FAQ: Spousal Support

Find out the answers to frequently asked questions ("FAQs") with regard to family law and other legal issues.

Spousal Support Award – When is high-range spousal support awarded? Part 2/2

Spousal Support Award – Factor 3/7: Age, number, needs and standard of living of the children

A child with special needs, or a young child, will usually require more time and resources from the care-giving parent which will indicate a spousal support award in amount and duration at the high end of the range.

A low standard of living or lower income levels also indicates a spousal support award at the high end of the range.

Factor 4/7: Needs and ability to pay of payor

If the payor spouse has high need and low ability to pay, this may indicate an award of spousal support at the low end of the range.

Factor 5/7: Work incentives for payor

Some types of employment are associated with significant expenses that are not covered by the employer or reflected in income or deductions from pay, such as parking, cost of commuting, tools, and so on.

If a payor has significant expenses associated with his employment, then this may be a factor indicating the low end of the range is appropriate.

Factor 6/7: Property division and debts

A low amount of property to be divided would suggest an award at the high end of the range while a large amount of property to be divided would suggest an award at the low end of the range.   In Qaraan v Qaraan, 2012 ONSC 6017, an equalization of $1,571,409.29 was found to be sufficiently large to push the spousal support award towards the low end of the range.

Factor 7/7: Self-sufficiency incentives

Spousal support awards may be made at the lower end of the range in order to encourage self-sufficiency in the recipient.

Additional factor: Length of the marriage

A longer marriage would also indicate that the spousal support should be located at the high end of the range.

To learn more about the high-range of spousal support, contact the lawyers at Krol & Krol today.

When is high-range spousal support awarded? Part 1/2

High-range spousal support is an increased amount of spousal support versus the mid-range or low-range amount.

High-range spousal support is not routinely ordered; however, an award of high-range of spousal support may be appropriate and reasonable in certain circumstances.

Generally, a recipient spouse will have to prove that there is a good reason why they should be awarded high-range spousal support. Chapter 9 of the SSAG lists the following non-exhaustive factors that determine location within the ranges provided:

1. strength of any compensatory claim;

2. recipient’s needs;

3. age, number, needs and standard of living of children (if any);

4. needs and ability to pay of payor;

5. work incentives for payor;

6. property division and debts; and,

7. self-sufficiency incentives.

Factor 1/7: Strength of any compensatory claim

Spousal support may be compensatory (meant to compensate the recipient for some economic detriment suffered) or non-compensatory (involving claims based on need) in nature.

A strong compensatory claim indicates that both amount and duration (length of time spousal support should be paid) should be at the higher end of the range.

Factor 2/7: Recipient’s needs

If the recipient has reduced income and/or earning potential because of age or other factors, the award of spousal support may be higher in amount and duration. In Bastarache v. Bastarache, 2012 NBQB 75 there was a disparity in living standards between the parties. The wife also had significant needs which resulted in an award between the mid and the high-range.

A discussion of the remaining factors (i.e. 3-7) that affect the amount of spousal support are continued in our next blog post.

Should you wish to discuss any of these factors with a lawyer at Krol & Krol, telephone our offices at 905.707.3370 to book a consultation.

What are the SSAG, the RUG and DivorceMate?

The Spousal Support Advisory Guidelines (SSAG) are guidelines that underpin the calculationn of spousal support. The final version of these guidelines were released in 2008.

The SSAG have not been legislated by any level of government. In other words, the SSAG are not law. Rather, they are guidelines.

Even though they are not binding law, lawyers and judges regularly rely on the SSAG (Fisher v. Fisher, 2008 ONCA 11). According to case law judges must consider these SSAG on an initial application for support. The SSAG also have a role to play on variation applications of spousal support; however, in variation cases there may be complicating factors that a court must consider before applying the SSAG wholesale.

The Spousal Support Advisory Guidelines: The Revised User’s Guidelines (which are sometimes called the “RUG”) were released in April of 2016 and update the SSAG. The RUG do not provide a comprehensive review of all case law relating to the SSAG since 2008. However, the RUG focuses on leading appellate and trial decisions since the release of the SSAG in 2008.

The SSAG and DivorceMate are closely connected as DivorceMate is a computer program that provides calculations based on the SSAG. Family lawyers and judges in Ontario often use DivorceMate to assist in calculating spousal support.

On the issue of spousal support, DivorceMate does not determine whether a spouse is actually entitled to spousal support. Entitlement depends on the particular facts of each case. The issue of entitlement should be discussed with you family lawyer before producing any DivorceMate calculations.

DivorceMate provides a range of amounts (quantum) of spousal support, which include the “low-range”, “mid-range” and “high-range” amounts. DivorceMate also provides a range of the length of time that spousal support ought to be paid. This is often referred to as the duration of spousal support.

