Unemployment, Job Loss, Decreased Income, and Alimony in New Jersey

One of the toughest positions to be in for the supporting spouse and the supported spouse is the situation where a supporting spouse loses their job, or their income is reduced. Both households are impacted by the job loss, and if the parties can’t work out an out-of-court agreement an application has to be made to the court to resolve the question of whether alimony can be reduced. In order to prevail on an application to reduce alimony the supporting spouse will generally have to show that they have been diligently looking for work to bring their income back to its prior level. During the great recession as blue color and white-collar professionals were getting downsized the courts struggled to come up with uniform ways to deal with the flood of alimony adjustment cases. The recent changes to New Jersey’s alimony laws set uniform rules and procedures for courts to determine when a supporting spouse can get a reduction in the term or amount of their alimony payments. There are two separate and distinct tracks of analysis. One track deals with W-2 wage earners, while the other track deals with self-employed individuals.

W-2 Wage Earners

The court has to look at the following factors when a W-2 wage earner suffers a loss of income and is seeking a modification of alimony based on that loss of income: (1) the reason for the loss of income; (2) if there’s been a loss of employment what efforts has the supporting spouse put forward to be reemployed in their same field, or what efforts have they put forth in seeking employment in an alternate occupation or line of work; (3) whether the supporting spouse is making a good-faith effort to find employment not just in their field and not just at their prior level of income; (4) the supported spouse’s income and circumstances; (5) what, if any, impact each party’s health has on their ability to obtain employment; (6) any severance package or award received by the supporting spouse in connection with their loss of employment; (7) any other changes in the party’s financial circumstances from the date of the alimony order to the date the modification of alimony is being sought – i.e., have there been enhanced earnings or other financial benefits which have accrued to either party; (8) whether the court should fashion a temporary remedy while the supporting spouse seeks continued employment; (9) any other factor the court deems relevant in fairly deciding the application for relief.

Timing of Application

The new law sets a 90 day barrier in front of the supporting spouse before they can even file an application for relief based on loss of work or reduction of income. Prior to the enactment of the new law the timelines before which it would make sense to file an application were variable. Each judge had their own rules and way of approaching the job loss issue. By setting a uniform 90 day delay the law provides for consistency in the timing of applications for relief. Strategically, the party seeking relief should not only use that 90 day window to aggressively attempt to find work, they should also document all of their efforts in great detail (i.e., keep records of resumes sent, headhunters and recruiters contacted, informational interviews pursued and attended, training taken, etc.).

Self-employed Persons

The new law requires a self-employed person to present the court with two analyses: (1) An analysis of the economic and non-economic benefits that they received from their self-employment prior to their reduction in income, and (2) an analysis of their economic and non-economic benefits that they receive from their business after their loss of income.

If you have questions about the impact of job loss or salary loss on the payment or receipt of alimony don’t hesitate to contact me to discuss your situation. I’ve been practicing law for over 20 years primarily representing clients in northern New Jersey, including: Bergen, Essex, Hudson, Union, Passaic, and Middlesex counties. You can call me at 201-731-3086, (toll-free 844-431-3380) or email me using the contact form. Whichever format you use to contact me your initial consultation is free of charge.