Managing Your Support Order in the Face of Decreased Earnings

No one is immune from the realties of today’s economy. Since the economic downturn I have had a number of inquiries from clients regarding their Child Support Order if they are laid off or are receiving support payments from a payor who has been laid off.

First, if you pay support and you experience a decrease in your income due to a layoff, a decrease in the number of hours you are able to work, or a reduction in your salary and/or bonuses, your monthly child support obligation could be reduced. Under the Pennsylvania Support Guidelines, a payor’s support obligation is based on the parties’ combined monthly net incomes. If your monthly net income decreases, it is likely that your support obligation will decrease as well, provided that the payee has not had a decrease in his/her income and child care expenses have not changed. It’s advisable to contact an attorney to assist and advise you about recalculating your support obligation using your most recent paystubs, unemployment statements or 2008 W-2’s.

It’s important to remember that reductions in support obligations, whether due to a layoff or other circumstances, also affects the amount of support a payee can depend on receiving each month. This will affect a payee’s ability to meet his or her monthly expenses, including housing, clothing and food. It may become difficult for the payee to maintain his or her (and the children’s) standard of living and impact the extent to which the payee and/or the children can participate in activities outside the home.

Given the state of the current market conditions, it is unlikely that a Court would hold a payor to a prior earning capacity if his or her source of income is no longer available for reasons beyond his or her control. For example, if a monthly support Order is based on the payor’s income as a car salesman and the payor no longer is able to sell the number of cars that he sold at the time the Order was entered, his income will decrease. It would be very unlikely for the Court to hold the payor to his or her prior earnings, when the current trend indicates that car sales have been seriously declining. Likewise, the argument that the payor could seek comparable employment with a similar income is diminished in light of the unemployment rate and lack of jobs available.

If your income has decreased as a result of a layoff, reduced work hours, etc., a review of your Support Order may be justified. Regardless of whether you pay or receive child support, if you have experienced a decrease in your income due to the current market conditions and strains placed on your employer or your company, you should speak with an attorney to discuss and advise you about the appropriateness of filing and pursuing a modification of your Order.