Calculating Alimony

By Peter Van Aulen, Esq.

Currently in New Jersey there are no set guidelines or official formula by statute or case law to compute the amount or length of alimony. Many attorneys and Judges unofficially compute the amount of alimony in NJ by taking the gross income of both spouses and subtracting the two numbers and awarding the lesser income spouse around one four (1/4 ) of the difference of said incomes. For example, if one spouse made $100,000.00 a year in gross income and the other spouse made $25,000.00 a year in gross income the difference of the two incomes would be $75,000.00. Then you multiply $75,000.00 by 1/4, so the yearly alimony obligation is $18,750.00 or $360.57 per week. Please note that this formula was once called the 1/3 rule . However tax reform in 2017 made alimony no longer tax deductible for the payor spouse. Therefore, the 1/3 rule has been adjusted by some practitioners to 22 to 25 percent depending on the income of the parties.  Also, if one spouse is not working or is not fully employed, she or he could be imputed an income that a Court believes a spouse is capable of earning. In determining the duration of alimony, I have seen the length computed in the profession by giving the spouse who will receive alimony one year of support for every year of marriage. However, it is important to note that these two methods are not sanctioned in any statute or case law in New Jersey.  So how is the amount and duration of alimony officially calculated by Courts in New Jersey?

The New Jersey Alimony statute lists out a number of factors that family law courts must use in calculating both the amount and duration of alimony:

1. The needs of one party, combined with the actual ability of the other party to financially meet those needs.
2. The duration of the marital relationship or civil partnership.
3. How old each party is, as well as their health (both emotionally and physically)
4. The parties’ standard of living which they helped to establish during the relationship and the ability of each party to financially achieve a reasonably similar standard of living.
5. The earning capacity of each party, taking into account their level of education, training, occupational skills and overall employability in the current job market.
6. How long the party requesting maintenance has been away from the workforce.
7. A parties’ parental responsibilities.
8. How long and how much it will cost for the party asking for support to get the education or training to allow them to secure good employment, whether such training is available, and the prospect of future attainment of income.
9. The contributions each party has made during the relationship. This is both financial and non-financial, such as child-rearing, keeping house, and sacrificing one’s career to support the other party’s aspirations;
10. The final division of marital property upon dissolution;
11. Whether investment income can be derived from any assets held by each party;
12. The tax ramifications of any alimony awarded;
13. Was there any temporary support paid during the divorce litigation?
14. Any other relevant factor.

There are several kinds of alimony in New Jersey that courts have the discretion to give upon a final dissolution of the marriage. Pendente lite alimony is alimony that is paid to one party during the duration of the divorce litigation. The next four kinds of alimony will usually be awarded upon the final judgment.

Open durational alimony – this kind of support is usually awarded in a long-term relationship where the party asking for maintenance is unlikely to re-enter the workforce. Once they start receiving any retirement, the presumption is that the alimony will cease.

Limited duration alimony – Alimony of this type is limited to a specific term, whether that be in months or years. It’s supposed to help a spouse be able to support themselves after the marriage, but there’s a deadline on the money they will receive.

Rehabilitative alimony – this kind of alimony is geared toward ensuring the spouse is able to re-enter the job market, by paying for their tuition, training or expenses.

Reimbursement alimony – this is often employed in marriages where one spouse worked while the other went through school, such as medical school, and helped pay for their tuition and living expenses. They can therefore be reimbursed by that educated spouse upon dissolution of the marriage.

The application of the above factors is very fact sensitive. Usually, the two most important factors are the length of the marriage and the difference of income. However, depending on the facts of the case other factors could gain equal or more significance. Determining the amount and duration of alimony in NJ can be complex. This is why you need an experienced New Jersey Divorce Lawyer who understands how to apply the current law to your situation and advocate your case. Call Peter Van Aulen at 201-845-7400 today for a free initial consultation.