Coronavirus And Job Loss: What You Need To Know
April 3, 2020 • By Elizabeth J. Billies
During the week of March 28, 2020, a record 6.48 million people filed claims for unemployment benefits, many as a result of layoffs and business closings due to the coronavirus. Did you or your co-parent experience coronavirus job loss? Are you wondering (or worried) about how this unexpected unemployment will affect your child support obligation?
Don't worry, you aren't alone. I have had more and more clients contact me about their support award each week. Most of those calls have been from parents who pay support. However, I expect that I will start to receive calls from clients who aren't getting support because the other parent that pays is no longer working.
Are you worried about how your child support may be affected by coronavirus job loss? You aren't alone. Even celebrities have been filing to lower their child support due to loss of work. Not sure what you should do? Should you file to modify the support order now or should you wait?
Don’t worry. Dischell Bartle Dooley has your back! Read on for the answers to your most frequently asked questions about child support when you or your co-parent have experienced coronavirus job loss.
What should you do if your coronavirus job loss is temporary?
Were you or your co-parent temporarily furloughed because your company is closed due to Pennsylvania’s stay at home orders? When your job loss is only temporary (i.e. a few months), you are going to need to evaluate whether it is worth your time to go through the effort to modify your support obligation, particularly if you will need to do so through the court system.
What does this look like?
In general, if you are paying child support through the court system, you will need to file a Petition to Modify. This is presenting some challenges. Most of our courts and domestic relations offices in Pennsylvania are closed or operating on a limited basis. Therefore, filing such a petition, and, more importantly, having it heard quickly, is proving difficult.
However, you may still want to file such a petition to be safe and preserve retroactivity, as we are all uncertain as to how long this pandemic, and thus your job loss may last. What do I mean by retroactivity? Let me explain.
In Pennsylvania, a support order is modified back to the filing date of the petition. Therefore, even if you file a petition now but don't have it heard for a month or so, the order will be modified back (i.e. retroactive) to that filing date. This can give you some much needed (albeit belated) relief.
Still not sure if filing a petition to modify is worth your time if your job loss is temporary? If so, I suggest that you contact one of the attorneys at DBD to discuss your situation and review the child support calculations to see what your new award would be given your income from other sources or unemployment benefits. It is important to know whether (and how much) your temporary job loss will affect your support obligation before making the effort to file something with the court system.
What should I do if my coronavirus job loss is permanent?
If your coronavirus job loss appears to be permanent or, has no actual end date like many furloughs do, you should likely file a petition to modify your support obligation. Again, even if it takes a while to work its way through the court system, you need to file that petition to preserve the retroactivity and ultimately have the order changed. The longer that you take to file, the longer you are paying support at a rate that you can't afford.
However, remember that your children need to eat too. Therefore, it is still your responsibility to do everything that you can to find work to supplement this lost income. I know that they may sound harsh given the current uncertain economic and health climate, but it is not any harsher than the domestic relations office is going to be on you.
So, what should you do to make your best case for a modification if your coronavirus job loss is permanent?
Most importantly, make sure that you are doing all the you can to find alternate employment. Are grocery stores in your area hiring extra staff? Are there any online positions that you can apply for? Even if you are unable to get these jobs, the court will want to see that you tried.
Why is this so important?
In general, a court is not going to find that your support obligation is zero unless you are disabled. Similar to anytime that you are unemployed, the domestic relations office will want to see copies of job applications and correspondences with potential employers to confirm that you are doing all the you can to find work and pay your child support obligation during this period. As such, make sure that you save this information, as well as any correspondences from your previous employer, for the support conference. The more you can show that you looked for work, the more likely your modification will be successful.
How does unemployment compensation affect child support?
Unemployment compensation is presently available for those that have lost their jobs (either permanently or temporarily) due to the coronavirus. Are you or your co-parent eligible for unemployment compensation because a coronavirus job loss?