If you have questions relating to spousal support, contact one of the lawyers at Krol & Krol for a consultation.

Increase in Spousal Support

There may be instances where a spouse that is ordered or agrees to pay spousal support to a former spouse receives a raise or some form of an increase in income after the order is made or the agreement is signed.

The question in these cases is whether the recipient of spousal support can ask for an increase in his/her support based on the recent increase in the payor’s income.

Cases such as Fargey v. Fargey and Abernethy v. Peacock have dealt with this issue, and highlight various important factors as well as objectives that a court must consider prior to making a ruling on the matter.

The cited legislation that deals with varying/increasing spousal support is section 17 of the Divorce Act and section 37 of the Family Law Act.

Section 17 of the Divorce Act states that:

17(1) A court of competent jurisdiction may make an order varying, rescinding or suspending, prospectively or retroactively,

  • (a) a support order or any provision thereof on application by either or both former spouses; or
  • (b) a custody order or any provision thereof on application by either or both former spouses or by any other person.

17(4.1) Before the court makes a variation order in respect of a spousal support order, the court shall satisfy itself that a change in the condition, means, needs or other circumstances of either former spouse has occurred since the making of the spousal support order or the last variation order made in respect of that order, and, in making the variation order, the court shall take that change into consideration.

17(7) A variation order varying a spousal support order should

  • (a) recognize any economic advantages or disadvantages to the former spouses arising from the marriage or its breakdown;
  • (b) apportion between the former spouses any financial consequences arising from the care of any child of the marriage over and above any obligation for the support of any child of the marriage;
  • (c) relieve any economic hardship of the former spouses arising from the breakdown of the marriage; and
  • (d) in so far as practicable, promote the economic self-sufficiency of each former spouse within a reasonable period of time.

The cases of Abernethy and Fargey conveyed that the most vital factor that a Judge must consider when ruling on an Application to vary spousal support is whether there has been a material change in circumstances.

In the case of Abernethy, because there was a material change in circumstances, the Applicant was entitled to a variation of support based on “contract, on need, and on compensation.”

The Court in Fargey cited the case of Willick to properly define the meaning of a “material change in circumstances.” A material change in circumstances was defined as a change that, “if known at the time, would likely have resulted in different terms.”

To learn more about an increase in spousal support as well as the services provided by Krol & Krol, call 905.707.3370 today.

Interim Spousal Support

Courts take a different approach in making a ruling on temporary spousal support during a Motion than the approach taken on a determination of a final award of spousal support at a trial.

Specifically, in determining whether a party is responsible to provide his/her spouse with temporary or interim spousal support, the Court will look to cases such as Thomas v. Thomas and Hughes v. Hughes. The jurisprudence (i.e. case law) conveys that an award of temporary spousal support should seek to allow the recipient to obtain support from the date of the commencement of the litigation until the final trial. An adjudicator should primarily take into account the needs and means of the recipient of support, and attempt to place the parties on equal ground with respect to the financial support available to them individually.

Interestingly, if a party feels as though he/she is disadvantaged due to the unlimited resources available to their counterpart, they may apply to the Court for “advance” costs to fund the litigation and place the parties on relatively equal ground. However, a motion for “advance costs” should not be relied on and should only be used in extreme cases, as Justice Gates pointed out in the case of Lakhoo v. Lakhoo.

To learn more about temporary spousal support as well as other issues relating to spousal support, call 905.707.3370 today.

How do courts assess interim support?

When courts are faced with the task of assessing whether one of the parties to a matrimonial matter are entitled to interim support, two components will be analyzed; whether the applicant is in need of the support and whether the respondent has the ability to pay.

In the case of Knowles v. Lindstrom, 2015 ONSC 1408 Justice Penny outlines that:

“[t]he parties agree that ‘need’ in cases such as this relates not only to basic shelter and necessities but to a lifestyle that is commensurate with the lifestyle enjoyed during the relationship, provided the other spouse has the ability to pay. Thus, the accustomed standard of living during a relationship is the appropriate content in which a payee spouse’s need should be assessed.”

Justice Penny further explains that an applicant who presented a modest expense budget in his/her Financial Statement should not be penalized for failing to spend beyond their means or for failing to advance, as their monthly budget, lavish expenses they’re not actually incurring. In that regard, Justice Penny states:

“The applicant has presented a modest expense budget of approximately $76,000. As noted above, I do not think the applicant should be penalized for failing to spend beyond her means or for failing to advance, as her monthly budget, lavish expenses she is not actually incurring. By the same token, I agree with the respondent that while the parties’ lifestyle during the relationship is relevant to the context for establishing the applicant’s needs, it is within the court’s discretion to draw the line at certain types of lavish expenditures, such as private jets.”

