What is Spousal Support?
From the perspective of a family lawyer, Spousal Support is an entitlement paid by one person to the other spouse in cases of divorce and Separation. There are various reasons to pay spousal support:
- To help a spouse become financially independent.
- Compensate one spouse for being financially disadvantaged during the relationship.
- Share the costs of caring for children.
- Prevent a spouse from experiencing serious financial difficulty due to the breakdown of the relationship.
Importance of Understanding Spousal Support
Spousal Support is the amount paid by the higher-earning spouse to the other person who is financially weak. As per the Chief Justice of Mc Lachlin of the Supreme Court of Canada “the primary purpose of [spousal support] payments, under the basic social obligation model, is to replace lost income that the lower income spouse used to enjoy as a partner to the marriage union.”
The Legal Framework
There are two statutes under which spousal support is governed i.e., the Divorce Act and the Family Law Act. If you are married and have been divorced or under the process of getting divorced, then you may apply for spousal support under the Divorce Act.
Divorce and Spousal Support
Spousal support is not an automatic part of divorce or separation.
You and your spouse can either
- Negotiate spousal support payments as a part of a separation agreement,
- Ask a judge to decide, if you cannot agree, and they will determine the amount of support and long it should be paid.
Eligibility Criteria
There are different ways through which eligibility can be assessed.
- If you are married
- have lived together for not less than three years.
- are in a relationship of some permanence and have a child together.
Duration and Amount
Various factors are considered while calculating pay spousal support like entitlements and other factors unique to each case. Once it is decided that a spouse is entitled to get financial support, the next question that arises is how much and how long the support is payable.
In determining the quantum of the support, courts and lawyers rely on the Spousal Support Advisory Guidelines (SSAGs). It is important to keep in mind that SSAGs are a useful tool used by the courts and lawyers dealing with family law.
The duration of spousal support can be for a limited period or continue indefinitely until circumstances change. The time will be determined by the financial conditions, needs, means and circumstances of the spouses.
Family Law Act
As per section 29 of the Family Law Act (FLA), even if you are not married, you can be defined as “Spouse”. In a situation, when you are people are not married and cohabiting together for three years, then they would be governed under the Family Law Act. Section 33 of FLA gives the court the authority to order a person to provide support for his or her dependents and determine the amount of spousal support in Canada.
Property Division/Equalization of Net Family Property
In Ontario, property acquired during a marriage must be split equally when a marriage ends for any reason. This can include you:
- Home
- Car
- Business
- Furniture
- Pension
- Money
For property that you owned before the marriage, any increase in value is usually divided equally. This applies to the family home where you lived with your former spouse.
You must share the full value of the family home, even if:
- One of you owned the home before you got married
- You received it as a gift
- Inherited it
To effect, this sharing, money owed to either spouse is called an equalization payment, or an equalization of net family property.
Types of Spousal Support
There are three types of spousal support which are granted during divorce or separation
- Temporary support
- Permanent support
- Rehabilitative support
Temporary Support
Parties are usually not required to wait for spousal support until their divorce is finalised. It can be worked out immediately once you are separated from your partner.
It works for the betterment of both of the spouses if there is a written agreement to that effect. In a situation, where spouses do not agree with spousal support, then they generally go to the court to decide upon the same.
Permanent Support
Permanent Support is also known as Long Term Support. It usually lasts when the marriage lasts for more than 10 years and if the judge concludes that the dependant spouse won’t go back to work and needs the permanent support of the other spouse.
It usually comes to an end in two situations (i) if either the recipient or the payor dies. ii. When the recipient remarries.
Rehabilitative Support
Rehabilitative Support is also known as Short Term Support and bridge-the-gap support. It is usually ordered when the marriage is quite short and lasts only a few years. The main purpose of Rehabilitative support is that the spouse is retrained and gets back to work. The dependent spouse is responsible for diligently pursuing the education and then getting back to work.
Reimbursement Support
Reimbursement Support is usually granted to the dependent spouse for the scarifies he/ she has made towards career advancement, education, and training, by taking up any odd job to support the family, while the other spouse is trained for a lucrative professional career.
Factors Influencing Spousal Support
Chapter 9 of the SSAG guidelines provides for the list of factors in determining the duration and amount of spousal support.
- The strength of any compensatory claim
- Recipient’s need
- Age, number, needs and standard of living of children (if any)
- Needs and ability to pay to the payor
- Work incentives for the payor
- Property division and debts
- Self-sufficient incentives.
Length of Marriage
Duration of marriage is one of the important factors for deciding the spousal support. It usually ranges from six months to one year for each year of marriage. However, it will be indefinite if the marriage is 20 years or longer in duration.
Financial Contribution
There are two formulas to calculate spousal support in Ontario. i. Without formula and ii. With formula. There are different software available for calculating spousal support formulas depending on the various factors. It is always advisable to seek the help of a legal professional to calculate an accurate amount.
Contact us online to request a consultation at info@kozyrevlaw.ca
Childcare Responsibilities
In Canada, children’s financial responsibility has more emphasis on the spouse. The with-child formula used to calculate spousal support is based on the Individual Net Disposable Income (INDI) for both parties.
- For the payor, this amount is The Guidelines Income amount- child support- taxes and deductions + government benefits and credits.
- For the recipients, this amount is Guidelines Income amount- notional child support- taxes and deductions + government benefits and credits.
