How is Alimony Calculated in the State of New Jersey?

How is Alimony Calculated in the State of New Jersey?

New Jersey Statutes provide for payment of alimony, also known as spousal support or spousal maintenance, during the pendency of any action for divorce as well as upon final judgment of divorce. There are no guidelines or formulas to determine spousal support similar to the child support guidelines. Instead the statute sets out 12 factors which should be taken into account by the Court when considering alimony and a 13th factor which is a catchall. The factors are:

1. The actual need and ability of the parties to pay;
2. The duration of the marriage or civil union;
3. The age, physical and emotional health of the parties;
4. The standard of living established in the marriage or civil union and the likelihood that each party can maintain a reasonably comparable standard of living;
5. The earning capacities, educational levels, vocational skills, and employability of the parties;
6. The length of absence from the job market of the party seeking maintenance;
7. The parental responsibilities for the children;
8. The time and expense necessary to acquire sufficient education or training to enable the party seeking maintenance to find appropriate employment, the availability of the training and employment, and the opportunity for future acquisitions of capital assets and income;
9. The history of the financial or non-financial contributions to the marriage or civil union by each party including contributions to the care and education of the children and interruption of personal careers or educational opportunities;
10. The equitable distribution of property ordered and any payouts on equitable distribution, directly or indirectly, out of current income, to the extent this consideration is reasonable, just and fair;
11. The income available to either party through investment of any assets held by that party;
12. The tax treatment and consequences to both parties of any alimony award, including the designation of all or a portion of the payment as a non-taxable payment; and
13. Any other factors which the court may deem relevant

N.J.S.A. § 2A:34-23(b)

There are four different types of alimony: rehabilitative alimony, reimbursement alimony, limited duration alimony and permanent alimony.

‘Rehabilitative alimony permits a short-term award “from one party in a divorce [to] enable [the] former spouse to complete the preparation necessary for economic self-sufficiency,& … and ceas[es] when the dependent spouse is in a position of self-support … Rehabilitative alimony thus represents an appropriate remedy where, for example, “a spouse who gave up or postpone her own education to support the household requires a lump sum or a short-term award to achieve economic self-sufficiency.”‘ Cox v. Cox, 335 N.J. Super. 465, 474-475 (App. Div. 2000).

Although the Court uses all the factors set forth in N.J.S.A. § 2A:34-23(b) in determining an appropriate award of alimony, factors 5 through 9 are of particular interest when considering rehabilitative alimony.

Reimbursement alimony “is intended to compensate a spouse who has made financial sacrifices resulting in a reduced standard of living by enabling the other spouse to forego gainful employment while securing an advanced degree or professional license to enhance the parties’ future standard of living.” Cox v. Cox, 335 N.J. Super. 465, 475 (App. Div. 2000). Reimbursement alimony is also awarded for a set period of time.

Limited duration alimony is based on factor (2) of the statute: “The duration of the marriage or civil union.” N.J.S.A. § 2A:34-23(b). Limited duration means that alimony is awarded for a limited period of time, such as six years, and then ends.

Permanent alimony is usually defined as the payment of alimony by the payor to the payee until the remarriage of the payee, death of the payor or death of payee, whichever comes first. There are, however, what are referred to as “changed circumstances” which may result in a court terminating permanent alimony early. Changed circumstances could be, for example, the illness or disability of the payor spouse or the retirement of the payor spouse.

The Appellative Division stated in Cox v. Cox, 335 N.J. Super. 465, 483 (App. Div. 2000), “all other statutory factors being in equipoise, the duration of marriage marks the defining distinction between whether permanent or limited duration alimony is warranted and awarded.” The next logical question is what length of marriage determines whether limited duration or permanent alimony is awarded?

There is no bright line determining what the length of marriage is for permanent vs. limited duration alimony!

Some practitioners say that a short term marriage is ten years and under and a long term marriage is more than 20 years and therefore limited duration alimony should be awarded in cases where the length of the marriage is ten years and under. What happens when the marriage is of intermediate length – between 10 and 20 years? It is argued that in those situations one has to look very closely at the other factors set forth in the statute and either form of alimony could be awarded.

The New Jersey Appellate Division in Gnall v. Gnall, a decision approved for publication on August 8, 2013, stated that a “15 year marriage is not short-term, a conclusion which precludes consideration of an award of limited duration alimony.” In other words, all else being equal, permanent alimony should be awarded in a marriage of 15 years or longer.

Once it is determined that the marriage is long term, the next step is to determine the amount of spousal support. Factors to be considered in determining the amount of spousal support are the parties’ lifestyle during the marriage and each party’s earnings over the past 3-5 years.

Linda F. Spiegel has over 30 years experience as a family lawyer and more than 24 years experience in Alternative Dispute Resolution (ADR). Linda has the diverse background to make sure you achieve a fair division of assets and equity in mediation.