Hillary Moonay of Obermayer Rebmann Maxwell & Hippel (Photo: Courtesy Photo)

While the loss of a job may often affect the support obligation that one party has to pay to the other, there may be unique considerations in the time of a pandemic. Over the last several months of the COVID-19 crisis, more than 2 million Pennsylvanians have filed for unemployment compensation. With many people losing jobs or being furloughed, the ability to find a new job is almost impossible right now. As a result, job loss for those individuals who have support obligations is extremely stressful. The same is true for people who receive child support or spousal support as they rely on such support payments to pay their own bills.

Many companies such as those who service mortgages, student loans, and credit cards have suspended or deferred payments to assist consumers due to pandemic-related financial difficulties. However, the same is not true of support obligations. In fact, individuals who receive a stimulus check under the CARES Act will likely have those checks garnished to pay child support arrears. While this might seem counterintuitive to the purpose of a stimulus check, Pennsylvania places a high priority on reducing delinquent child support accounts and this is simply another way to decrease outstanding obligations.

• Will courts assess individual earning capacity differently for COVID-19-related job loss?

Considering all of the above, many clients are anxious about what this means for their support obligations. Will an individual still be assessed a specific earning capacity due to job loss as a result of COVID-19 if the market for their skills is essentially shut down? For example, let us consider a restaurant owner who has historically had a profit from his business of $50,000 per year that was considered as income for support purposes. Clearly, based on the restrictions imposed by shutdown and shelter in place orders, this person's income is likely to be significantly decreased in 2020, if not for years longer. Additionally, it is unlikely that in the current economic atmosphere, other employment opportunities would provide a restaurant owner with a greater income. In a situation such as this, many courts will recognize that a reduction in income is involuntary and, as a result, reduce the support obligation. However, it is to be expected that the court will carefully scrutinize individual circumstances before modifying an existing support order.

Another issue of concern to many clients is if they will face contempt proceedings as a result of their inability to meet a support obligation due to income reduction or job loss. In order to best avoid a contempt finding, clients should be advised to file for a support modification based upon the reduction in income as soon as it happens. Regardless of whether the reduction is temporary due to a pay cut or furlough or more permanent due to a job loss, the process is the same.  In most cases, a support modification will be retroactive only to the date that an individual files for a reduction. In order to avoid contempt concerns, filing to reduce a support obligation as soon as a payor's income decreases will be the most effective way to achieve this goal. Further, since support obligations are income-driven, even short-term reductions in income would generally result in a modification of a support order.

• How will overburdened court systems manage increased support modification requests?

As more and more individuals experience unemployment and job reduction, the courts in the commonwealth are expected to be overburdened by increased requests for support modification conferences and hearings. This is apt to tax an already stretched court system that is now facing a backlog of cases due to lengthy court closures and reductions in staffing due to COVID-19. As a practical matter, courts may be forced to consider how often to schedule certain cases with varying changes in income. For example, if a person receives a 15% pay reduction for six months, he should be entitled to a reduction in his support obligation. However, to effectuate this reduction—and the later increase back to pre-pandemic salary level—multiple court filings and appearances could be required. First, the payor would have to file for a support reduction at the time of the decrease in income. Then, if his pay increases six months later, the payee would technically have to file for an increase in support payments.

To avoid multiple filings and court proceedings, one option would be for the court to enter an order that reduces the payments for the specific period of the reduction in income and then automatically increases the payment amount upon the expiration of the time period. While this option is likely to be efficient, if the payor's income does not bounce back to pre-pandemic levels as planned, then a subsequent court filing and proceeding will still be necessary to halt the increase that is set to occur in the earlier court order. Another option some courts are considering is to wait to hold the court proceeding until after both the income reduction and subsequent increase have both occurred. Assuming the filing for a reduction occurred at the time of the decrease in salary, any decrease would be retroactive to the filing date. However, a support proceeding would not be held until the payor's income was expected to return to normal levels. Then, at that time, the overall support obligation can be "trued up." One significant problem with this option is that with a salary reduction the individual may not be able to make the obligated support payments while receiving reduced income. In turn, this could result in court-issued contempt proceedings which simply leads the parties right back to the situation that everyone was trying to avoid.

• Do unemployment compensation benefits matter for support purposes?

If an individual has filed for unemployment compensation as a result of a job loss, this income will be considered for support purposes. So, if a client is receiving substantially the same amount of unemployment compensation benefits as they were from job earnings, a modification filing would not be necessary. Additionally, due to numerous unemployment compensation assistance programs resulting from COVID-19 shutdowns, many individuals are receiving greater unemployment benefits than they previously would have been awarded. Further, certain COVID-19-related programs are providing unemployment benefits to those who traditionally would have been ineligible such as self-employed workers and independent contractors. One thing to be aware of is that while the traditional unemployment benefit system interfaces with the Pennsylvania Department of Human Services State Collection and Disbursement Unit (PA SCDU) to garnish unemployment compensation benefits for support obligations, the temporary unemployment assistance programs are not similarly arranged. Therefore, if a person paying support is accustomed to having their support obligation automatically deducted from their traditional unemployment compensation benefits, they should be aware that this is likely not the same from the COVID-related unemployment programs. As a result, a payment might have to be made directly to PA SCDU to avoid falling behind on support obligations that may result in contempt proceedings.

Overall, the expectation is that for at least the duration of 2020, and perhaps into the year 2021, the county domestic relations sections will be handling an increased number of support matters, particularly modifications. This, combined with the need for social distancing and reduced staffing in these offices could make waits for conferences and hearings longer than normal. However, as reductions will generally be retroactive to the filing date, clients should be assured that their case will be properly considered even if it takes more time than usual to get there.

Hillary J. Moonay is a partner at Obermayer Rebmann Maxwell & Hippel. She focuses her practice exclusively in the area of family law, where she handles all phases of the negotiation and litigation of domestic relations cases, including divorce, child custody, child support, alimony/spousal support, equitable distribution, prenuptial and postnuptial agreements, mediation, arbitration, and related issues.