Articles Posted in child support

money-300x200When calculating child support obligation, the courts first look to the Child Support Guidelines established by the Supreme Court of New Jersey. The Guidelines factor in income from all sources of both parents in order to determine the parents’ respective child support obligations.   However, when it comes to income that is available for support purposes, what is important to consider is not merely what someone’s actual, earned wages are, but what the parents’ income capacities are.  If a parent is voluntarily underemployed or unemployed and earning less than what he or she is capable of earning, the Child Support Guidelines allows the court to impute income to the parent who could or should be earning more.   Child support would be calculated based on what a parent is capable of earning, rather than what the parent is actually earning.

It is not, however, always clear what a person is capable of earning or whether a person is voluntarily underemployed. Some people have sporadic or variable income.  Some people earn income from second jobs or from overtime hours.

In the recently published case of the Superior Court of New Jersey in Ferrer v. Colon, FD-2392-07 (Ch. Div. 2020), the family court assessed whether to impute income to a parent for child support purposes because overtime hours were available to her that she did not utilize.  Should the court impute income to her based on income available to her even if she did not take advantage of all of those hours?

This month, the Appellate Division approved for publication the case of Gormley v. Gormley, A-1428-18, disability-200x300(App.Div. 2019) which addressed the standard to apply in determining the income of a litigant who has been determined by the Social Security Administration to be disabled and whether the Court should impute income for someone who has been adjudicated disabled and does not work.

In this case, the parties married in 2000, had one child, and the plaintiff filed a Complaint for Divorce in 2015.  The Defendant had already been diagnosed with multiple sclerosis at the time of the marriage. In 2002, also during the marriage, the Social Security Administration determined that the Defendant was disabled by multiple sclerosis. As such, she did not work and was receiving $2,023 per month in social security disability benefits. The Plaintiff was employed full-time and earned a commission based income.  In the two years before the trial, he had been earning approximately $150,000 per year.   However, in the year of the trial, he was working fewer hours in order to represent himself at trial, and to study psychology and parental alienation.  As such, he was earning approximately $112,000 per year.

The family court judge imputed $240 per week of earned income to the Defendant even though the Social Security Administration had determined that she was disabled and had been paying monthly social security disability benefits since 2002.  The judge reasoned that she did not visibly observe Defendant exhibit in court disabling symptoms from multiple sclerosis such as fatigue, bladder issues, tremors , difficulty in concentration or any other difficulties that the judge felt would prevent her from working.   No income was imputed to the plaintiff.

After years of a booming economy, the coronavirus pandemic has wreaked havoc on our state and family-corona-300x200national economies.  Non-essential businesses have been forced to close and millions have become unemployed.  Many others who have held onto their jobs have had their hours or pay reduced.  The pandemic has caused households to struggle financially and many are worried about how they will pay their bills and trying to determine how they can reduce expenses.   What are  the options to modify alimony and/or child support obligations if one or both parties has experienced a reduction in income or a loss income due to the coronavirus pandemic?

If one or both litigants cannot resolve the issue on their own, a lawyer and/or mediator can offer up assistance to resolve the matter.  A resolution is going to require both parties to be reasonable and understanding.  The person receiving support may need to be understanding of the obligor party’s financial distress and worry.  The person paying support may need to understand that alimony and child support may represent all or most of the receiving party’s income and that party cannot apply for unemployment benefits to replace lost support. The matter is more significant when there are children that have to be cared and provided for, and that is paramount.

If the parties cannot come to an agreement, can the court offer relief?  The courts have not been having hearings but for emergency matters, and financial disputes are generally not considered emergent.  However, the courts in New Jersey have risen to the occasion and applications to modify support can be filed electronically. A Family Division judge can decide the matter based on the review of the papers alone if that is requested, or the judge can conduct oral argument, settlement conferences and the like via telephone and/or video conference.  The courts are still open to conduct family law business.

