The COVID-19 lockdowns and associated economic downturn and job losses have had a devastating impact on many workers and their families. Not least, those people going through a separation, are being affected by the uncertainty, the change in their own and their spouse’s financial circumstances, and lots of other issues around how to co-parent in these uncertain times.
Divorce is profoundly stressful at the best of times and that stress is augmented for families going through separation at the present time.
As we all know from the news, from the queues outside Centrelink, and from our friends and family’s own experiences, a large number of industries have been decimated by the COVID-19 social distancing measures. Many people have lost their jobs or their freelance work, and are struggling to survive day to day until government payouts come through – if they are entitled to them.
Spousal maintenance is often paid in family law matters by one party with much greater earning capacity to the other party with lesser earning capacity. Spousal maintenance agreements are documented and agreed over and above any property settlement or child support, are usually for a fixed term and are not easily overturned.
If you are the party who pays spousal maintenance to your ex-spouse pursuant to an Order and you have lost your income, it is important that you act quickly.
Ideally, you may be able to agree with your ex-spouse to vary the terms for the duration of the COVID-19 crisis. If this is the case then you need to record the variation to your agreement in writing, but you would then be able to avoid having to return to court. If you are unable to reach such an agreement, then you may need to bring an application to the Court to vary or discharge the Order. The Courts are still operating and are dealing with urgent applications such as these as they arise, usually by telephone hearing or video link, to comply with social distancing requirements. It is important that you engage with the courts if you are unable to pay your spousal maintenance and do not just unilaterally cease payment, as failing to pay maintenance pursuant to a court order will mean you are in breach of that order and consequences may follow.
If you are the receiving party of spousal maintenance and your former spouse can no longer pay due to having lost their job, you will most likely be struggling financially as well. If you can and if it is safe to do so, try and negotiate a reduced spousal maintenance amount with your ex-spouse, until they are able to regain employment. Other practical steps will include accessing government benefits, superannuation (take your accountant’s advice first) and rental reductions if possible, amongst other things.
A Child Support Assessment by the Child Support Agency is calculated on the relative incomes of both parties. It is likely to be affected by a loss of income of the payer or the payee. If an Assessment is in place, you should approach the Department about having your child support obligation re-assessed if you have lost your source of income.
If you have a Binding Child Support Agreement in place, you may not be able to avoid the liability to pay child support at the agreed level. You will still need to meet your child support obligations under the Agreement unless a loss of income was a ‘terminating event’ for the purpose of your agreement.
If you have lost your income and cannot meet your obligations under the Agreement you may need to make an Application to the Court to set aside your agreement. These applications are difficult and the Court will only set aside a Binding Child Support Agreement in certain circumstances.
If you find yourself in difficulties with Spousal Maintenance or Child Support at the present time and you require legal advice, call our Family Law team on 02 9982 1655 or contact firstname.lastname@example.org or email@example.com