Whether calculating child support for the first time or if one is seeking modification of a prior court order for support, the question of what exactly makes up one’s income for purposes of calculating the final support amount is one that is debated with frequency.
Litigants hear all the time that all child support orders are “income-based”. What this means is that the income of both parents is combined, and a basic child support obligation is established using a percentage of income. When asked how much they earn on an annual basis, most people respond with an amount that is reflective of their net income. Appendix IX-A to the Court Rules defines net income as gross income minus income taxes, mandatory union dues, mandatory retirement, previously ordered child support orders, and, when appropriate, a theoretical child support obligation for other dependents.
But that is not the whole story.
What becomes just as important, and what can affect the overall amount of support is exactly what the Court will consider “gross” income. Appendix IX-B to the Court Rules states that, for the purpose of these guidelines, gross income is defined as all earned and unearned income that is recurring or will increase the income available to the recipient over an extended period of time. When determining whether an income source should be included in the child support guidelines calculation, the court should consider if it would have been available to pay expenses related to the child if the family would have remained intact or would have formed and how long that source would have been available to pay those. Basically, if someone’s job is paying an expense that other families usually have to pay on their own, then the extras can be added into gross income to calculate child support.
If income from any source is sporadic or fluctuates from year-to-year (e.g. seasonal work, dividends, bonuses, royalties, commissions), the amount of sporadic income to be included as gross income shall be determined by averaging the amount of income over the previous 36 months or from the first occurrence of its receipt whichever time is less.
As you can see, the final amount of gross income can be altered quite substantially depending of the factual circumstances and what types of incomes are applied to your specific matter, which will have a direct effect on the final support amount. Whether formulating a child support amount for the first time or applying for a modification of a prior award, whether you are the payor or the payee, it is important that you have proper representation throughout this process to ensure that you are utilizing the appropriate amount of gross income when calculating your child support payment.
Contact the New Jersey Family Law Firm of Lyons & Associates Today
If you or someone you know has issues in relation to child support, then call one of the skilled attorneys at Lyons & Associates. Call for a consultation today at 908-575-9777. You can also fill out our online intake form.
WRITTEN BY: William P. Lemega