We have not heard the word “unprecedented” used more than we have over the past eight months, however, it is arguably the most accurate word to describe the trying times we have faced and are likely to continue to face for some time. There has been little course for us to follow and consequently, the pandemic has largely impacted our finances and income and many are not able to meet financial obligations. As a result, the court has been overwhelmed by applications to vary Financial Agreements between parties.
As family lawyers during this pandemic, we have received many enquiries from clients who are not able to maintain their financial obligations and are not sure what to do. We firstly recommend that clients make contact with their former spouse in an endeavor to reach an agreement between themselves. This has largely been successful, however, there are some instances where a party to an agreement has been forced to apply to the court to vary the agreement or set the agreement aside in circumstances where an alternate arrangement cannot be reached.
Most recently, a Family Court Judge was asked to determine whether a Binding Child Support Agreement (that is, child support payments) should be set aside due to the impacts of COVID-19. Pursuant to section 136(2)(d) of the Child Support Assessment Act, the court may set aside a Child Support Agreement if the court is satisfied that exceptional circumstances (relating to the applicant or subject child) have arisen since the Agreement was made and that the applicant or the child will suffer hardship if the Agreement is not set aside.
In this case, a father owned a business that supplied products to international businesses. Due to the COVID-19 pandemic, travel restrictions have been placed upon the international sector as well as all States and Territories within Australia. The father’s business (and by default, his financial circumstances) were significantly impacted by approximately 90% as a result of the pandemic. He therefore brought an application for a Binding Child Support Agreement to be set aside on the basis that his income was not what it was at the time he entered into the Agreement in April 2012.
Consequently, the court was satisfied that the outbreak of the COVID-19 pandemic was an exceptional circumstance and that the father would suffer financial hardship if the Agreement was not set aside. It is important to note that the court gave consideration to suspending the Agreement for a period of time, however, given the uncertainty surrounding the likely duration and impact on the future conduct of the father’s business as a result of COVID-19, the Judge could not determine whether the father’s business would recover in the future sufficient for the father to meet his child support payments under the Agreement.
If your income has been significantly impacted as a result of COVID-19 and you are unable to meet your child support obligations, please contact the Family Law Team at Rostron Carlyle Rojas Lawyers for further advice.