The Child's Right to Support When Divorcing Parents are High Income Earners

Child support is a right clearly belonging to the child, to be reasonably supported by his or her parents, as opposed to a right of the custodial parent to receive support from the other parent¹.   A parent brings a cause of action for support on behalf of an unemancipated child so as to relieve the child of the onerous burden of suing one’s own parent.²   It is not a right that can be waived by either parent without consideration of the needs and interests of the child.³   But how much is the right amount of support, particularly in high income earning families?  What expectations should a child of high income earning parents have to material possessions and entertainment that the child of average-income earning parents would consider luxuries?

The starting point in every case concerning an award of child support is the New Jersey Child Support Guidelines, enunciated in Pressler, Current N.J. Court Rules, Rule 5:6A (GANN) and set forth in Appendix IX of these rules.  The guidelines were developed based on statistical data concerning the net income of intact families and their spending habits on their children.  The guidelines are intended to apply in those situations where the combined net income of the parents, having six or less children, is no more than $150,800 per year, or $2,900 per week.⁴  Schedules are set forth, in weekly dollar figures at Appendix IX-F and in percentages at Appendix IX-G.  These amounts are then shared by the parents in proportion to their respective incomes.  Deviations from the guidelines are permitted for good cause by Rule 5:6A.  

In applying the guidelines at the highest level, the basic support award for one child would be 15.6 percent of the parties’ net income⁵, or $452 weekly⁶, which is then apportioned among the parents.  However, in “extreme parental income situations”, such as parents having combined net incomes in excess of $150,800 annually, the Appendix IX-F awards are inappropriate due to the limitations of the economic data, and as such, modification of the basic child support award is authorized.⁷   In such cases, the basic child support award is applied as a minimum, and supplemented with a discretionary amount.  The methods for calculation of this discretionary amount in above guidelines cases is the basis for this article. 

Appendices IX-F and IX-G caution against extrapolating the schedules beyond the maximum award, since statistical data does not support it.  Rather, Appendix IX-A advises that the Court, when establishing a child support award beyond the guidelines amount, should consider the statutory factors set forth in N.J.S.A. 2A:34-23 or N.J.S.A. 9:17-53, which are:

In assessing the first factor -- the needs of the child -- toward what expenses should children be entitled to additional amounts of support, particularly where there is a concern that such funds are meeting the needs of the parent receiving the support, not just the needs of the child?  Is there room to consider the child’s wants and desires within reason of the wealth of the parents, in conjunction with the second factor?  An understanding of the differences between extraordinary expenses and discretionary expenses is first necessary.   

First, certain expenses are already included in the guidelines-based award and must not be duplicated.  They include the average amount that families spend on the children for housing, food, clothing, transportation, entertainment, unreimbursed health care up to and including $250 per child per year, and miscellaneous items.⁸   All family law practitioners are urged to become familiar with these types of expenses, which are spelled out in detail at paragraph 8 of Appendix IX-A.  Nonetheless, these expenses have been accounted for based upon average or marginal spending, which is not applicable in the context of high-income earning families.     

Second, the following expenses are not already included but may be added to the guidelines-based award:  child-care expenses, health insurance for the child, predictable and recurring unreimbursed health care expenses in excess of $250 per child per year, and other predictable and recurring expenses approved by the Court that may not be incurred by the average or intact families, such as private elementary or secondary education, special needs of gifted or disabled children, and parenting time transportation expenses.⁹   For example, a child with special needs or a particular medical diagnosis may require therapy, tutoring, or special medical supplies that warrant supplementary support.

One should first analyze with the client all of the expenses actually being incurred on behalf of the children to determine whether, if included in the award, the expenses likely exceed the average spending amount or, if not included, whether they should be added to the basic award.   Additionally, one must be able to differentiate which expenses are actually being incurred solely on behalf of the children, the children and the parent combined, or the parent solely.¹⁰

Projected expenses that are desired for the child but presently unaffordable by the custodial parent must be identified accordingly.  It is important to include those expenses that would be incurred for the child if they could be afforded so the court can evaluate whether they are reasonably necessary, even if not essential.  The standard is that a child should be permitted to “to share in the other parent’s financial gain,” provided it does not undermine the value system set in place by either or both parents.¹¹  How does one capture this picture and present it to the court?  By painstakingly preparing the client’s case information statement (CIS) – the family law practitioner’s tool of the trade. 

