Alimony Reform and The Loss of Employment or Income

By Peter Van Aulen, Esq.

NJ Alimony reform was signed into law on September 10, 2014 by Governor Christie. This statute changed the requirements in making an application to modify an alimony obligation if the paying spouse happened to lose their job, or take a hit in pay. The statute states when the change of circumstance occurred due to job loss, the length of time a payor is unemployed or has an involuntary reduction of income shall not be the only factor considered by the court. According to the statute, when a non-self-employed party requests modification of his or her alimony obligation, the court shall consider all of the following:

• The reason the paying spouse’s income has been lost or reduced;
• Any efforts shown by the paying spouse to find new employment, or pursue a different career path upon losing their job;
• If there has been a good faith effort by the paying spouse to find a new job if they have been laid off or fired;
• The income and circumstances of the spouse receiving alimony, including their efforts to find employment in light of said circumstances;
• The health of each party, and whether that impacts their ability to find steady work;
• If the paying spouse received severance or some other kind of award upon being terminated;
• If there have been changes in either party’s financial circumstances since the last order awarding alimony;
• The reasons why either party’s financial situation might have changed since entry of the alimony award, including whether either party’s financial situation might have actually improved since the last order;
• If there should be a temporary order to change the support, and the terms of the adjustment during the paying spouse’s job search;
• Any other factor deemed relevant and appropriate by the court.

Under New Jersey alimony reform, the paying spouse can file an application for modification only after he or she has not been able to return to their job or find reasonably similar employment for a period of 90 days. This is actually a major change in the law. Prior to the passage of this reform, case law held that temporary loss of income was not a basis to modify a support obligation. Therefore, short-term unemployment or underemployment (as commonly seen in the last Great Recession) could not be used to adjust payment obligations. Now, the spouse obligated to support their ex-partner only has to wait 90 days to make his or her application. Further, under the statute the court has the discretion to order any relief granted retroactive to the date of job loss or reduction of income.

When the payor is self-employed and files an application to modify an alimony obligation based on loss or reduction of their income, the application must include an analysis of the “economic and non-economic benefits” he or she receives from the business. At that point, there must then be a comparison between the new benefits to any benefits which existed simultaneous with the establishment of the original alimony award.

Also, under NJ alimony reform, the court has discretion to create a temporary remedy for applications to modify due to loss of employment or reduction of income. The court can temporarily suspend support, order a reduction in support on terms, order that support be paid in some amount from assets pending future proceedings, order a periodic review, or “enter any order the court finds appropriate to assure fairness and equity to both parties.” This allows courts to revisit the matter in the future without either party having to formally re-apply to the court for intervention. It also provides some flexibility in the Orders.

If you have questions concerning the modification of an alimony obligation due to loss of employment or reduction of income, call Peter Van Aulen 201-845-7400 today for a consultation.