When a divorce happens, New Jersey courts will use several methods in deciding how much each former spouse should contribute financially to raising their children. The most important goal for New Jersey courts is to make sure the arrangements reached provide for the needs of children. The New Jersey Child Support Guidelines are based on the foundational understanding that child support is an ongoing responsibility for parents and that children have a right to both of their parents’ current incomes. If you may be going through a divorce soon, don’t hesitate to get in touch with Union County child support attorneys. We’ll guide you every step of the way to make sure you arrive at the best possible outcome for yourself and your children.
What Do New Jersey Courts Consider in Calculating Child Support?
How do courts determine the appropriate dollar amount of child support? New Jersey law says that the court should first determine the earning capacity of each parent. Courts will calculate the fair income of both parents, which includes every kind of income: overtime, lottery winnings, and unemployment benefits, among others. Only a couple of kinds of income (welfare benefits, benefits to needy or disabled people) are excluded. Taken together, the total income for both is known as the “family pot.”
New Jersey courts consider that, because un-divorced families often pool their resources, then divorced parents should contribute to a combined income “family pot,” from which each parent is responsible for their relative share. If both parents have the same income, child support will be split equally. Typically, one parent earns more than the other, and in this case, the parent with the higher income must contribute more to child support.
What exact percentage each parent should contribute is calculated by dividing each parent’s income by the total in the “pot.” Depending on each parent’s financial situation—the presence of disabilities or extreme financial hardship—one parent may end up paying significantly more.
Because what families spend on children specifically isn’t something we can observe directly, New Jersey relies on three models of what economists call marginal cost estimation. The point is to determine how much an un-divorced family of the same means would spend on the children. Together with the fair income of each parent, this is used to calculate child support.
To do so, New Jersey courts use the Consumer Expenditure Survey, a survey with about 5,000 family participants every quarter, published annually, and released to the public every three years. It is considered the best available source for calculating the cost of children in marginal cost estimation.
How Do Courts Calculate This Support?
New Jersey courts use a two-step process in determining the marginal cost of children for child support. First, they decide on a standard of well-being. There are three widely used standards: Engel, Rothbarth, and Michael and Lazaer.
The Engel standard is based on the proportion of household income used to buy food. The Rothbarth standard is based on how much parents spend on themselves. The Michael and Lazaer standard, developed using the Rothbarth standard, is based on how much parents spend on their own clothing. If families can afford to spend the same proportional amount on food, adult goods, or adult clothing, they are believed to be equally wealthy.
The court then calculates how much money remains in the family pot after deducting taxes. This is finally compared to what the Rule 5:6A guidelines recommend given the number of children and how much money is in the “family pot,” to give the court the rebuttable amount of child support.