New Jersey Divorce Chronicles, Part 10: Bad News About Alimony & Child Support
Subject No.1: Sharon
When we last saw Sharon and Robert in Part VIII of our ongoing series, the Marital Early Settlement Panel (MESP) had just recommended an equal value distribution of the couple’s marital property and debt, with Robert keeping the family home. Meanwhile, in Part IX, we saw Jason and Melissa working out their own property division with the assistance of their mediator. Today, we’ll look at the MESP’s recommendations regarding alimony and child support in Robert and Sharon’s case.
Robert is asking for both alimony and child support. Sharon’s attorney argues to the MESP that he should not receive either, because based on his income average over a long period of time, he is capable of earning almost as much as Sharon. Robert’s attorney points out that the construction industry was decimated during the recent economic downturn, and there is no evidence that his client is able to earn anything more than he earned during the past couple of years.
As noted in Part I, Sharon currently earns $76,000 per year. Robert’s income has fluctuated, dropping significantly over the past two or three years. Last year he earned only $19,000, but over the past ten to fifteen years he earned an average of $52,000. Sharon’s position is that any child support and alimony should be based on the long-term average. Robert’s position is that it should be based only on last year’s earnings. He produces his business books that show he is on track to earn a similar amount this year.
Sharon believes that Robert is now intentionally keeping his income low because it is better for his case, but she does not have any evidence to support this. Her attorney recommended a vocational analysis, but Sharon hesitated due to the expense. After doing a little research on her own about the effects of the recession on the construction industry, she became concerned that an analysis might show that there really isn’t more work currently available for Robert after all.
The panel tells Robert and Sharon that under the New Jersey Child Support Guidelines, they typically average back income for no more than 36 months. For alimony purposes, they could look back a bit further (generally no more than five years), but in this case they don’t see any reason to do that. Robert’s average annual income for the past 36 months has been approximately $24,000, so for both alimony and child support they are basing their recommendations on an income of $76,000 (or $1,462 per week) for Sharon and $24,000 (or $462 per week) for Robert.
The panel then states that after analyzing the situation and considering all of the applicable alimony factors, they recommend that Sharon pay Robert durational alimony in the amount of $244 per week ($12,688 per year) for eight years.
Moving on to child support, the panel notes that the court has ordered physical custody to Robert with visitation to Sharon. They share the following calculations from the New Jersey Sole Parenting Worksheet:
L.1-3: Custodial parent (CP/Robert) will have weekly gross taxable income of $462 from employment plus $244 per week in alimony. After deducting $85 for income tax withholding (simplified), he is left with a net taxable income of $621.
L.1-3: Non-custodial parent (NCP/Sharon) will have weekly gross taxable income of $1,462 minus $244 in alimony. After deducting $200 for income tax withholding (simplified), she is left with a net taxable income of $1.018.
L.6: Total net income for both parents is $1,639.
L.7: Sharon has approximately 62% of the available income and Derek has approximately 38%.
L.8: The basic child support amount for two children (From Appendix IX-F Schedule) is $340 per week.
L.9: The parties’ weekly net work-related childcare is $92 ($120 minus a tax credit adjustment. as calculated on the Appendix IX-E Worksheet).
L.10: The cost of the children’s health insurance premium is $35 per week (currently deducted from Sharon’s paychecks).
L.13: The total child support amount including childcare and health insurance is $467 per week.
L.14: Robert’s income-adjusted share of child support is $177 and Sharon’s share is $290.
L.16: Sharon receives a credit of $92 for payment of childcare expenses.
L.17: Sharon receives a credit for payment of the $35 health insurance premiums that come out of her paycheck.
L.20: Sharon receives a $34 credit for her time-adjusted share of variable expenses ($340 per week basic support x Sharon’s 27% share of overnights (100/365) x 37%).
L.21-27: Sharon’s net child support obligation after the credits is $129 per week. There are no other applicable adjustments, so a court would order Sharon to pay Robert $129 per week.
Robert is happy with all of the MESP recommendations. The alimony and child support would give him sufficient income to keep the house. Sharon, on the other hand, is horrified at the amount of money the panel expects her to pay to Robert. She confers with Ms. Shark, who points out that alimony decisions are often rather arbitrary, meaning that they might get a very different result in court—although she can’t say that the result would necessarily be any more favorable to Sharon.
“If you choose to reject the panel’s recommendations and continue to trial,” she advises, “we may be able to get a better result on both alimony and child support, but we really need some good evidence showing that Robert is going to be able to earn a significantly higher income.”
Sharon points out that Robert is still amenable to giving her more parenting time and asks how this would affect the child support payments. Ms. Shark runs some calculations on the Shared Parenting Worksheet, and estimates that if Sharon has three nights per week with the children—or a 43% timeshare—she could reduce her child support payments to $67 per week. “What if I could convince him to share custody 50/50?” Sharon asks. “That would reduce your child support payments a bit more, probably to about $60 a week. You have to keep in mind though, that those savings would be somewhat illusory. You would really end up paying about the same amount. The difference is that you would be buying more food and other items for the children directly instead of paying the money to Robert for him to spend on the kids.”
Ms. Shark again suggests hiring a vocational evaluator to interview Robert, review his health and work history records, and conduct some research regarding the current availability and pay rates of appropriate jobs. Sharon is not quite sure what to do next. At this point there is no aspect of the case that she is happy with. She decides to reject the MESP recommendations. Ms. Shark tells her that this seems like a good decision, but also cautions her regarding the potentially high cost of a trial. “It’s also possible,” she warns, “that you could end up paying some of Robert’s attorney’s fees and expenses as well as your own, since your income is higher.”
Sharon hesitates, realizing that she has already spent a great deal of money, but her sense of outrage is overwhelming. She tells Ms. Shark she has made up her mind to fight.
What’s next for Sharon and Robert? Stay tuned for a new Divorce Chronicles blog, coming soon!
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