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In-Kind Income: In or Out For Child Support?

By David A. Beaver

As a family law practitioner, my clients are often faced with the issue of whether or not In-Kind Income is to be included for purposes of establishing child support.  The inclusion of In-Kind Income to a child support calculation can have a significant impact on the total overall support amount that is registered for the support of your children. 
 

For purposes of any analysis, it is important to start with the definition of In-Kind Income.  Per the New Jersey Court Rules, In-Kind Income is established as 'the fair-market value of goods, services or benefits received in lieu of wages and in the course of employment'.  The Court Rules further distinguish these goods, services or benefits must be derived from employment, self-employment or the operation of a business.
 

Common examples of In-Kind income would include employer paid vehicles, automobile insurance, housing allowances, meals, memberships and vacations.  It should be noted that expense reimbursements are not considered income under the Court Rule definition.
 

When this issue surfaces in my cases, I make it a point to examine the true nature of the benefit that is being asserted as In-Kind Income.  I find this issue most often arises when a client owns his or her own business.  For example, if Mrs. Smith owns her own business and runs the operation from the a personal residence, it is important to do some research into what percentage of the residence is utilized for business purposes and what percentage is utilized for personal utilization.  A valid argument could be made that the percentage that is assigned for personal usage should be applied to the total mortgage number and added back to the child support calculation.  For illustration, if the total mortgage for the property is $2,000 per month and the house is assigned a 50/50 business to personal ratio, an argument could be made that $1,000 per month of income could be added back as income to Mrs. Smith.
 

When the issue of In-Kind Income is present in your litigation, it is important to make sure that the appropriate discovery is requested to properly defined each possible employer benefit.  Most corporations have employee handbooks that may be useful in defining the parameters of their benefit programs that would include allowances for vehicles, travel other non-wage benefits that are afforded to their employees.
 

When one, or both parties are involved in a personal or closely-held business, the proper expertise is necessary to ensure that any and all income sources are included in a support calculation.  When these scenarios arise, it is recommend that you seek the assistance of a experienced matrimonial counsel to guide you through the process.

David Beaver is a Member of Stark & Stark's Divorce Group in the Lawrenceville, New Jersey office. For questions, please contact Mr. Beaver.

Full post as published by New Jersey Law Blog on June 11, 2012 (boomark / email).