Imputing Income in NJ: What You Need to Know

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When it comes to earnings, not everything is black and white. Depending on the circumstances, imputing income may be necessary. It gives the court numbers to work with regarding the calculation of child support or alimony.

First and foremost, you need to understand the concept and significance of imputed income. In your case, you may have tax forms or pay stubs documenting your earnings. However, what happens if your spouse doesn’t work? Whether he or she is on disability or unemployed for some other reason, the court calculates and assigns a number to use in determining support payments.

Factors Used in Imputing Income

According to the Appendix to the New Jersey State Child Support Guidelines, income imputation also comes into play when a spouse is voluntarily underemployed. The factors used to impute income include determining potential and earning capacity by reviewing the following:

  • Parent's work history, occupational qualifications, educational background, and prevailing job opportunities in the region.
  • Parent's former income at that person's usual or former occupation or the average earnings for that occupation as reported by the New Jersey Department of Labor (NJDOL).
  • If potential earnings cannot be determined, impute income will be based on the parent's most recent wage or benefit record (a minimum of two calendar quarters) on file with the NJDOL
  • If a NJDOL wage or benefit record is not available, impute income will be based on the full-time employment (40 hours) at the prevailing New Jersey minimum wage.

This begins the calculations. The court also takes into account whether the employment status would be different if the couple had remained together. However, there’s more.

NJSA 2A:34-23 is known as New Jersey’s alimony statute. It also states that any income available through the investment of assets may be utilized in determining imputed income.

Income imputation is discretionary and may be a subject of contention during support hearings. In fact, it was one of the issues in a recent decision by the New Jersey Appellate Division.

Disputing the Results

In the New Jersey Appellate Division’s May 3, 2018 unpublished decision of D.A.L. v. W.J.L, the court affirmed the ruling made by the Family Court.  Notably, since the Appellate Division’s opinion is unpublished, it only applies to the named parties. Additionally, initials of the parties are used to keep their identities private.

D.A.L. and W.J.L. married in 2002 and have two children together. They divorced in 2016, although there were concerns about the final divorce order and a ruling after its entry. One of the issues was D.A.L.’s concerns about the income imputation used for her former husband.

At the time of the divorce, D.A.L. was an engineer, earning $129,000 annually. W.J.L. is described as a carpenter who owned his own business from 1996 until 2002.  When he contracted Lyme’s Disease in 2002, W.J.L. became extremely ill. Ultimately, he was awarded total disability benefits by the Social Security Administration.

W.J.L. receives $1250 per month in disability benefits.  Additionally, D.A.L. is the recipient of $320 per month per child from Social Security.  Despite the presumption that W.J.L. was physically unable to work, the court imputed his income. It was set at $45,590, the then prevailing wage for carpenters.

The couple return to court and W.J.L. requested a reconsideration of the income imputation. After review, the court reduced W.J.L.’s imputed income to $1130 per month. This amount correlates to the “the maximum a non-blind disabled individual could earn in substantial gainful activity (SGA), as set by the SSA in 2016, and still qualify for disability benefits.”

The reduction resulted in W.J.L.’s child support obligations lowering from $45.17 to $18.31 per week. Since D.A.L. failed to provide credible evidence questioning W.J.L.’s disability, the amount was deemed appropriate.

Contact Us

Have questions concerning imputed income?  At the Law Offices of Sam Stoia, we offer free consultations. Please give us a call to learn how we can help you.