SENATE JUDICIARY COMMITTEE

 

STATEMENT TO

 

ASSEMBLY COMMITTEE SUBSTITUTE FOR

ASSEMBLY, Nos. 845, 971, and 1649

 

STATE OF NEW JERSEY

 

DATED:  JUNE 30, 2014

 

      The Senate Judiciary Committee reports favorably an Assembly Committee Substitute for Assembly Bill Nos. 845, 971, and 1649.

      This committee substitute amends N.J.S.2A:34-23 to modify the types of alimony that may be awarded, establish durational limits for alimony awards, and to enumerate certain factors concerning modification and termination of alimony.

      The committee substitute provides specific grounds for modification and termination when the obligor retires, loses a job or otherwise has a reduction in income, or when the obligee cohabits with another person.  The substitute also eliminates the phrase “permanent alimony” from the statutes and establishes the term “open durational alimony.”

      The committee substitute modifies the factors to be considered by the court in determining an alimony award by clarifying that when considering the standard of living established in the marriage or civil union and the likelihood that each party can maintain a reasonably comparable standard of living, neither party shall have a greater entitlement to that standard of living than the other.  In addition to the factors set forth in the current statute, the court shall consider the nature, amount, and length of pendente lite support paid, if any.

Types of Alimony and Durational Limits

      Under current law, the court may award the following types of alimony: permanent, limited duration, rehabilitative, and reimbursement.  Permanent alimony is awarded when the parties have had a lengthy marriage or civil union marked by economic dependence and contribution to the marriage or civil union. Limited duration alimony is awarded for a set period of time when it is determined that an award of permanent alimony is not warranted.  Rehabilitative alimony is awarded to permit a spouse or partner to obtain the training and education necessary to return to the workforce and enhance their earning capacity.  Reimbursement alimony is awarded to one spouse or partner for financial contributions made to the other spouse or partner’s education or professional training. 

      The committee substitute amends the statute to eliminate the requirement that the court must first determine that an award of permanent alimony is not warranted prior to awarding limited duration and other types of alimony.

      The durational limits established by the committee substitute provide that for any marriage or civil union less than 20 years in duration, the total duration of alimony shall not, except in exceptional circumstances, exceed the length of the marriage or civil union.  The committee substitute clarifies that a determination of the length and amount of alimony is to be made by the court pursuant to consideration of all of the statutory factors set forth in subsection b. of section 1 of the committee substitute, amending N.J.S.2A:34-23.  In addition, the court must consider the practical impact of the parties’ need for separate residences and the attendant increase in living expenses on the ability of both parties to maintain a standard of living reasonably comparable to the standard of living established in the marriage or civil union, with neither party having a greater entitlement to that standard of living. 

      Exceptional circumstances which may warrant deviation from the durational limits include:

      (1) The ages of the parties at the time of the marriage or civil union and at the time of the alimony award;

      (2) The degree and duration of the dependency of one party on the other party during the marriage or civil union;

      (3) Whether a spouse or partner has a chronic illness or unusual health circumstance;

      (4) Whether a spouse or partner has given up a career or a career opportunity or otherwise supported the career of the other spouse or partner;

      (5) Whether a spouse or partner has received a disproportionate share of the marital estate;

      (6) The impact of the marriage or civil union on either party’s ability to become self-supporting, including but not limited to either party’s responsibility as primary caretaker of a child;

      (7) Tax considerations of either party; and

      (8) Any other factors or circumstances that the court deems equitable, relevant and material.

      Retirement

      The committee substitute specifies that alimony may be modified or terminated upon the prospective or actual retirement of the obligor. 