It goes without saying that the impact of the coronavirus pandemic has been widespread and file2381251825687-238x300devastating. It has been dramatic and sudden. It has reached every corner of the globe. It has affected virtually every institution – political, economic and social. It has touched every community, every family and every person in some way. For those already going through the personal upheaval of divorce, it’s emotional and financial consequences have only served to make a difficult situation even more stressful and complicated. Even though the vast majority of divorce cases will end up being resolved by the parties by way of a negotiated agreement, the pandemic’s impact has clearly had a drastic effect upon the parties’ ability to negotiate a resolution of their cases at this juncture.

Front and center on our website is the quote from Justice Brandeis: “Nothing is settled until it is settled right.” The pandemic has certainly put this to the test. Until six to eight weeks ago, we were in the midst of a period of sustained economic prosperity. Unemployment was at historic lows. Incomes and wages were up. Businesses were flourishing. The stock market and other investments were at record highs. The real estate market had finally rebounded from the impact of the recession years earlier. One of the biggest keys in trying to negotiate a resolution of a divorce case is having some sense of stability in regards to the family’s financial picture now and of its predictability into the future. When it comes to issues of support, a payor spouse’s willingness to commit to an amount to pay is not only tied to what he or she is earning then, but the reliability of these earnings going forward. When it comes to the division of assets, determining what allocation or distribution of same would be fair and equitable depends not only on being able to identify and value those assets at that time, but some level of predictability of what will happen with those assets into the future. Until recently, that task seemed fairly easy. However, the pandemic has swiftly turned this process on its head.

Record employment has turned to record unemployment in a matter of weeks, largely the consequence of the government’s policy to shutdown “non-essential” businesses in an effort to blunt the spread of the virus. Twenty-two million claims were made for unemployment in the past three weeks alone. Even if people didn’t lose their jobs, they may have suffered a reduction in hours or pay. Social distancing and stay home requirements have further curtailed many jobs and other economic activity. Many businesses have been closed or have seen their revenues drastically reduced. To make matters worse, no one has been able to predict with any level of certainty how long the shutdown will last – weeks, months, until there is a vaccine – or even what the impact all of this economic dislocation will have either short-term or long-term. Whenever it is over, will things simply return to the prior “normal” or will a new “normal” come into being? Will people get their old jobs back? Will there even be businesses or jobs to return to? How much will future earnings be impacted? Will the stock and financial markets rebound?

Due to COVID-19, New Jerseyeans, among others, are experiencing difficult financial times. While there stimulus-300x198has been action by the government to ease financial burdens such as staying evictions and forbearing mortgage payments, the fact of the matter is that ensuring the receipt of child support during this time is critical. Children need the financial support of their parents in good times and bad times. The coronavirus relief bill includes direct cash payments to help people through the crisis — but one red flag that can cost otherwise eligible Americans money is owing past due child support.

When a parent does not make child support payments on time, the overdue payments are called arrears. In order to collect arrears there are various measures that can be taken against a parent that owes child support such as the following:

  • Jail

covid19-300x200Co-parenting children when parents are separated or divorced can be challenging in normal circumstances.  One would agree, however, that times are not normal.  The country is in the midst of a pandemic due to the COVID-19 virus.  Governor Murphy has closed schools and many business, and he has directed that we engage in “social distancing” and stay at home for the indefinite future.

Families all over the State are concerned about their children’s health and well-being, not to mention family finances due to the number of people who have lost jobs, been furloughed or suffered from cuts in pay or hours.  Existing arrangements for custody and parenting time were designed for normal circumstances, not necessarily for unprecedented times such as these.

Questions may arise as to how  separated parents address custody, parenting time and child support issues.  To what extent do existing orders have to be followed? Generally, many existing agreements or orders for parenting time can and should be followed.  However, can a parent withhold or refuse parenting time?  What happens if a parent or child is exposed to the coronavirus or is at heightened risk of exposure?  What if a parent, child or family member begins to exhibit symptoms?  How should parents accommodate a household that has an elderly family member or a family member with a health condition which makes COVID-19 particularly deadly?  What if one of the parents lives out of state and the child has to travel some extended distance?  What if the households do not have the same social distancing practices?   Can both parents’ homes accommodate educating the children while school is closed?  Should parenting time be modified to reflect that both parents are home more either due to having lost their jobs or they are working from home?

