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The Basics of Spousal Support
Spousal support rights and obligations can apply to both married and common law couples. In a common law relationship, a party may have a right to spousal support if:
a) They have a child or children together; or,
b) They have been cohabiting for a period of more than three years.
According to section 15.2(6) the Divorce Act, spousal support awards should:
a) Recognize any economic disadvantages or advantages to the spouses arising from the marriage or its subsequent breakdown;
b) Apportion between the spouses any financial consequences that have arisen from caring for any child of the marriage in excess of any obligation for the support of any child of the marriage;
c) Relieve any economic hardship borne by the spouses, which arises from the breakdown of the marriage; and,
d) In so far as is practicable, promote the economic self-sufficiency of each spouse in a reasonable period of time.
While adults are expected to take care of themselves and become self sufficient following the breakdown of a relationship, there are often factors and consequences of the relationship which may leave one party at an economic disadvantage. For example, where one party forgoes career opportunities or advancements in education in order to maintain the home and be a stay-at-home parent, they may serious impediments to their future financial self sufficiency.
Generally, if one spouse is unable to support himself or herself or if there is a significant difference between the income of the parties, the lower-earning spouse may have a claim for spousal support from the higher-earning spouse. Subject to any agreement between the parties, based on current case law a spouse who is not able to maintain a standard of living commensurate to the accustomed lifestyle upon the breakdown of marriage is likely entitled to support. Although the Spousal Support Advisory Guidelines, commonly referred to as the ‘SSAG’, are not mandatory, they are often considered by judges in cases involving claims for spousal support.
The duration and quantum of spousal support is dependent on many factors, including but not limited to:
a) The length of the marriage;
b) The age and health of the recipient on the date of separation;
c) The effects of the relationship on the recipient’s career and education opportunities; and,
d) The employability of the lower-earning spouse.
Lump Sum Spousal Support
If sufficient resources are available spousal support may be paid from one spouse to another in lump sum form. This has the advantage of allowing the parties to have a clean break. A lump sum may also be appropriate if the payor spouse presents a high risk of defaulting on ongoing payments.
Lump sum spousal support is not taxable in the hands of the recipient and it is not tax deductible to the payor.
The Basics of Child Support
Dependent children have a right to child support from their parents.
The courts may require a person who is not the biological parent of a child, but who has stood in the place of a parent, to support that child.
Child support is mandatory in Ontario. The parent with whom the child primarily resides is entitled to a basic or a Table amount to compensate him or her for money spent on the day-to-day care of the child. The Table amount is determined on the basis of two factors: the income of the payor (the person who is paying support) and the number of children that he or she has. Each province and territory has a separate Table in order to determine this amount. The applicable Table is the one for the province in which the payor is resident at the time of the application or at the time of determination if the payor has moved. If the payor resides outside of Canada, the applicable Table is the one for the province in which the recipient parent ordinarily resides.
In addition to the basic amount, a parent may have an obligation to pay for section 7 expenses, (also known as special expenses), for the child. According to section 7(1) of the Federal Child Support Guidelines, examples of some of these expenses include the portion of the medical and dental insurance attributable to the child and expenses for post-secondary education.
In addition to the expenses listed above, the Guidelines also identify “extraordinary expenses”, being extracurricular activities for the children. One of the issues regarding extraordinary expenses is that it is difficult to ascertain the nature and extent of those expenses considered ordinary and captured in the tabled amounts as against those that are extraordinary.
Once an expense is deemed to be extraordinary or special, the court must determine who pays what share of the expense. The guiding principle is that the expense is to be shared by the parties in proportion of their respective incomes. If the child is able to contribute to an extraordinary expense, the court will likely order that the child do so.
There are exceptions to the above-noted scheme of child support. For example, if a parent earns more than $150,000.00 annually, judges have the discretion to depart from the presumptive Table amount. In this case, the parent seeking an order that departs from the Table amount bears the onus. The lifestyle of the family when it was intact is a relevant consideration in this determination. However, the court will not easily deviate from the Table amount. According to Francis v. Baker, income must greatly exceed the $150,000.00 threshold before a court will depart from the Table amount.
In addition, children may be entitled to benefit from increases to a parent’s income that occurred post-separation.