How Will New Jersey Support Obligations Be Affected by COVID-19?
By: Vito Colasurdo, Jr., Esq., Counsel
In a week’s span, COVID-19 dramatically changed our lives. Most of us are living in isolation. It is now cool to be a hermit and the most common words currently being used are “social-distancing” and “self-quarantine.” The Centers for Disease Control and Prevention (“CDC”) and the World Health Organization (“WHO”) are recommending that people “shelter in place”, calling for those who can to work from home. The essential steps we are taking to limit the spread of the coronavirus (“flattening the curve”) have had unintended consequences on the global economy.
The instant decline of the stock market caused by the coronavirus was unprecedented. The Dow Jones Industrial Average plummeted 35% from its highest level in mid-February 2020 and now sits 4.5% lower than pre-Trump presidency levels.
The workforce was equally inflicted by the extreme, necessary measures to flatten the curve of the spread of the coronavirus. The need to socially distance and the qualification of what is an “essential business” will affect how New Jersey does business for the foreseeable future. The lucky were forced from their workplaces to work from home. The unlucky, however, either had to close their small businesses or lose their jobs.
Businesses small and large are being forced to ask difficult questions to survive the coronavirus pandemic. The unemployment rate is expected to be at its highest in 40 years. Forecasts for job losses to occur in April 2020 range from 500,000 to 5,000,000. We are living in unprecedented times and no one knows how long the era of social distancing and self-quarantining will last. The optimistic predict June 2020. Those more conservative say it will last another 18 months, well into late 2021.
From a family law perspective, who will this most affect? The answer: those with support provisions in their Marital Settlement Agreement/Final Judgment of Divorce. The coronavirus will drastically impact those either paying or receiving alimony or child support if the payor of the support suffers a substantial loss in income. Those seeking or defending what are called “changed circumstances” motions for loss of income must understand the nuances involved with such applications. These applications are governed by N.J.S.A. 2A:34-23. A downward modification of support application cannot be filed until the payor has been unemployed, or has not been able to return to or attain employment at prior income levels, or both, for a period of 90 days. Any application must be accompanied by the Marital Settlement Agreement/Final Judgment of Divorce, the Case Information Statement filed at the time of the divorce, and a current Case Information Statement.
For W-2 wage earners who lose their employment, it is imperative that a spreadsheet or log of job search applications and contacts during the job search process be kept to annex to an application. For self-employed individuals, in addition to showing the involuntary reasons for the decline in income, the application must include an analysis that sets forth the economic and non-economic benefits the payor receives from the business both now and at the time of the entry of the support order.
Individuals who have pendente lite support obligations face a host of other considerations that are considerably complicated by the potential or real impact of the coronavirus on their income. We are certainly dealing with a new normal both socially and economically as a result of the pandemic. During this time, it is important that everyone be safe and as informed as we can be as we wade into uncharted territories. Please check back for updates on how the coronavirus could affect family law matters as the situation develops or call me directly at (732) 631-8315.