Maury says you are NOT the father! Actually, after getting the results of a genetic or  DNA test, you file000349823764-1024x768discover that you are not the father of the child you were led to believe was yours and had been supporting.  Rather, the child you have been supporting was the offspring of an extramarital affair between your ex-wife and another man conceived during your marriage. Once you get past the shock of such a disclosure, you question to what extent you may have an ability to seek reimbursement from the biological father for the support you had already paid on behalf of that child.

If you turned to the internet for an answer to that question, you might not only have been led to believe you had no right to do so, but that you were a selfish, horrible and “grotesque” person for even raising the issue. This was essentially the exchange highlighted on my browser’s home page a few weeks back.  As a lawyer, it is obvious that  such “advice” would be legally erroneous, certainly under New Jersey law. However, I wondered how many people may have relied upon this response as opposed to discussing the matter with an attorney.

Before commenting on whether it is wise or prudent to rely upon “Ask the Internet” to get answers to significant legal questions, I will address whether under New Jersey law a claim for reimbursement of child support can be brought against one determined to be the biological father of a child. The applicable statute as well as our courts have answered yes. Situations such as these are governed by the provisions of the New Jersey Parentage Act, N.J.S.A. 9:17-38 to 59, enacted in 1983, and modeled after the Uniform Parentage Act 1973. The Parentage Act was intended to establish the principle that regardless of the marital status of the parents, all children and parents have equal rights with respect to each other and to provide procedures to establish parentage in disputed cases, as well as to ensure that children receive their statutory right to financial support and to facilitate payment by fathers who refused to admit paternity and/or fail to pay. To that end, the Parentage Act not only provides all children with a judicially enforceable right to such support, regardless of their parents’ marital status, it affords to “any person” who has furnished financial support to a child the ability to institute a proceeding seeking reimbursement for reasonable educational, medical or other support-related expenses from the biological father where the existence of the father/child relationship has been declared or paternity is acknowledged or adjudicated. N.J.S.A. 9:17-55(a).

“All you need is a dollar and a dream”. Mega Millions. Powerball. Pick-6. State lotteries all over the Lottery-300x232country encourage people to pluck down their dollars for the dream of possibly winning a fortune and being financially set for the rest of your life.

However, for one Michigan man that “dream” may have been considered more of a nightmare when he was directed in his divorce case to turn over to his ex-wife $15 million, nearly one-half of the Mega Millions jackpot he won in 2013. That decision was recently affirmed by the Michigan Court of Appeals in Zelasko-v-Zelasko (Docket No: 342854 decided June 13, 2019). Why the husband may have considered a lottery jackpot to be a “nightmare” included the fact that the parties married in 2004, separated in 2008, filed a divorce complaint in 2011 – almost two years before the winning lottery ticket was purchased – and where the wife had been the primary breadwinner, earning roughly three times what the husband earned. Why such a result? Most critically, under Michigan law “marital property” subject to equitable distribution in a divorce includes all property acquired from the date of marriage until the date of entry of the divorce decree. Hence even property acquired after a separation or after a divorce complaint is filed is considered marital property in Michigan. Since these parties’ actual divorce did not become final until 2018, the lottery winnings of 2013 were still considered marital property.

Among the other reasons this significant award to the wife was affirmed on appeal included: (1) that the determination was made by an arbitrator during a binding arbitration process which had been agreed upon by the parties, with the ability to challenge such rulings being statutorily limited; (2) the arbitrator’s ruling that such a division was fair and equitable, opining that the winning lottery ticket was probably not the first lottery ticket the husband purchased during the marriage and that as losses throughout the marriage were incurred jointly, winnings should also be shared jointly; and (3) that the dollar spent for the ticket was arguably marital money and as such a joint investment. Beyond this, the husband had not engendered much sympathy since he allegedly failed to contribute any money for the support of the parties’ three children.