If so, it is important that you file as soon as possible. Why? Pennsylvania is seeing a record number of filings for benefits for coronavirus job loss. As such, there may be a delay in receipt of benefits. The sooner you file, the sooner you start getting money. It's that simple.
Also, the sooner you know how much you will be receiving in benefits, the sooner you will know whether it is in your interest to file a petition to modify your support award. As I said above, courts will often modify your award back to the filing date, not when you lost your job. So, delaying your filing for those benefits could ultimately be delaying your own relief.
Remember, unemployment compensation is considered income available for support. Therefore, a court will consider what you are eligible for when determining your support obligation (whether you are collecting or not) when you have no other income. Again, if they are going to consider it anyways, might as well actually be collecting!
I am a business owner. What should I do if my business is closed or has lost money because of the coronavirus?
Determining the income for a business owner is tricky, even under normal circumstances. Why? In general, when determining a business owner's income available for child support, the court will look at the business owner's income for the entire year, not just one or two months.
Again, why? Well, depending on the industry, many business owners take minimal draws on a weekly or bi-weekly basis and then pay themselves distributions (which are generally much larger sums) on an annual or quarterly basis. Thus, looking at a small snapshot of income is generally not representative of how much money the business owner is going to make for the entire year, particularly if they don't have set schedules for distributions.
Therefore, it is probably going to be difficult to argue that your business income for the year will be down when the year is not yet completed. The other side can always argue that you will make the money back up in the later months when the pandemic has subsided. While this argument may be speculative, it is also speculative to say that you will not, leaving the court with little guidance as to what to do.
Therefore, in order to present the strongest case possible, it is likely in your best interest to wait at least a few months or, ideally, until the end of the year, to determine if a support modification is right for you. As always, contact the family law attorneys at DBD to discuss your specific circumstances.
If you are a small business owner, you may be eligible for certain loans to keep your business open during this time and supplement your lost income. If you plan on filing a Petition to Modify support, it is probably a good idea to show the court that you have applied for these loans. Again, the court will want to see that you are doing everything you can to avoid income loss.
I have a health condition that prevents me from working during the coronavirus. Can I file a Petition to Modify?
A client presented me with this exact issue last week. He works in the healthcare industry but has a heart condition that would put him at grave risk should he contract the coronavirus. As such, he is not going to be working for three months until it is safe for him to return to the hospital. He cannot work from home. Does this scenario apply to you?
In order to modify your support obligation under these circumstances, I suggest that you do the following:
See if you are eligible for short term disability or other short term medical leave benefits to supplement your lost income, at least in part;
Get a letter from your physician stating why you cannot work during the coronavirus outbreak; and/or
Obtain documentation from your employer as to your last date of work and, if applicable, that they do not want you to work at this time because of the health risk.
This exact situation is new and largely untested. However, I think that your request for modification is more likely to be successful if you can provide the court with some or all of the above. Again, the more that you can show that your lost wages are not your fault and that you are doing everything you can to supplement your losses, the more likely that the court will modify your support award.
So, what should you do if you experience coronavirus job loss?
I'm not going to sugarcoat it, this is tough stuff. We are all navigating uncharted territory. However, I suggest that if you do lose your job during this time that you do the following:
Before filing for a modification, first decide whether it is worth your time (and aggravation and legal fees) and will actually make a significant impact on your support obligation;
Keep documentation for all jobs applied to as well as any correspondences with your previous employer indicating why you were laid off;
Make sure to file for unemployment benefits ASAP;
If you can't work during this time because of health issues, make sure you look into short term disability or other medical leave benefits that can supplement your income;
Apply for small business loans to supplement lost business income if eligible; and/or
Consult an attorney about whether a modification filing would be successful, particularly if you are a business owner that receives the majority of their income on a quarterly or annual basis.
While you don't want to rush into filing something that will do more harm than good, you do want to procrastinate on this issue. Get your numbers together and make sure to consult our attorneys at Dischell Bartle Dooley before making any decisions.