The family part CIS is a required pleading according to Rule 5:5-2.  It compels the party preparing it to itemize pertinent expenses set forth in Schedules A (shelter), B (transportation) and C (personal).  A form CIS is set forth at Appendix V of the rules.  By reviewing bank statements and Quicken reports, receipts, and general spending habits in prior years, one will be best equipped to prepare it and to justify the requested deviation to the support award.

Where there are factual disputes concerning the child’s expenses, the moving party bears the burden of proof to demonstrate that the expenses he or she is claiming are both “legitimate and reasonable. A mere listing of the purported expenses, without more, is insufficient.”¹²

In determining which expenses warrant a deviation of the guidelines support amount, some expenses listed at Schedule C of the custodial parent’s CIS may be fully attributable to the children’s needs.¹³   Private school tuition, sleep away summer camps, gifts for birthday parties of teachers, friends and classmates, lessons, sports and hobbies, dues and club memberships, and entertainment are just a few examples. The New Jersey State Supreme Court recently held that expenses for taxes, insurance, repairs, garbage, snow removal, lawn care, exterminator and plumbing will remain solely the custodial parent’s, as they are “not fairly attributable to the children;” whereas, “those expenses properly related to the children include, but are not limited to, heat, electric and gas, water and sewer, phone and television.”¹⁴

When assessing a child’s “needs,” one must be mindful of the second statutory factor -- the “standard of living and economic circumstances of each parent.”  The definition of “needs” is not literal, but must be considered within the context of the other statutory factors.  “What constitutes necessities depends upon the facts and circumstances of the particular case. They include food, clothing, lodging, medical care and proper education. They are not limited to those things which are absolutely necessary to sustain life, but extend to articles that are reasonably necessary for the proper and suitable maintenance of the child in view of his social station in life, the customs of the social circle in which he lives or is likely to live and the fortune possessed by him and his parents.”¹⁵  For example, sweet 16 and bar mitzvah celebrations represent significant and necessary expenses to some, but not all families. 

The analysis does not end after determining needs.  It is understood that children are entitled to share in “parental good fortune” ¹⁶ post-judgment of divorce, as well as to “certain expenditures for recreation, entertainment, and other non-essential items [that] are reasonable and in the best interests of the child.”¹⁷   Such items have actually included, for example, Philadelphia Flyer tickets, an insured vehicle and a cell phone¹⁸, even though the Appellate Division opined that no parent should be obligated to pay for “extras – those items which are beyond what is reasonably necessary for the child’s welfare – in which that parent does not concur.”¹⁹

By way of a hypothetical, if the two elder children of an intact family of five regularly enjoyed Broadway shows, a pool-boy to maintain an in-ground pool, a cellular phone at the age of 14, and a new car upon turning 18, then one could argue that both parties intended to support the youngest child with a sufficiently similar lifestyle and should be obligated to do so despite their separation and/or divorce. 

If the recipient spouse is enriched, so be it.  The Appellate Division has noted “the law is not offended if there is some incidental benefit to the custodial parent from increased child support payments.”²⁰ Rather, “children of a very successful father should [not] be required to live in a house which is in a state of disrepair, be transported in an old or unreliable vehicle or go without a necessary new furnace.  Their father’s income entitles them to better, and the fact that their mother may benefit incidentally from the component for which the father pays is of no moment.” ²¹  Other incidental benefits could include “help to make the family home more presentable, assistance with the cost of a family car, or a larger amount of money for a teenager's clothing and incidentals.” ²²  An argument could be made that maintenance of the pool by the pool-boy in the above hypothetical permits the custodial parent to continue spending the same amount of time with the children as was done during the marriage, which is in the children’s best interests.  

Unlike in the case of assessing the recipient’s need for alimony, the child’s level of need is not set by the standard of living during the marriage, but rather grows, as does the parents’ income.²³   Be cautioned, there is such a thing as too much support.  If overindulgence is feared, putting aside additional funds for savings to secure the child’s future could be warranted by way of a Uniform Transfer to Minors Act (UTMA)²⁴ account.  This is a custodial account that permits the child to be the account holder, with the parent serving as the custodian until the child reaches majority age is considered to be 21 for this purpose, unless the court orders an earlier date.

