Calculating Child Support in High Income Divorce Cases

When parents divorce, they frequently disagree about the appropriate amount of child support that should be paid between them, or how to cover the financial cost of raising children in two homes. In families with substantial earnings, the costs are higher, and the disagreement is more complicated.

In general, child support is calculated using the New Jersey Child Support Guidelines (“Guidelines”), which is a formula set by the state of New Jersey. The Guidelines only apply to parents whose combined net income ranges from $8,840 to $187,200 per year. The Guidelines do not apply if the parents’ combined net income exceeds $187,200 or if a child is attending college and living away from home.

In high-income situations, the child support calculations are more complex. New Jersey law directs us to start with the guidelines-based award but then to supplement it with a discretionary amount that is not calculated by any formula. However, determining the “supplemental” amount raises many questions and requires a detailed analysis of statutory factors such as: (1) needs of the child; (2) standard of living and economic circumstances of each parent; (3) all sources of income and assets of each parent; (4) earning ability of each parent; (5) need and capacity of the child for education, including higher education; (6) age and health of the child and each parent; (7) income, assets and earning ability of the child; (8) responsibility of the parents for the court-ordered support of others; (9) reasonable debts and liabilities of each child and parent; and (10) any other factors the court may deem relevant.

The parties may disagree on their respective income levels or the reasonable needs of the children. If the parties disagree as to how the family spent their money during the marriage, it may be necessary to retain a financial expert to prepare a lifestyle analysis. The appropriate child support amount will depend on the unique facts of each case.

If you have questions regarding child support, contact the experienced family law attorneys at Cohn Lifland Pearlman Herrmann & Knopf, LLP. We can help you understand your rights and obligations.