Under the substitute, there shall be a rebuttable presumption that alimony shall terminate upon the obligor reaching full retirement age, except that any arrearages that have accrued prior to the termination date shall not be vacated or annulled.  “Full retirement age” is defined as the age at which a person is eligible to receive full retirement for full retirement benefits under section 216 of the federal Social Security Act (42 U.S.C. s.416).  The court may set a different alimony termination date for good cause based on specific findings of fact and conclusions of law.  The rebuttable presumption may be overcome if the court determines that alimony should continue after consideration of the following factors:

      (1) The ages of the parties at the time of the application for retirement;

      (2) The ages of the parties at the time of the marriage or civil union and their ages at the time of the alimony award;

      (3) The degree and duration of the economic dependency of the recipient upon the payor during the marriage or civil union;

      (4) Whether the recipient has foregone or relinquished or otherwise sacrificed claims, rights or property in exchange for a more substantial or longer alimony award;

      (5) The duration or amount of alimony already paid;

      (6) The health of the parties at the time of the retirement application;

      (7) Assets of the parties at the time of the retirement application;

      (8) Whether the recipient has reached full retirement age as defined in the committee substitute;

      (9) Sources of income, both earned and unearned, of the parties;

      (10) The ability of the recipient to have saved adequately for retirement; and

      (11) Any other factors that the court may deem relevant.

      If the court determines that the presumption has been overcome, then the court would apply the alimony factors set forth in subsection b. of section 1 of the committee substitute in order to determine whether modification or termination of alimony is appropriate. If the obligor intends to retire but has not yet retired, the court would establish the conditions under which the modification or termination of alimony will be effective.

      If an obligor seeks to retire prior to reaching full retirement age, the obligor would have the burden of demonstrating, by a preponderance of the evidence, that the prospective or actual retirement is reasonable and made in good faith.  Both the obligor's application to the court and the obligee's response to the application shall be accompanied by current Case Information Statements or other relevant documents as required by the Rules of Court, as well as the Case Information Statements or other documents from the date of entry of the original alimony award and from the date of any subsequent modification.

      In determining whether the obligor demonstrated that the prospective or actual retirement is reasonable and made in good faith, the court shall consider the following factors:

      (1) The age and health of the parties at the time of the application;

      (2) The obligor’s field of employment and the generally accepted age of retirement for those in that field;

      (3) The age when the obligor becomes eligible for retirement at the obligor’s place of employment, including mandatory retirement dates or the dates upon which continued employment would no longer increase retirement benefits;

      (4) The obligor’s motives in retiring, including any pressures to retire applied by the obligor’s employer or incentive plans offered by the obligor’s employer;

      (5) The reasonable expectations of the parties regarding retirement during the marriage or civil union and at the time of the divorce or dissolution;

      (6) The ability of the obligor to maintain support payments following retirement, including whether the obligor will continue to be employed part-time or work reduced hours;

      (7) The obligee’s level of financial independence and the financial impact of the retirement by the obligor upon the obligee; and

      (8) Any other relevant factors affecting the obligor’s decision to retire and the parties’ respective financial positions.

      If the obligor intends to retire but has not yet retired, the court shall establish the conditions under which the modification or termination of alimony will be effective.

      When an obligor filed an application for modification or termination based on retirement in which the existing final alimony order or enforceable written agreement was established prior to the effective date of the enactment, the obligor’s reaching full retirement age as defined in the committee substitute shall be deemed a good faith retirement age.  Both the obligor's application to the court and the obligee's response to the application must be accompanied by current Case Information Statements or other relevant documents as required by the Rules of Court, as well as the Case Information Statements or other documents from the date of entry of the original alimony award and from the date of any subsequent modification. In making its determination, the court shall consider the ability of the recipient to have saved adequately for retirement as well as the following factors in order to determine whether the obligor, by a preponderance of the evidence, has demonstrated that modification or termination of alimony is appropriate:

      (1) The age and health of the parties at the time of the application;

      (2) The obligor’s field of employment and the generally accepted age of retirement for those in that field;

      (3) The age when the obligor becomes eligible for retirement at the obligor’s place of employment, including mandatory retirement dates or the dates upon which continued employment would no longer increase retirement benefits;

      (4) The obligor’s motives in retiring, including any pressures to retire applied by the obligor’s employer or incentive plans offered by the obligor’s employer;

      (5) The reasonable expectations of the parties regarding retirement during the marriage or civil union and at the time of the divorce or dissolution;

      (6) The ability of the obligor to maintain support payments following retirement, including whether the obligor will continue to be employed part-time or work reduced hours;

      (7) The obligee’s level of financial independence and the financial impact of the retirement by the obligor upon the obligee; and

      (8) Any other relevant factors affecting the parties’ respective financial positions.