Health and Age
Health is one of the deciding factors as it can affect your ability to financially support yourself as well as your spouse. Spouses who suffer from chronic conditions and suffer from long-term injury heavily rely on the medical system. The Court takes into account all these factors while deciding the spousal support.
Not just this, age can also influence a person’s capacity to pay the dependent spouse. The courts consider a person’s age which reduces employability or otherwise prevents them from supporting themselves.
Employment Status
The Courts while deciding on a divorce take into account the reasons of job loss and other factors governing the job of the paying spouse. In a situation, where one person loses the job due to poor behaviour or deliberately quits the job amidst a divorce, then the paying spouse would still be held accountable. However, if the job loss occurs due to layoff, then the court would be lenient towards them.
How to apply for Spousal Support
Spousal Support does not become an automatic part of divorce or separation. It is usually negotiated between the parties and made part of the separation agreement. If in case spouses do not reach a consensus, then, the duration and amount of spousal support can be decided by the court.
Legal Procedures
Spousal Support payments can be negotiated between the parties and made part of a separation agreement. If case of disagreement between the parties, the judge can be requested, they will determine the amount and duration of the support.
Financial Disclosures
To assess the financial positions of the spouse, they are required to disclose their assets, and liabilities at the date of marriage, on the date of separation and present value. Disclosing accurate and correct information puts both the parties on same economic footing.
Mediation vs. Court
For amicable settlement, Mediation is one of the most significant ways to come to a consensus concerning spousal support, property divisions, child and spousal support, and custody. Spouses are usually free to choose various mediation available to negotiate the terms of the separation agreement. However, they can always go to court in case they are unsatisfied.
Benefits of Mediation
It is always advisable to go for mediation before going to court as it has multiple benefits. Some of them are mentioned herein below:
- Less time consuming more efficient.
- Cost-effective.
- It is empowering and fair.
- Less stressful
When to opt for Court
The role of the courts comes into the picture, when parties are unable to reach to consensus and make a separation agreement.
Tax Implications
Spousal payments paid according to the agreements or court orders are tax deductible by the payer.
All spousal support payments made by the court orders or written agreement are taxable in the hands of the recipient.
Modifying Spousal Support
Various factors can change the payor’s ability to pay and the dependent spouse’s financial need. Here are a few factors:
- An unforeseen change in financial circumstances for either party, including job loss or a significant increase or decrease in income;
- Remarriage of either party;
- A disability or illness affecting the payor or recipient; or
- Retirement of the payor.
It can also be varied in case both parties consent to the change by way of filing a Motion to Change.
Circumstances for Modification
As per SSAG, there are various factors which can change in the spousal support:
- The payor’s income is reduced.
- Increase in Recipient’s income
- Change from imputed income
- Post-separation income of the payor increased
- Post-separation income reduction of the recipient
- Delayed claims
Legal Process for Modifications
In cases of change of the child and spousal support obligation or alimony amount, both spouses need to file a motion with the same court that granted you divorce. Along with it, you will also be required to file various documentation that details your financial information.
- Income
- Debts
- Expenses
- Assets
Common Myths and Misconceptions
Myth 1: Spousal Support is Permanent
As mentioned above, Spousal Support is not permanent, it varies with the change in the circumstances. Various factors can influence spousal support i.e.- Remarriage of either party, the retirement of the payor, disability illness etc.
Myth 2: Only Women receive Support
Spousal Support is an amount that is being paid to the dependent spouse by the other spouse. The courts consider various criteria for whether to administer spousal support, however, the gender of the spouse requesting the support is not one of those criteria.
Myth 3: No Support if cheating occurred
Cheating or adultery is one of the grounds for divorce, however, it does not affect the spousal support in any way.
Case Studies
Case Study 1: High-Income Couple
In a situation where you are a high-income earner in your relationship, you could be subject to court order to pay out spousal support. There are various factors which the court will consider while deciding spousal support:
- Length of marriage
- Difference in income between the spouses
- Ability to regain financial independence.
- Age of recipient
- The interest of children involved.
- Post separation, increase in income
- Calculation according to SSAG.
Case Study 2: Short-Term Marriage, No Children.
In cases of short marriages, marriages of less than 5 years, the without child support formula generates very small amounts for a very short duration. The formula will always generate time limits in these cases.
Example
Karl and Beth were married for only four years. They had no children. Beth was 25 when they met and Karl was 30. When they married, Beth was a struggling artist. Karl is a music teacher with a gross annual income of $60,000. Beth now earns $20,000 per year, selling her work and giving art lessons to children. Entitlement is a threshold issue before the Advisory Guidelines apply. On these facts, given the income disparity and Beth’s limited income at the point of marriage breakdown, entitlement is likely to be found.
The conditions for indefinite (duration not specified) support do not apply and duration would be calculated based on .5 to 1 year of support for each year of marriage.
To determine the amount of support under the formula:
- Determine the gross income difference between the parties:
- $60,000 — $20,000 = $40,000
- Determine the applicable percentage by multiplying the length of the marriage by 1.5-2 per cent per year:
- 1.5 X 4 years = 6 %
- to
- 2 X 4 years = 8 %
- Apply the applicable percentage to the income difference:
- 6 per cent X $40,000 = $2,400/year ( $200/month )
- to
- 8 per cent X $40,000 = $3,200/year ( $267/month )
Duration of spousal support = (.5-1) X 4 years of marriage = 2 to 4 years
The result under the formula is support in the range of $200 to $267 per month for a duration of 2 to 4 years.
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