Imputation of Income to a Divorcing Spouse

In many divorce cases, when a one spouse or parent is not reporting his or her true income, or is unemployed or underemployed and not earning what he or she could, the court may impute income to that spouse so the proper amount of spousal or child support is paid to the other divorcing spouse.

In a recent unpublished opinion in a case involving a support obligation imposed on one spouse by the court in a divorce action entitled Ungvarsky v. Ungvarsky, Docket No. A-1852-14T3 (App. Div., December 10, 2015), the New Jersey appellate court provided a primer on the grounds for imputing income to a divorcing spouse for the purpose of computing the support obligation to the other spouse:

A court can impute income to a party for support purposes when the party is, without just cause, intentionally and voluntarily underemployed or unemployed. Caplan v. Caplan, 182 N.J. 250, 268 (2005); Golian v. Golian, 344 N.J. Super. 337, 341 (App. Div. 2001). Stated differently, when a spouse is not earning his or her true potential income, “an imputation of income based on that potential is appropriate.” Stiffler v. Stiffler, 304 N.J. Super. 96, 101 (Ch. Div. 1999); accord Halliwell v. Halliwell, 326 N.J. Super. 442, 448 (App. Div. 1999) (potential earning capacity of party, not his or her actual income, should be considered). The imputed income figure is one the party is capable of earning. Dorfman v. Dorfman, 315 N.J. Super. 511, 516 (App. Div. 1998). Before imputing income, however, a judge must first find that the spouse was voluntarily underemployed or unemployed without just cause. Caplan, supra, 182 N.J. at 268. We review a trial court’s decision to impute income under an abuse of discretion standard. Ibrahim v. Aziz, 402 N.J. Super. 205, 210 (App. Div. 2008). The decision “to impute income of a specified amount will not be overturned unless the underlying findings are inconsistent with or unsupported by competent evidence.” Storey v. Storey, 373 N.J. Super. 464, 474-75 (App. Div. 2004). “Competent evidence includes data on prevailing wages from sources subject to judicial notice.” Id. at 475.

The Ungvarsky case can be found here – Ungvarsky v. Ungvarsky

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