As we enter the uncharted territory of the COVID-19 pandemic, the implications of the virus changes everyday life as we know it. As the stock market plummets, supply chains are interrupted, workers are furloughed and/or laid off, the implications of the novel coronavirus go well beyond what the pandemic means for individual portfolios. The most vulnerable in our society –those in need of family supports, such as child and spousal support may be hit hard.
Child support is one of the largest sources of income for families. According to the National Conference of State Legislatures, nationwide, the child support program serves one quarter of all U.S. children and half of all U.S. children in poor families—totaling 17.5 million children. Research shows it reduces child poverty, promotes parental responsibility and involvement and improves children’s educational outcomes. Fifty percent of all marriages end in divorce, and many women, especially mothers with children, fall into poverty after divorce. As the COVID-19 spreads, this group may become the silent victims of this contagion.
In almost every state, child support and spousal support is tied to the income of the parties. Should that income diminish due to reduced work and layoffs, or dissipate completely as a result of job terminations, support payments can change radically. Payments may dry up if pay checks disappear. Payors with reduced income may ask for downward modifications in their support orders. Payees who receive support and were working at the time an order was entered may lose a job, and be unable to replace it through support, if the payor also has lost income. The ramifications are broad, and might affect the day to day survival for many.
At Bookspan Family Law, LLC we meet many of you at a vulnerable time in your lives. Our goal is to help you through life transitions and ease your way to a better future. Foremost in our minds now is the health and well-being of you —our clients, our friends and colleagues. I am continuously reviewing and assessing the recommendations and requirements of applicable state, local and federal authorities, as well as the World Health Organization and the CDC, to implement necessary precautions and protective steps. As we face the coronavirus global pandemic together, I want to assure you that we are continuing to work for you.
A note about financial obligations such as child and spousal support and alimony…
If you have lost your job, and or been temporarily laid off, it may affect your support payment (obligation and or receipt). In Pennsylvania, parties who either pay or receive support have a statutory obligation to report to Domestic Relations a change in financial circumstances As we have not faced before anything like coronavirus and the interruptions in work and financial security it may bring, we may be in uncharted waters. However, if you are laid off for a significant period of time, or lose you job, this is a change in circumstance that should be reported. Alimony payments also may be affected. Depending upon how alimony was provided for in your property settlement agreement, it could be impacted by a recent financial change. Please let us know if this is the case, and we will evaluate any next steps with you. For further discussion on financial security and cCvid-19, and a financial webinar, see more information below.
Child support is determined by a formula in Pennsylvania. This formula can be found in the Pennsylvania Child Support guidelines. Support generally is based upon determinable factors, such as: each party’s income or earning capacity, contributions to care, payment for health insurance, and the amount of overnights the child(ten) spend with a parent. Other factors may also affect the amount of child support. What constitutes income is defined in the Pennsylvania Code at 23 Pa.C.S.A. §4302. When the Pennsylvania legislature enacted guideline provisions to determine the amount that parents are responsible to pay to support their children, it was with the intent to create uniformity and reduce conflict around this issue. Yet, child support remains a hot button for many. In part, this is because even with guidelines, there remain grey areas about what income may be available for support, thus affecting what one parent may owe the other.
Remarried Parent May Have More Income to Support Children
For single parents sharing custody and support with a parent who has remarried, the burden may feel unequal. In certain circumstances looking into the lifestyle of the remarried parent, particularly what he/she pays for in the new marital residence, can support the basis for a request for higher child support. In a recent opinion, the Pennsylvania Superior Court allowed the single parent to receive an upward calculation to child support because Father had greater ability to support his children than what the guidelines would provide given his earning capacity. The court found that all of Father’s income was available for support. The guidelines take into consideration living costs and expenses, and generally only use the after tax income of the child’s parents and not the income of step parents. However, the law does permit the court to include other household income.
In the case of J.P.D. v. W.E.D.. 114 A.3d 887 (Pa. Super. 2015), the parents initially disputed the earning capacity of Father. Father’s expert testified that his earning capacity was $45,725. and Mother’s expert testified that Father’s earning capacity was $70,833. The Court credited Father’s expert on earning capacity, but gave an upward deviation to Mother that was greater than 100% of actual child support guideline amount, based upon testimony at the trial that Father’s new wife paid all the household bills and expenses.
Father’s new wife had an annual income of approximately $1,000,000. Father did not pay for any of his own expenses, including mortgages, car payments, utilities or entertainment. The re-married father’s new wife had full control over household expenses and provided for all of father’s needs. Father and his new wife owned the house in which they lived, a weekend getaway house, and another property to be developed. Father leased a Cadillac for $940 a month and traveled and vacationed frequently. The Court found that since Father’s new wife provided for all of Father’s needs, all of his income was available for child support for his two children from the previous marriage. As a result, his child support order was for twice the amount ordinarily calculated under the guidelines. Continue Reading