After years of a booming economy, the coronavirus pandemic has wreaked havoc on our state and national economies. Non-essential businesses have been forced to close and millions have become unemployed. Many others who have held onto their jobs have had their hours or pay reduced. The pandemic has caused households to struggle financially and many are worried about how they will pay their bills and trying to determine how they can reduce expenses. What are the options to modify alimony and/or child support obligations if one or both parties has experienced a reduction in income or a loss income due to the coronavirus pandemic?
If one or both litigants cannot resolve the issue on their own, a lawyer and/or mediator can offer up assistance to resolve the matter. A resolution is going to require both parties to be reasonable and understanding. The person receiving support may need to be understanding of the obligor party’s financial distress and worry. The person paying support may need to understand that alimony and child support may represent all or most of the receiving party’s income and that party cannot apply for unemployment benefits to replace lost support. The matter is more significant when there are children that have to be cared and provided for, and that is paramount.
If the parties cannot come to an agreement, can the court offer relief? The courts have not been having hearings but for emergency matters, and financial disputes are generally not considered emergent. However, the courts in New Jersey have risen to the occasion and applications to modify support can be filed electronically. A Family Division judge can decide the matter based on the review of the papers alone if that is requested, or the judge can conduct oral argument, settlement conferences and the like via telephone and/or video conference. The courts are still open to conduct family law business.
There currently is not any reported case law to direct how family court judges are to handle coronavirus cases. Usually, alimony and child support cannot be modified unless there is a change in circumstance since support was last established. That change in circumstance warrant either an increase or decrease in support. A court will examine the income (earned and unearned) of both parties as well as their assets and determine if there has been a change in circumstance. A court will also consider whether unemployment and other benefits have been paid, and therefore, one should seek out such benefits where available. With the CARES stimulus package passed by Congress, which provides direct monetary payments to many households, and supplements New Jersey state unemployment benefits, as well as small business loans, some litigants may not be experiencing a significant change in circumstance because of the pandemic. Our case law, however, says that for alimony or child support to be modified, the change in circumstance has to be both substantial and permanent. In order for support to be increased or decreased, a temporary change in circumstance will not suffice, nor is a change in circumstance that is small or moderate.
New Jersey’s alimony statute provides that if a litigant has lost his or her job and that litigant is a W-2 wage earner, that litigant has to wait a minimum of 90 days after their job is lost in order to even make an application to modify support. N.J.S.A. 2A:34-23(k). That 90 day time frame is not stated in N.J.S.A. 2A:34-23(l), which relates to self-employed persons seeking a modification of alimony. Such litigants have to explain to court not only the reasons for their reduced income, but they must describe and demonstrate how the economic and non-economic benefits from their business has changed since support was last established.
Based on how modification of support cases are typically handled, an application to modify support based on the coronavirus pandemic would likely not succeed at this early stage. However, these are unprecedented times. The coronavirus pandemic has created extremely sudden and inordinately widespread economic difficulty to employees and businesses. These difficulties are likely not to be over soon, and it is not known how long it will be until life returns to normal. As such, it is likely that there are going to be numerous applications to the courts to address alimony and child support.
These matters are complex and fact sensitive. The office of James P. Yudes, A Professional Corporation is here to help you. Please contact our office for a consultation, which can be performed by telephone or videoconference if that is your preference.