Danika Beaulieu – March 2020
The COVID-19 outbreak has drastically affected everyone’s lives. In Nova Scotia, schools and daycares have been closed, people traveling outside of the country or the province must self-isolate for 14 days, social gatherings of more than five (5) people are prohibited, provincial parks and beaches are closed, and people have been ordered to stay home as much as possible and practice social distancing. However, arguably one of the biggest effects of the novel coronavirus is the financial uncertainty it has created not only for Nova Scotians but for all Canadians.
The coronavirus pandemic has caused closures of many workplaces across the country, and most businesses that remain open have had to change the way they operate in order to abide by the recommendations or orders of the Chief Medical Officer of Health. This has resulted in a significant increase in unemployment as well as a reduction in income for a lot of people who remain employed. In fact, Prime Minister Trudeau announced on Wednesday, March 25, 2020, that nearly one million Canadians had applied for Employment Insurance in the last week alone. That is an astronomical amount of people who now find themselves without a regular income stream.
For individuals paying or receiving child support or spousal support, a parent or ex-partner becoming unemployed or having their employment hours reduced creates a huge financial blow. This not only affects the payor who now faces child and spousal support obligations they may no longer be able to meet (along with all of their other monthly expenses), it also affects the recipient who often relies on the support payments they receive from the payor in order to support themselves and their children.
What happens if a payor is laid off or their income is reduced?
As in any other non-coronavirus-related case, if an individual becomes unemployed or if their income decreases through no fault of their own (for example, they are not willingly under-employed or unemployed), it may be considered a material change in circumstances that could result in a variation of a support order in accordance with their new (reduced) level of income. A reduction in income does not mean that the support obligation no longer exists. It simply means that the quantum of support may need to be varied accordingly.
If you have been laid off by your employer, or expect a reduction in income due to the pandemic, which would not allow you to continue to make the support payments you have agreed to or have been ordered to make, you should have an honest conversation with the recipient of the support payments as soon as possible. You should let the recipient know your current circumstances, whether you have applied and/or been approved for any benefits, and try to reach an agreement on the quantum of child or spousal support payments to be made, at least on an interim basis. You can have these conversations on your own or enlist the help of your family law lawyer to do so.
Usually, if an individual is seeking a variation in support payments and is unable to reach an agreement with the other party, they could file a Variation Application with the Court and ask a judge to make a determination on the amount of support to be paid. However, as a result of the coronavirus outbreak, the Court is not addressing or scheduling any non-urgent matters at this time. Support issues have been deemed to be non-urgent.
If an Application for child support is filed with the Court, the parties may be able to attend conciliation. However, if they are unable to reach an agreement at conciliation, they will need to try to negotiate an agreement or consider another alternate dispute resolution process.
The parties should keep in mind, however, that even though the Courts may not be scheduling non-urgent matters at this time, if they are unable to reach an agreement and support payments must be addressed through the Courts at a later date, the reasonableness of the positions they take during the pandemic could be a factor that the Court would consider when determining prospective or retroactive support.
Are unemployment benefits considered to be income for support purposes?
Yes. The Federal Child Support Guidelines specifically includes employment insurance, social assistance, a pension, worker’s compensation, disability payments, and so on as a source of income from which support can be paid. Therefore, if you are seeking a reduction in support payments, you will need to provide information about any benefits you may have applied for and/or been approved for. This information is relevant and necessary to determine whether support should be varied and, if so, to calculate the amount of support you may be required to pay.
Since the pandemic commenced, the federal government has announced numerous ways it is prepared to help Canadians affected by the coronavirus pandemic. In addition to announcing new benefits for which Canadians can apply, Prime Minister Trudeau has also announced an intention to increase the Canada Child Benefit in order to assist parents.
Some of the benefits for which Canadians can apply are as follows:
• Employment Insurance (“EI”);
• EI Sickness Benefits; and
• Canada Emergency Response Benefit.
The latter was announced by the Prime Minister on Wednesday, March 25, 2020, and is supposed to help Canadians who have lost their jobs, got sick, are under quarantine or have to stay home due to school closures. It is also supposed to be available for wage earners, contract workers and self-employed people who don’t qualify for EI. More information about these programs can be found at the following websites:
https://www.canada.ca/en/employment-social-development/corporate/notices/coronavirus.html
https://www.cbc.ca/news/politics/trudeau-income-supports-covid19-1.5509247
Will the Maintenance Enforcement Program (“MEP”) continue to enforce support payments?
I recently had a conversation with a representative of the Maintenance Enforcement Program to ask this exact question and was informed that yes, MEP will continue to enforce support payments. However, they understand the current situation and they intend to take a reasonable approach to determine the enforcement measures that are appropriate in the circumstances, on a case-by-case basis.
MEP understands the pandemic has affected a lot of people’s incomes, but they also understand people still require support payments in order to support themselves and their children, and they want to ensure that people do not try to take advantage of the situation to reduce their support payments. Therefore, if anyone is concerned about their ability to make their support payments, they should reach out to their Enforcement Officer to inform them of their situation, and provide them with as much information as possible in order to come up with a plan that is suitable in the circumstances. Such information should include providing a Record of Employment confirming they have been laid off or an explanation as to why their income has significantly decreased (for example, if the payor is a surgeon and all of their surgeries have been cancelled, they should provide a letter from the hospital confirming same), as well as any attempts they may have made to apply for Employment Insurance or any other benefits that may be available to them.
In the event the payor has been successful in reaching an interim agreement with the recipient regarding a reduced amount of support, both parties should reach out to their Enforcement Officer to confirm the agreement that was reached in order to ensure MEP does not take any enforcement measures.
MEP is currently in the process of developing policies to address the maintenance of support orders during the pandemic. Stay tuned for the release of these policies.
If you have recently been laid off or are expecting a reduction in income and are concerned about your ability to maintain your support payments, please do not hesitate to contact an MDW Law lawyer at info@mdwlaw.ca or 902-422-5881. We understand that these are difficult and unprecedented times, and would be happy to assist you in any way possible.