COVID-19: Will Your Rescue Package Be Considered Income For Child Support?

Dickinson, Mackaman, Tyler & Hagen, P.C.
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Dickinson, Mackaman, Tyler & Hagen, P.C.

The novel coronavirus has taken the world by storm. 

With the recent Proclamation of Disaster Emergency signed by Governor Reynolds, many businesses and recreational facilities were ordered closed for at least two weeks to try and mitigate the community spread of the coronavirus. Restaurants are prohibited from dine-in services but can provide drive-thru, carryout, and delivery. Bars, gyms, and theaters were ordered to close. With the closure of many of these businesses, families are beginning to feel the economic pinch of these closures, not just in Iowa but all across the country, which is why Congress is currently working on a $1 trillion rescue package that would direct payments of anywhere from $1,000 to $1,200 per person or $2,400 per couple to American families in an effort to prevent a recession.

For those involved in family law proceedings that involve children and child support, one may be wondering whether they are entitled to claim any portion of their ex-spouse’s $1,000 or $1,200 rescue package.

According to Rule 9.5, a party’s net income from all sources is considered when calculating child support. Generally, items such as federal and state income taxes and social security and Medicare tax deductions are not included in the income calculation. Those who cannot work due to a medical condition receive social security disability payments which is included in that parent’s net monthly income calculation during the period in which the benefit is received. For those people who are low income and are 65 years of age or older, blind, or disabled, they receive supplemental security income, which is not considered when calculating a party’s net income because it is considered public assistance.

Arguably, the rescue package could be considered akin to social security disability payments in that the $1,000 or $1,200 (whatever it may be) payment was received by a party because they were unable to work. Or it could be akin to supplemental security income because it is considered public assistance.

This is obviously new territory for family law practitioners and judges. However, Rule 9.5 also states that the needs of the children must have a higher priority than voluntary savings or payment of indebtedness so when deciding whether the rescue package will or will not be considered income for child support purposes, undoubtedly the courts will examine the needs of the children first.

Looking for more information on COVID-19 and Divorce? Read Attorney Regan Wilson’s blog, “I am Laid Off Due to Covid-19: Do I Still Have a Child or Spousal Support Obligation?"

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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