At the end of 2017, the U.S. Congress passed the most sweeping tax changes in over 30 years, referred to as the Tax Cuts and Jobs Act of 2017 (TCJA). While there were many provisions of the file0001546166524-300x225federal tax laws which were impacted, the most publicized changes were the reductions in the income tax rates along with the reduction and/or elimination of various deductions or exemptions. Most of these changes went into effect for the 2018 tax year. However, when it came to family law matters, the biggest change brought about by this tax law was regarding the deductibility and taxability of alimony. Until this law, alimony payments were deductible by the payor and had to be included as income for the recipient, albeit subject to certain regulations and phase-out provisions. While this tax treatment was “grandfathered” for pre-existing alimony obligations, alimony obligations established after January 1, 2019 were no longer tax deductible to the payor or considered taxable income to the recipient under the TCJA. Indeed, there was a mad dash to finalize divorces prior to December 31, 2018 to take advantage of the prior tax treatment of alimony; so much so that many counties continued to make Family Court judges available during their winter recess to put through divorces.

While the tax treatment of alimony may be considered the most prevalent provision of the TCJA impacting family law, it is becoming evident that there is a more subtle, but no less important, impact which is only now coming to light. Again, one of the major changes in the tax law was the across-the-board reduction in the individual tax rates. As a result, the IRS promulgated revised withholding schedules, which adjusted [downward] the amounts being withheld from one’s paycheck for federal taxes during 2018. Since the vast majority of taxpayers are W-2 wage earners, these revised withholdings applied. What people saw was some sort of increase in their net pay each paycheck. Who wouldn’t enjoy having a little more money in your pocket?

What’s the problem? UNDER WITHHOLDING!

It is not unusual for a parent to claim that they are paying too much in child support or for a parent to claim that they are not receiving enough child support.  In recent celebrity news, Robert8f5242a257ea4322359f564d02a4afc1-300x200 Kardashian is claiming the former.  According to an article in People Magazine, Mr. Kardashian claims that he can no longer afford his $20,000 per month child support payments to Blac Chyna, the mother of his child, and he is asking for a modification in his child support obligation. He also claims that his volatile relationship with Blac Chyna and the domestic violence complaint that she filed against him last year damaged his career and is preventing him from earning money.  Mr. Kardashian claims that his monthly income has been reduced from nearly $100,000 per month to less than $10,000 per month since their split as he is no longer appearing on episodes of Keeping up With the Kardashians. He claims, however, that Ms. Chyna’s monthly income has increased, and that her monthly income is nearly $60,000.00. Mr. Kardashian is asking that Ms. Chyna pay him child support of $2,864 per month on behalf of their daughter, Dream, with whom he shares equal custody and parenting time.  According to the article, Mr. Kardashian and Ms. Chyna are in the process of exchanging financial documents.

I have blogged before about calculating child support in high income cases, including a blog about another celebrity, Angelina Jolie, seeking “Meaningful Child Support” in which I pointed out that child support orders are modifiable, even in high income cases. The seminal case in New Jersey on modification of support obligations is Lepis v. Lepis, 83 N.J. 139, 151 (1980), which allows for a potential modification of support based on “changed circumstances”.  Among the changed circumstances that can result in a review or modification of child support obligations is a decline in the income of the parent who is paying child support.  Conversely, the parent paying child support is entitled to a reconsideration of child support where there has been a significant change for the better in the circumstances of the parent receiving child support.  A change for the better or worse in one of the parent’s incomes is not the only kind of change in circumstance that a court can consider.  For instance, maturation of the child may result in a modification of support, some change in the need of the child, or some change in overnight parenting time arrangements.   The change in support should not, however, be only temporary.

Either parent can file a motion to increase or decrease child support.The party seeking to modify support (either to increase child support or decrease it) bears the burden of establishing a threshold (a “prima facie”) case of changed circumstances.  Lepis, 83 N.J. 139 (1980).  If the moving party does not establish at least a threshold burden, then the moving party will lose.  If that “prima facie” case of changed circumstance is presented, however, then the court will order the parties to exchange documents as to their financial circumstances and the needs of the child.  If there is a substantial issue of genuine fact that is in dispute, the court may order a hearing or trial, but will not do so in all cases.