When judges determine how much alimony (sometimes known as “maintenance”) and/or child support a divorcing spouse must pay the other, an important consideration is each person’s income. Another factor is their “earning ability.”
For example, for child support, the law instructs judges to consider factors like the “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.”
If a person with the responsibility of paying support to their ex is accused of intentionally remaining unemployed or underemployed to lessen their payment obligations or avoid them completely, a judge may do what’s known as “income imputation.” That means considering the factors listed above and others, like the current job market, their age, health and their own standard of living to determine a fair payment amount.
When is income imputation used?
A judge can order someone to pay child support or alimony based on their “imputed income” (their earning potential) rather than their stated income. Income imputation may be done, as noted above, in cases where a person may be accused of being intentionally underemployed (taking a job that pays less money than they’re capable of earning or working only intermittently or part time) or even unemployed.
Income imputation may also occur if the payer does something like change careers or go back to school around the time of their divorce – resulting in a lowering of their income. Their imputed income may also be calculated if it’s suspected that they’re hiding assets. The whole purpose of determining a person’s imputed income or earning potential is to help ensure that the receiving party gets fair compensation based on what their former spouse or partner could realistically earn.
Both those on the paying and receiving end of a support order should understand how courts calculate what people are required to pay. Certainly, any support order may need to be modified if either party’s circumstances change. However, unless someone is in the retirement age zone, there can and should be questions if their declared income drops significantly. By seeking experienced legal guidance, New Jersey residents can more effectively protect their rights and financial well-being.