The Financial Impact of Coronavirus on Mothers and Children Receiving Child Support
March 20, 2020
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.
While we cannot predict the full impact COVID-19 will have on jobs and employment, we know that China has seen a marked downturn in productivity. China’s post-coronavirus GDP for the first quarter of 2020 is projected to fall to 2.5%, with a major projected slowdown of Chinese exports. As the manufacturing industry in United States is heavily reliant upon Chinese goods and raw materials, we can expect everything from car plants to camera distributors to be impacted. Moreover, as the United States’ response to containing the COVID-19 outbreak has been slower than China’s, we can expect to see far greater numbers of cases than those already in the population. Inevitably, Americans will face job layoffs and terminations.
Accordingly, there is little chance that support payments to the most vulnerable of our population, will go unaffected. State systems, thus far, are continuing to process support payments uninterrupted. However, as much child and spousal support comes through direct pay from employer withholdings if paychecks are eliminated, the impact on support could be immediate. A party who has a significant change in income has the right (and in most cases the obligation) to file for modifications of support orders. When support is based upon income guidelines, Courts will have little leeway to deny appropriate modification requests. It is unlikely that modification hearings will be scheduled while we are in the midst of the crisis; however, eventually, when processed support reductions may affect the lives of countless children, caretakers, and spouses.
A positive development is that Congress in The Families First Coronavirus Response Act just signed into law on March 16, 2020, provides funding of $1billion to states to process and pay Unemployment Compensation Insurance (UI). As Support Payors lose job income, UI benefits can be tapped to continue payments. Payors and payees have a duty to inform their domestic relations officers or attorneys should they begin receiving UI. Also helpful is that the Supplemental Nutrition Assistance Program (SNAP) requirements also were loosened, suspending the work and work training requirements for eligibility, and allowing states to request waivers to provide temporary SNAP benefits.
Governor Wolf ordered that all Pennsylvania business that aren’t life sustaining must close. The programs that provide child support payments are life sustaining, and all indications are that the agencies that process support will remain functioning. When things return to normal, it is likely that many modifications for support will start being heard, but parties should prepare for backlogs in hearing dates. In the meantime, we only can hope that payments continue uninterrupted for the most vulnerable.
If you have questions about Child and or Spousal Support, please give our office a call at 610 565-6200