How does COVID-19 impact my support payment?
The impact of COVID-19 is extensive. Even those lucky enough to avoid becoming infected or having a friend or loved one become sick may still experience emotional and physical reactions ranging in severity. At the forefront of many people’s concerns are the current and long-term financial implications stemming from COVID-19.
With hundreds of thousands of Michiganders suddenly jolted from a robust economy and finding themselves furloughed, temporarily laid off, or experiencing some other version of unemployment or underemployment, worries over how to support themselves and their families are prevalent. Such worries include the potentially inevitable eventual inability to pay court-ordered child and/or spousal support.
Many are feeling the economic impact of COVID-19, and this is likely to continue for the foreseeable future, even after “shelter in place” orders and social distancing requirements have lifted. This is nothing to be embarrassed or feel ashamed about, and it cannot be ignored. Both payors and recipients of child and/or spousal support need to be realistic, reasonable and cooperative as much as possible. It is most cost-effective when parties work together towards a viable economic solution for their family.
Support payers need to avoid the temptation to use their unemployment status as a reason to reduce support if they are able to somehow pay it. Similarly, child/spousal support recipients need to avoid the temptation to resist a reduction in support if it is based on the reality of a change in the payer’s income. Everyone should do their part to mitigate the potential damage to the overall family’s financial circumstances to the best of their ability, and try to assume best intentions whenever that is possible.
If history between you and your partner is so difficult that all trust is lost, carefully select an attorney or mediator to help you navigate these issues.
Mitigating the financial impact of unemployment
Tip #1: The Stimulus Check
The Federal government is issuing stimulus checks to assist with the financial implications of the COVID-19 global pandemic. Many payments have been dispersed. Individual Michigan residents who earn less than $75,000 per year are eligible to receive up to $1,200, plus an additional $500 for each dependent child. Couples who filed their taxes in 2019 (or 2018 if 2019 has not yet been filed) using the filing status, “married filing jointly” with a combined income of less than $150,000, are eligible to receive up to $2,400, plus an additional $500 for each dependent child. Here is more information on the 2020 COVID-19 stimulus payment.
If you and your spouse have filed for divorce but are living together and pooling money, you will likely deposit your stimulus check into a joint account and use it to pay joint bills (or split it in half when you separate).
If you and your spouse are living separately and/or are maintaining separate finances and the stimulus check is received by one party, the recipient should - and will likely be legally obligated - to divide the stimulus funds equally with the other spouse, including those funds received for minor children.
Remember, while the COVID-19 Aid, Relief, and Economic Security (CARES) Act suspends overdue student loans and back taxes that would normally result in the garnishment of tax refunds, this temporary suspension does not apply to child support arrearages. If you are behind in your child support payments, your stimulus check will likely be intercepted and used to pay overdue child support.
Tip #2: Apply for Unemployment
The CARES Act, which took effect on March 27, 2020 recognized that our workforce has changed, and many people rely on the “gig economy.” Congress therefore expanded the eligibility requirements to include self-employed individuals, “freelancers”, independent contractors, and low wage earners with a limited employment history. The CARES act also increases the amount and duration of the benefit, including Pandemic Unemployment Assistance (PUA), which provides another $600 in Federal benefits besides the maximum $362 in state benefits.
Further, on April 22, 2020, Governor Whitmer signed a new executive order that temporarily expands those eligible for unemployment benefits to include individuals who cannot work due to familial responsibilities, compromised immune systems, and first responders required to quarantine due to exposure to the virus. The April 22nd order also removed the requirement for those collecting unemployment to provide proof of continued job search efforts.
If you are unemployed, you can file a claim for unemployment through the Unemployment Insurance Agency (UIA) website or via telephone at 1-866-500-0017. This is also a great resource for additional up to date information on filing for unemployment. Unemployment is considered income for support.
If you make your support payments through the Michigan Disbursement Unit (MiSDU), your support obligation will be automatically reduced based upon your unemployment check provided you accurately referenced your support obligation in your unemployment application. If you and the support recipient have opted out of Friend of the Court services, and you pay the recipient directly, until a court order is entered modifying your child support obligation, you are still required to make the full payment each month to the recipient. If you move to modify your child support obligation, the court will consider the unemployment you receive as income for support calculation purposes.
Tip #3: Petition for a Modification of Support Immediately
Support is retroactively modifiable only to the date in which you serve the recipient with your properly filed and noticed petition/motion for a modification of support – not to the date in which you had a reduction of income. It is therefore critical that you file your petition when your income is reduced to preserve your full retroactivity rights. This is also most fair to the support recipient, as he or she will be on notice that the money they are now receiving may need to be paid back, and should not be spent.
Agreeing to modify support
If the recipient and the payor of support can agree on a modification of support, get that agreement to writing. Once that is done, follow up with a new Uniform Child Support Order, which must be entered with the court handling your child support.
Moving to modify support
If the recipient and payor cannot reach a viable resolution, and the current court-ordered support is no longer feasible for the payor, or sufficient for the recipient to make ends meet, the party requiring modification should file a motion with the court soon to preserve a retroactive date as close to the alleged change in circumstances warranting a modification of support. Although child support is a typically a product of a set formula established by law, courts are legally permitted under certain circumstances to deviate from the formula. Spousal support is supposed to be determined by a laundry list of factors, and is modifiable by law: however, remember that non-modifiable spousal support orders are just that – non-modifiable – so the court is unlikely to change the amount or duration of support if both amount and duration are non modifiable
To best assess your likelihood in prevailing on a motion to modify support during these uncertain times, contact an experienced family law attorney. Good lawyers are here to help during these difficult times.