three pony rule

      In high-income cases, determining the appropriate level of child support is a difficult – and critical task for the courts.  Part science, part art, most judges rely on both detailed financial disclosures adn a qualitative assessment of what is truly in the child’s best interests. In the vast majority of low- and middle-income cases, judges follow the advice of the New Jersey Child Support Guidelines, which define child support based on the family’s net income. In 2006, the Guidelines were revised include more high-income situations. Many feel this formulaic approach was more hindrance than help because discretionary spending patterns can vary widely. 

       The New Jersey Supreme Court’s revised the Child Support Guidelines effective September 1, 2007 – specify only a minimum support level (with no guidance on an upper limit) for families with net incomes exceeding $187,000. Previously, the Guidelines defined both the support level for families with net incomes exceeding $229,840. When the new Guidelines are in effect, a large number of cases will no longer be subject to guidelines on the maximum level of support, which should result in awards that are more in keeping with the parties’ lifestyles.            

        Approximately 10 years ago, the New Jersey Child Support Guidelines were overhauled to include more families. Prior to those changes, only cases in which the combined net income (i.e., the net after-tax income of both parents) was under $52,000 per year fell within the Guidelines. The changes significantly raised the upper limit of the Guidelines to include families whose combined net income was as much as $150,800 per year ($2,900 per week). The Guidelines were not changed again until 2006, when the upper limit was raised to cover families up to $229,840 ($4,420 per week). The goal was to make the Guidelines more inclusive.

            However, the changes had unintended consequences. While there were some modest increases in child support awards at lower-income levels, support actually decreased at the upper levels – which prompted an immediate outcry from the Family Law Section of the New Jersey Bar Association. Others argued that strict Guideline calculations did not make sense in higher-income situations where discretionary spending patterns would not necessarily be captured in the economic data on which the Guidelines were based. 

          The Supreme Court took note and accepted the recommendation of its Family Practice Committee to set the top of the guidelines at $187,000 per year ($3,600 per week) in combined net income. The Court expects that the new limits will cover 90 percent of the state’s child-support cases.

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