By: John P. Paone, Jr., Esq. and John P. Paone, III, Esq.*

It goes without saying that parents with children have a financial responsibility to support their children. When parents separate or divorce, it often falls to the court to determine the correct amount of that financial responsibility, or as called in the law, child support. In New Jersey, families having a combined net income of $187,000.00 per year or less, have their child support calculated pursuant to the New Jersey Child Support Guidelines (NJCSG). The NJCSG is essentially a sophisticated computer program that determines child support based on statistical information about child rearing expenses, coupled with the income of the parties and the custody/parenting time arrangement. While courts have the authority to deviate from the NJCSG, most litigants accept the child support award determined by the program.

However, for higher income parents who exceed the $187,000.00 net per year threshold, the determination of child support is far more complicated. Rather than looking at a chart, the court is faced with determining an appropriate level of child support based on the reasonable needs of the child and other factors. What exactly constitutes the “reasonable” needs of a child can often provoke complex litigation.    

Earlier this year, the New Jersey Appellate Division provided some answers to this question in the unreported decision of Ianniello v. Pizzo.  In Ianniello, the parties had two children during their marriage of 11 years. As part of their divorce proceedings in 2011, the parties entered into a Marital Settlement Agreement which provided that the father would pay $10,000.00 per month in child support to the mother for the support of their two children.  The father was a high-end corporate executive whose earnings and lifestyle increased substantially after the divorce. The father’s average income was approximately $22 million per year following the divorce.  He also enjoyed many perks and benefits as part of his employment including a private jet, stock option awards, and a multi-million dollar home in California where he would frequently stay when he was on business.  With regard to personal amenities, the father had memberships for a private country club as well as an exclusive ski and golf resort in Montana. 

As a result of the father’s elevated financial status following the divorce, the mother filed a post-judgment application to increase the child support upwards from $10,000.00 per month to $75,000.00 per month. The mother claimed that she needed increased child support to purchase a larger home in a gated community (double the size of her current home, which was already valued at $2.6 million). The mother also sought increased child support to purchase a vacation home in the Hamptons, a family membership at the Westchester Country Club, World Series tickets and an annual European ski vacation. Although the trial court recognized the father’s ability to pay increased child support based on these requested items, the judge determined that there was no basis to modify the initial child support obligation.  In arriving at this conclusion, the trial court noted that the mother had failed to offer any evidence as to how the children’s reasonable needs were not being met with a budget of $10,000.00 per month.

Upon the mother taking the matter up on appeal, the New Jersey Appellate Division affirmed the ruling of the trial court.  The appellate tribunal explained that in considering the level of child support, a balance must be struck between assessing a child’s reasonable needs and avoiding a situation where there is windfall to a parent (in this case, the mother).  Moreover, the appeals court made clear that while reasonable needs for higher income families may include non-essential expenses for the children, it should not be viewed as an open-ended “wish list” for the parent who is seeking the child support.  In this case, the Appellate Division indicated that there was no proof that the children were deprived of any items or expenses based on the child support which the father had been paying.  In fact, it was clear that the children were reaping the benefits of their parents’ financial resources insofar as they were residing in multimillion dollar homes, taking four expensive vacations per year, and had the privilege of being enrolled in camps, sports, and other expensive recreational lessons.

Ianniello instructs parents that it is not enough to simply look at the significant increase in a parent’s income to modify a child support obligation. Rather, especially when ability to pay is not in issue, the guiding principle to be followed is determining the reasonable needs of the child.  Reasonable needs and the level of child support can vary greatly based on a child’s activities (e.g., horseback riding; ice skating; hockey; etc.) education (e.g., private tutors; special classes; private school; etc.) and health issues. While a court may not be offended if a custodial parent receives some “incidental benefit” from the child support, if it appears that the items requested for the child will primarily benefit the custodial parent, the court will not allow this windfall. Therefore, it is necessary to outline each expense and have a complete explanation as to why each expense is needed in the best interest of the child.

The determination of child support in cases where the income of the parents exceeds the limits of the NJCSG is fact sensitive.  No matter how affluent one parent may be or how extravagant their lifestyle is post-divorce, this does not guarantee an increase in child support if the child’s needs are being sufficiently met by the child support already in place.  Parents must carefully review the needs and expenses of their children to formulate a budget which justifies the level of child support being requested.  If you are a parent who is paying or receiving child support in a case which is above the NJCSG, you should contact an experienced family law practitioner who can advise you as to how much is appropriate child support in your matter and how much is too much.

*John P. Paone, Jr., Esq. and John P. Paone, III,  Esq. are divorce and family law attorneys with the Law Offices of Paone, Zaleski & Murphy, with offices in Red Bank and Woodbridge.