles apply whether the spouse seeking alimony is the husband or wife.
The alimony statute in New Jersey was recently amended so that the court is now permitted to award not only permanent or rehabilitative alimony but also limited duration alimony and reimbursement alimony.
There are no fixed “guidelines” as there are with regard to child support. However, based upon computations done by many experienced divorce attorneys on the heals of findings in contested alimony cases ending in trial, it is obvious that many judges are using mathematical formulas to determine spousal support, despite case law mandating that mathematical formulae not be used.
Attorneys sitting as Early Settlement Program Panelists often use the formulae they believe the Judges in their County to be using in making their spousal support recommendations.
Ideally, the way to begin calculating alimony – apart from considering the factors contained in the statute – is to scrutinize the budgetary requirements associated with running two separate households, compared with the income generating ability of each of the divorced parties. This takes some thought and time.
Tax consequences should also be calculated in. But, it can’t be emphasized enough that ALL the statutory factors must be considered in the determining whether there is an alimony entitlement, what type or types of alimony will be involved, and what level of payment might reasonably be agreed to or awarded.
Failing to settle the issue of alimony is one of the major reasons cases are forced into trial. It is crucial – in any case where alimony may be in issue – that both parties retain experienced divorce attorneys to represent them. In most cases involving average circumstances, mature and well-read matrimonial attorneys should be able to develop a settlement range for alimony in rather short order.
Failing to settle a case – for instance – because one side feels there is some entitlement to alimony and the other side maintains there is not, is nothing short of idiotic in most circumstances. Experienced divorce attorneys can usually distinguish an alimony case from a non-alimony case quite quickly.
Are alimony and child support taxable?
Alimony is taxable to the recipient and deductible for the payor, unless the support Order states otherwise. The payment of child support has no tax effect. In most matrimonial cases involving minor children, where the spouses earn unequal incomes, both alimony and child support are likely to be ordered.
Is there any way of structuring support payments to optimize tax consequences?
Definitely. While the amount of tax-free child support, in most cases, is calculated by using the Guidelines, alimony is not. Alimony is typically a negotiable issue.
If the payor spouse is in a significantly higher tax bracket than the receiving spouse, the alimony portion of any support payment will be of significant benefit to the payor spouse and to the recipient spouse, inasmuch as the recipient spouse would be taxed at a much lower rate.
Optimizing the tax consequences of support is one way to improve overall post-divorce divided family finances, which is often neglected. The manner in which dependency deductions are taken, use of the Head of Household filing status, the right mix of alimony versus child support payments are all considerations to take into account to maximize tax savings.
Both parties should agree to do this with the assistance of a tax accountant, because cash maximization opportunities could be quite substantial.
Can I receive child support or alimony before I am divorced?
Yes. In fact, one does not even need to file a Divorce Complaint in order to obtain support. Instead, a Complaint can be filed for “Separate Maintenance.”
Even in a divorce context, while the divorce is pending, support can be awarded by the filing of a what is referred to as a Pendente Lite Motion. As it’s Latin name suggests, it is used to establish continuing arrangements pending litigation. After such a motion is filed, a determination will be made by the Court as to how much support, alimony or housing, transportation and personal expenses should be paid pending a final determination of all issues. Other relief can be requested as well.
NJ Child Support
How is Child Support calculated?
Child support is based on Child Support Guidelines in New Jersey. Generally speaking, it is determined by taking the income of each of the parties, along with a number of other factors, and then using various formulae as established by a committee of the New Jersey Supreme Court.
Besides including the income of the parties, the amount of time that each party spends with their children is also a factor so that, in some sense, the more time that a parent spends with the children, the lower his or her child support obligation will be.
There are also several other factors that go into the equation, including the requirement to pay child care. The only way to make an accurate determination as to how much the child support obligation will be is to have all the necessary information available, and then utilize the guidelines step-by-step, in order to find the definitive amount.
What are the Child Support Guidelines?
The court has adopted guidelines, which are intended to provide guidance about what it actually costs to raise children. The Guidelines fix a range of support that should be paid by both parents, proportionate to their available incomes. There is a rebuttable presumption that the Guidelines are correct, providing, for example, that the children have not reached 18, are not away at college, and provided further that the combined net weekly income of the parents does not exceed $2,900; $150,800 combined net annual available income per year (after subtracting out tax, social security, and other allowable deductions from gross income). However, child support amounts may be negotiated above or even below those in the Guidelines amounts – provided just cause can be shown for going below them. The judge may modify the levels in the Guidelines if a finding can be made that – due to the circumstances of a particular family, the Guidelines amount would be unjust or otherwise inappropriate. As alluded to earlier, the court may deviate from the Guidelines if the combined net income of both parties is more than $2,900 per week. The costs of work related child care and the marginal cost of providing health insurance for any child, is also factored into the child support calculations.
What if the Child Support Guidelines are Inappropriate for My Case?
If the family’s combined weekly net income is greater than $3,600 per week “or for any of the other reasons enumerated in Appendix IX-A of the Rules of Court, which sets forth Considerations in the Use of Child Support Guidelines” Judges are to determine child support by using the criteria contained in the appropriate statute. This should be done in much the same way as the Judges are required to determine alimony, child custody, equitable distribution, etc.
Pursuant to Zazzo v. Zazzo, 245 N.J. Super. 124, 129 (App. Div. 1990):
The Legislature has dictated that certain factors must be considered in setting support. These factors reinforce the distinction between spousal support and child support in cases not covered by court rule. N.J.S.A. 2A:34-23 provides:
a. In determining the amount to be paid by parent for support of the child and the period during which the duty of support is owed, the court in those cases not governed by court rule shall consider, but not be limited to, the following factors:
- Needs of the child;
- Standard of living and economic circumstances of each parent;
- All sources of income and assets of each parent;
- Earning ability of each parent, including educational background, training, employment skills, work experience, custodial responsibility for children, including the cost of providing child care and the length of time and cost of each parent to obtain training or experience for appropriate employment;
- Need and capacity of the child for education, including higher education;
- Age and health of the child and each parent;
- Income, assets and earning ability of the child;
- Responsibility of the parents for the court-ordered support of others;
- Reasonable debts and liabilities of each child and parent; and
- any other factors the court may deem relevant.
In Pascale v. Pascale, 140 N.J. 583 (1985) the Supreme Court found that it is within a court’s discretion to consider the child support guidelines and the statutory criteria when determining a child support award that is in the child’s best interests.”
How long must I pay or can I receive child support?
Child support concludes upon the emancipation of the child or children.
What this actually means is that child support discontinues when the child is expected to be self supporting. There is no fixed time for emancipation, however. The issue is a question of fact. In general, however, emancipation may occur upon a child reaching majority, upon the child’s graduation from secondary education, upon the child’s entry into the armed forces, upon the child’s marriage or civil union, upon the child’s graduation from post secondary or even graduate school, or at any other time that the Court believes the child is expected to be self-supporting.