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Imputing Income for Support & Alimony

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One of the most difficult things in a divorce is the calculation of child support and alimony. Most of the time, a judge will look at the actual income of the husband and wife to decide the amounts to be paid. But the calculation becomes more difficult when one or both is voluntarily unemployed or underemployed, meaning not working at full capacity. In these situations, a Court will impute income to that person based on how much it feels he or she should be earning.

The Rules of Court say that a judge should look to "the parent's work history, occupational qualifications, educational background, and prevailing job opportunities in the region" in calculating the earning capacity of the voluntarily unemployed or underemployed parent. The court may also impute the parent's income based on the parent's "usual or former occupation or the average earnings for that occupation."

A recent case called Elrom v. Elrom deals with imputation of income when one parent has accepted a job that pays much less than previous jobs he or she has held. In Elrom, the Appellate Court upheld a trial court's decision to impute income to a father even though he was working full-time. He accepted a job paying $120,000 shortly before the start of the divorce trial. But the judge received evidence that he earned between $200,000 and $300,000 in the three years before he accepted the new position. The judge said that even though the father was working at a full-time job, he was still underemployed, because the evidence showed that he could, and was, earning much more, and he had no valid explanation for it. So the court imputed the father's income according to his potential earnings instead of his actual income.

On the other hand, the judge imputed the wife's income at her most recent part-time salary of roughly $80,000 per year, despite the fact that she earned over $175,000 at her last full time job, 4 years prior to the trial. The court accepted this lower imputation because the wife was only able to work part-time, so she could care for the couple's children. Because she had to care for the children, the wife/mother's income could be set at the lower level. Her decision to accept a lower paying position was reasonable in light of the "paramount" interests of caring for the children.

The Elrom decision shows that parents cannot escape paying higher child support or alimony payments by accepting a lower paying position, or one with fewer hours. Courts will not hesitate to impute income according to earning capacity in order to "compel ... what in equity and good conscience should be done ...," as a judge sees fit. With the collaboration of Connor Turpan, Rutgers School of Law Newark candidate for a JD degree in May 2016 and Associate Editor on the Rutgers Computer and Technology Law Journal.

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