Economic Impact of the Coronavirus Pandemic on Support Obligations

Without a doubt, the financial issues arising from the Coronavirus Pandemic and the resulting shutdown of businesses and “stay-at-home” order issued in Pennsylvania by Governor Wolf have had a major impact for many, including those with Support obligations,  as well as those who rely on those payments.

Under Pennsylvania law, courts follow the Pennsylvania Support Guidelines to determine the amount of support that a spouse or parent will pay based on the parties’ combined monthly net incomes and the number of persons being supported. Support guidelines are mandated by federal and state law. The Pennsylvania Support Guidelines allow for a modification of support any time one party experiences a material and substantial change in circumstances. Under Pennsylvania case law, the courts have deemed a change in income could be deemed a material and substantial change in circumstances that allows modification or termination of an existing support order depending on the circumstances of the case.

During this national crisis of the coronavirus pandemic, many individuals have experienced a change of income, a disruption of business and in many cases, loss of employment. If a payor or payee lost employment or have reduced income as a result of the mandated closures, it certainly may affect their obligations under a support order by changing the amount of child support, spousal support/APL or alimony received and/or paid.

In order to modify a support order, a party must file for modification with the court. The law in Pennsylvania allows modification to be calculated retroactively to the date of the filing of a Petition to Modify. Despite the court’s closures to the public (except  for limited operations including emergency matters), filing for modification of support can be done electronically. It is important to promptly file for modification, especially if the payor experiences a decrease in income or a loss of his/her job. Depending on the circumstances of the matter, it might be advisable to file for modification to preserve the date of filing as the effective date of the order when it is entered.

Despite the impact of the courts’ closures, the Pennsylvania State Collection and Disbursement Unit (“PA SCDU”) continues to process payments. If a payor has a support order but is unable to meet his/her obligation due to a change in income or unemployment, it is imperative to file for modification to avoid a later finding of contempt by the court and to mitigate the accumulation of arrears.

In evaluating a request for modification due to the loss of employment, the court considers the payor’s efforts to mitigate their inability to meet their support obligation(s). Given the current state of affairs, the individual shall immediately file for unemployment. An individual who has a support obligation but loses his/her job due to the coronavirus pandemic should also continue to search for comparable employment, and if unsuccessful, the individual should be documenting his/her efforts to present the same to the court at the appropriate time.  Given that the courts are not yet hearing these modification petitions, and the very unusual circumstances of this pandemic, it is unknown the extent to which the courts will consider the employment search.

Additionally, pursuant to the Consumer Credit Protection Act, 15 U.S.C. § 1673(b)(2), if the payor is over 12 weeks in support arrears, the maximum figure that can be deducted from a payor’s net income  is 55% of his/her net income. If the payor’s circumstances change requiring him/her to support another family beside the one subject to the support order, the total support obligations shall be capped at 50% of the payor’s net income as required by 15 USCS § 1673(b).

It should be noted that under the Coronavirus Aid Relief Bill recently enacted to deliver payments to help people during this pandemic, said payments will be offset by any past due child support payments owed to the states as reported to the Treasury Department. In other words, if an individual is overdue on child support, his/her cash payment from the federal government might be reduced or eliminated to first meet child support obligations.  Moreover, similar to wages from an employer, unemployment can and likely will be attached to pay any support obligations.

If you have a support obligation and would like to know more about the how the current unprecedented situation might affect that obligation, or if you are receiving support and have questions, contact an AMM Family Law attorney for a confidential discussion.