      The committee substitute provides that the assets distributed between the parties at the time of the entry of a final order of divorce or dissolution of a civil union shall not be considered by the court for purposes of determining the obligor’s ability to pay alimony following retirement.

Loss of Income

      When an obligor who is not self-employed seeks modification of alimony, the court shall consider the following factors:

      (1) The reasons for any loss of income;

      (2) Under circumstances where there has been a loss of employment, the obligor’s documented efforts to obtain replacement employment or to pursue an alternative occupation;

      (3) Under circumstances where there has been a loss of employment, whether the obligor is making a good faith effort to find remunerative employment at any level and in any field;

      (4) The income of the obligee; the obligee’s circumstances; and the obligee’s reasonable efforts to obtain employment in view of those circumstances and existing opportunities;

      (5) The impact of the parties’ health on their ability to obtain employment;

      (6) Any severance compensation or award made in connection with any loss of employment;

      (7) Any changes in the respective financial circumstances of the parties that have occurred since the date of the order from which modification is sought;

      (8) The reasons for any change in either party’s financial circumstances since the date of the order from which modification is sought, including, but not limited to, assessment of the extent to which either party’s financial circumstances at the time of the application are attributable to enhanced earnings or financial benefits received from any source since the date of the order;

      (9) Whether a temporary remedy should be fashioned to provide adjustment of the support award from which modification is sought, and the terms of any such adjustment, pending continuing employment investigations by the unemployed spouse or partner; and

      (10) Any other factor the court deems relevant to fairly and equitably decide the application.

      If the changed circumstances arise from the loss of employment, the length of time a party has been involuntarily unemployed or has had an involuntary reduction in income shall not be the only factor considered by the court, but rather the court shall determine the application based upon all of the enumerated factors, however, no application shall be filed until a party has been unemployed, or has not been able to return to or attain employment at prior income levels, or both, for a period of 90 days.  The court shall have discretion to make any relief granted retroactive to the date of the loss of employment or reduction of income.

      When a self-employed party seeks modification of alimony because of an involuntary reduction in income since the date of the order from which modification is sought, then that party’s application for relief must include an analysis that sets forth the economic and non-economic benefits the party receives from the business, and which compares these economic and non-economic benefits to those that were in existence at the time of the entry of the order.

      The court may establish a temporary remedy which may include: temporarily suspending or reducing support on terms established by the court; directing that support be paid in some amount from assets pending further proceedings; directing a periodic review; or entering any other order the court finds appropriate to assure fairness and equity to both parties.

Cohabitation

      Under the substitute, the court may suspend or terminate alimony if a payee cohabits with another person. Pursuant to the committee substitute, cohabitation involves a mutually supportive, intimate personal relationship in which a couple has undertaken duties and privileges that are commonly associated with marriage or civil union but does not necessarily maintain a single common household.

      When assessing whether cohabitation is occurring, the court shall consider the following:

      (1) Intertwined finances such as joint bank accounts and other joint holdings or liabilities;

      (2) Sharing or joint responsibility for living expenses;

      (3) Recognition of the relationship in the couple’s social and family circle;

      (4) Living together, the frequency of contact, the duration of the relationship, and other indicia of a mutually supportive intimate personal relationship;

      (5) Sharing household chores;

      (6) Whether the recipient of alimony has received an enforceable promise of support from another person within the meaning of subsection h. of R.S.25:1-5 (“palimony”); and

      (7) All other relevant evidence.

      In evaluating whether cohabitation is occurring and whether alimony should be suspended or terminated, the court shall also consider the length of the relationship.  A court may not find an absence of cohabitation solely on grounds that the couple does not live together on a full-time basis.

Effective Date:

      The substitute would take effect immediately and shall not be construed either to modify the duration of alimony ordered or agreed upon or other specifically bargained for contractual provisions that have been incorporated into:

      a.   a final judgment of divorce or dissolution; 

      b.   a final order that has concluded post-judgment litigation; or

      c.   any enforceable written agreement between the parties.

Committee Action

      As reported, this substitute is identical to the Senate Committee Substitute for Senate Bill Nos. 488 and 1808, also reported by the committee today.