The effects of the COVID-19 have been many, with one of these being the finances of every individual no matter what their financial status is. It creates a ripple effect. An excellent example of this is for those that have the responsibility for paying child and spousal support.
General Rules
The general rule is that amounts to being paid for the child and spousal support is based on the income of the higher paid individual. The courts generally follow a chart for determining payments for child support. While this may seem like a simple way to determine fair payments, it is far from that. There are so many extenuating circumstances that apply to each individual that a table of payments does not always result in a fair payment schedule.
There is supposed to be some flexibility in these payments every year. Determined by the changes in finances that take place with the previous year’s tax returns. However, most couples never pursue this every year. Only because it usually going back to court to have the orders changed. An added expense for the pursuant and one that they are not comfortable with. As a result, the payments may remain the same year after year.
The second part that plays an essential role in child support may be the award for payment that is based on special and extraordinary circumstances.
Changing The Order
Changing a court order for child and spousal support is no easy task. The responsibility for doing this lies on the party that wants the change, which is usually a reduction. For this to even be considered by the courts, a material change must have taken place. This is where it becomes extremely difficult to prove this. This change means looking at the original order. If at that time, the change that is taking place now was considered at the time of the original order, then it is not likely it will hold any power now. If there was something foreseen during the original order and it was dictated that if that change did take place, the order was to be changed, then it’s a different story.
The other aspect is if a change is granted, this is not temporary as it now becomes a permanent order.
The Time Factor
Even if an individual clears all these hurdles concerning getting an order for support changed chances are they at looking at several years before it will be heard before the courts. This is due to the massive backlog. In the meantime, the payments must remain the same. This is another deterrent for those who are thinking of taking their case before the courts.
An Interim Court Order
For those who are involved in an interim court order, things are a little different. They do not have the responsibility of meeting the threshold for material change. The stumbling block here is the Judge will not vary an interim order but will advise that the case being taken to trial asap.
The Current Situation
With all the layoffs that COVID_19 virus is causing, it is no doubt causing material changes in the finances of those that have to pay support. For those who are paying their spouses directly, many have simply stopped paying. Now the responsibility is on the recipient spouse to take this before the courts to get an order for this to be paid through the courts. (Family Responsibility Office) No doubt, there is going to be a huge backlog once the courts resume their normal activities again.
Dire Conditions
Now for those who are already paying through FRO, many are in dire conditions. The government is allowing them to collect UIC or opt for other financial relief programs. Still, these are subject to an automatic reduction of the support payments that are in place. The amount taken can be up to 50% of their relief payments. So for an individual that is getting $2000. a month in relief payments, 50% of that is going towards the support payments. Leaving that individual with $1000. A month to live on. The average rent is $1,000 a month, so it’s easy to see the dire situation this is putting them in.
To make it worse, the offices responsible for overseeing these payments is closed, so there is no way the payors can approach FRO to have their payments temporarily reduced. This is a lose-lose situation.
The Recipient
It also has to be kept in mind that the recipient of the support payments is not likely to be in any better situation. They, too, most likely have lost their jobs, and are depending on one of the relief programs. If they are not receiving their support payments, then it is dramatically reducing the money they need to live on. This is the snowball effect of the COVID-19.
Can Anything Be Done?
There is not likely anything that can be done that is going to create an immediate solution. Those that are paying the support can take the matter to their member of parliament, so this can be identified as a serious problem. The government is doing its best to address serious financial difficulties. For the recipient, most of these parents are getting a little extra help from the government, aside from the relief payments.
Another Option
Another option may be to try and work something out with the recipient. If they are co-parenting and have a good relationship, then chances are some type of temporary agreement can be made. Unfortunately, there are many circumstances where couples are not amicable, and they are not able to agree. In this case, there is no recourse.
Conclusion
Stopping payments is an option but one that will likely come with a lot of consequences. The recipient may decide to cut visitation rights because the paying party is not honouring their obligations. This may not be allowed by law, but again it means having to take it before the courts, which still means facing the long and lengthy waits which are only going to be far worse.
If you are dealing with tax issues regarding your support payments or are not sure how this affects your tax situation please be sure to contact me at 416-398-1700 as I may be able to help.