While the child is entitled to a lifestyle commensurate with a supporting parent’s income, it must be “an appropriate lifestyle.” ²⁵  As the Appellate Division gently warned, “no child, no matter how wealthy the parents, needs to be provided more than three ponies.” ²⁶ 

Once the child’s reasonable needs are determined, the support award can be calculated the following ways:  The court can calculate a fair and reasonable child support amount under N.J.S.A. 2A:34-23(a), as if the guidelines were not in place, deduct the maximum guidelines-based award, then allocate the balance between the parties consistent with N.J.S.A. 2A:34-23(a); or, an additional discretionary amount can be added to the basic child support award for expenses that are partially included in a certain category of the guidelines award, but which are significantly higher when meeting the children’s needs, and then the non-custodial parent’s share can be apportioned, adding it to the basic award.²⁷  The choice of methodology will be left to the trial court's discretion as the goal remains the same:  “to calculate a child support award that is in the best interest of the child after giving due consideration to the statutory factors and the guidelines.”²⁸  "The key to both the guidelines and the statutory factors is flexibility and the best interest of children."²⁹

In keeping with that philosophy, a unemployed parent will not be able to solely rely upon his or her investment income to determine his or her support obligation while remaining voluntarily unemployed.  Income must still be imputed, based upon past income or earning potential, in order to fairly allocate the child support obligation, even when there is sufficient investment income to satisfy it.³⁰ 

In conclusion, every child has the right to be financially supported by both parents, to the extent reasonably warranted by the factors set forth at N.J.S.A. 2A:34-23.  In the situation of children born to high-income earning parent(s), there is simply more room for debate as to how much more support than the floor amount set by the guidelines is reasonably necessary in each case.

¹ Kopack v. Polzer, 5 N.J. Super. 114, 117 (App.Div.1949), aff'd, 4 N.J. 327 (1950); Martinetti v. Hickman, 261 N.J. Super. 508, 512 (App. Div. 1993).
² Martinetti v. Hickman, 261 N.J. Super. 508, 512-513.
³Ordukaya v. Brown, 357 N.J. Super. 231, 241 (App. Div. 2003); Martinetti v. Hickman, 261 N.J.Super. 508.
⁴Pressler, Current N.J. Court Rules, Appendices IX-F and IX-G.
⁵Pressler, Appendix IX-G.
⁶Pressler, Appendix IX-F.
⁷Pressler, Appendix IX-A, at Consideration #20.
⁸Pressler, Appendix IX-A at Consideration #8.
⁹Pressler, Appendix IX-A at Consideration #9. 
¹⁰Walton v. Visgil, 248 N.J. Super. 642, 650-51 (App. Div. 1991).
¹¹Isaacson v. Isaacson, 348 N.J.Super. 560, 582-583 (App. Div. 2002). 
¹²Accardi v. Accardi, 369 N.J. Super. 75, 87 (App. Div. 2004), citing Curley v. Curley, 37 N.J. Super. 351, 355 (App. Div. 1955).  See, also, Isaacson, supra at 579.
¹³See, Caplan v. Caplan, 864 A.2d 1108, 1114 (N.J. 2005). 
¹⁴Id.  But see, Zazzo v. Zazzo, 245 N.J.Super. 124, 130 (App. Div. 1990) cert. den. 126 N.J. 321 (1991).  
¹⁵Dunne v. Dunne, 209 N.J.Super. 559, 567-568 (App. Div. 1986), citing Melzer v. Witsberger, 505 Pa.462 (1984) and Bethea v. Bethea, 43 N.C.App. 372 (1979) (emphasis added).
¹⁶Zazzo v. Zazzo, supra at 130. 
¹⁷Dunne v. Dunne, supra at 567.  
¹⁸Loro v. Del Colliano, 354 N.J. Super. 212, 223 (App. Div. 2002). 
¹⁹Dunne v. Dunne, supra at 567, citing Melzer v. Witsberger, 505 Pa. 462, 471 (1984).
²⁰Zazzo v. Zazzo, supra at 131.  
²¹Walton v. Visgil, 248 N.J. Super. 642, 650 (App. Div. 1991).
²²Isaacson v. Isaacson, supra at 582-583.
²³“Children are entitled to have their “needs” accord with the current standard of living of both parents.”  Zazzo v. Zazzo, supra at 130 (emphasis added).
²⁴N.J.S.A. § 46:38A-1 et seq.
²⁵Isaacson v. Isaacson, supra at 584, citing Miller v. Schou, 616 So. 2d 436, 438 (Fla. 1993). 
²⁶Isaacson v. Isaacson, supra at 583, citing In re Patterson, 22 Kan.App.2d 522 (Kan.Ct. of App.1996). 
²⁷Caplan v. Caplan, 864 A.2d 1108, 1121-1122 (N.J. 2005). 
²⁸Id. at 1122.
²⁹Pascale v. Pascale, 140 N.J. 583, 594 (N.J. 1995). 
³⁰Caplan v. Caplan, supra.