What if I Cannot Make a Child Support Payment Due to COVID-19?
The economic consequences of the COVID-19 pandemic are far reaching and continue to have far reaching impacts on our lives.
Large numbers of Australians have lost their livelihood, with many facing ongoing concerns and uncertainty in relation to job security which is in turn creating financial pressures on families. As a result of this, some may be experiencing difficulties in meeting, not only their business and living expenses, but also their child support and spousal maintenance commitments.
The amount of child support that parents pay or receive is calculated based on income and how much time each parent spends caring for the child. If your income or care arrangements for your family have changed due to COVID-19, it is important that you seek advice to best understand your options and where you stand so that you can make well-informed decisions about how to proceed.
If you have an informal agreement in place, it may be best to communicate directly with your former partner, informing them of any difficulties you are having in contributing to child support payments. An open and frank discussion is one that is least likely to lead to the necessity for parties to engage solicitors or the Child Support Agency.
Binding Child Support Agreements
If you have a binding agreement in place requiring you to make child support payments, it is important to seek legal advice regarding your situation as soon as possible.
The relevant legislation when making an application to the family courts to have a binding child support agreement (“BCSA”) set aside is section 136(2) of the Child Support Act.
To be successful in having a BCSA set aside, you must satisfy the court that:
- There are exceptional circumstances that relate to a party or child in relation to the agreement;
- Those exceptional circumstances arose after the agreement was made; and
- That the applicant or child will suffer hardship if the agreement is not set aside.
The implications of the COVID-19 pandemic in respect of an application to set aside a BCSA were considered in the recent case of Martyn & Martyn  FamCA 526.
In this matter, the father owned and operated a business that supplied products to international businesses, and it was accepted that activity for the business had been reduced by approximately 90% due to COVID-19.
Although the father had issued proceedings well before COVID-19 (he filed his Initiating Application in 2016) it was found that “had it not been for the outbreak of the COVID-19 pandemic, the Court would not have been satisfied, on the basis of the evidence presented, that the father’s business was in such dire financial circumstances that it established the existence of exceptional circumstances…” and ultimately, the agreement was set aside.