To learn more about assessing interim support as well as the services provided by Krol & Krol, call 905.707.3370 today.

Duration of Spousal Support

Unlike Child Support, concrete legislation does not exist with respect to Spousal Support. Instead, the legal realm has come to rely on the Spousal Support Advisory Guidelines. (SSAG)

The fact that judges do not have the law to resort to when face with the issue of spousal support, has proven difficult for the courts in determining the duration of spousal support.

In the case of Bracklow v. Bracklow, the Court conveyed the notion that circumstances where one of the parties are disabled or struggle with ill health, does not always require his/her spouse to pay lifetime spousal support. Although, it is interesting to note that the case of Bracklow did not involve a long-term marriage.

The SSAG dictate that a marriage that has lasted for 20 years or more will result in an obligation of “indefinite” spousal support. Justice Beryl MacDonald analyzes the term “indefinite” in his ruling in Bridgen v. Gaudet as follows:

I realize there are many who suggest there is a compensatory element to be considered because of the existence of a long term relationship. I have some difficulty with that analysis although there is support for it in Bracklow. (see “Spousal Support Post-Bracklow: The Pendulum Swings Again?”, Carol Rogerson, (2001) 19 Can. Fam. L.Q. 185) I prefer to consider compensatory support in the context of a known lost career advance or lost employment and benefits a person may have pursued, or received, but for the marriage. Many spousal recipients had no employment before marriage or their employment may have been in minimum wage endeavors that may still be pursued if the spouse’s health permits. There is no specific loss that can be identified. Long marriages do lull these persons into a permanent state of financial dependency but I would still categorize these as non-compensatory cases.

Given that the Supreme Court of Canada has directed illness does not mean an entitlement to lifetime spousal support some objective criteria must be developed to rationalize an appropriate time when support should end. Ability to pay is not a factor in determining as appropriate termination date unless we are to revert to the concept that, although on the one hand the court says marriage does not mean support for life, even if you’re disabled, if the payor spouse can afford it, then a spouse will receive lifetime support. I do not consider that to be an objective criteria upon which to analyze these very difficult situations.

To learn more about duration of spousal support as well as the services provided by Krol & Krol, call 905.707.3370 today.

Lump Sum Retroactive Spousal Support – Tax Consequences

When a court orders that one of the parties are entitled to a specific amount of spousal support in accordance with the SSAG, the Court will also award a lump sum retroactive spousal support award from the date of the application until the present day.

The first issue is how the Court determines said amount.

At first glance, it seems reasonable and obvious that the Court would multiply the amount awarded in spousal support per month by the amount of months in arrears. However, in reality, that is not a fair and reasonable figure as it does not take into account the fact that monthly spousal support payments are deductible to the payor and taxable to the recipient. Therefore, decisions such as Hume v. Tomlinson, Elgner v. Elgner, and Vanasse v. Seguin, stress the that the Court has an obligation to consider the tax consequences when ordering a lump sum retroactive spousal support award.

In Thompson v. Thompson, The Court explained its position on the matter as follows:

The quantification of retroactive spousal support, the range that is generated by the SSAG must be adjusted because these ranges are based upon periodic ongoing payments which are presumed to be taxable in the hands of the recipient and tax deductible by the payor. A retroactive award must be netted down to account for its non-taxable status in the recipient’s hands, and its non-tax deductible status in the payor’s hands.

To learn more about lump sum retroactive spousal support as well as the services provided by Krol & Krol, call 905.707.3370 today.

Life Insurance Policies

In cases where a party is awarded spousal support, the recipient will want to obtain some sort of guarantee in the event the payor suddenly dies. It is for this reason that courts have the ability to compel a spousal support payor to alter his/her life insurance policies and name the recipient as a beneficiary to the life insurance policy.

As was witnessed in Schellar v. Scheelar, this can pose a significant problem if the payor dies without complying with the clause in the separation agreement that compels him/her to name the recipient as beneficiary to the policy. In such cases, if the parties included in the agreement a standard clause such as the following, “in the event that the husband should die without such life insurance being in effect, notwithstanding that he remain subject to the obligation to pay child and/or spousal support, the wife shall be entitled to a first claim upon the estate of the husband for the sum of $500,000”, then the payor must have assets for the recipient to collect on his/her spousal support entitlement.

In cases where the payor did not have sufficient assets, courts such as the one in Scheelar, refused to order that the life insurance policies be paid to the recipient nonetheless.

It, therefore, would be wise to make the payor and recipient joint owners of the policy. That way, if the payor decided to amend the designation of the beneficiary of the policy, the joint owner would be notified.

To learn more about life insurance policies as well as the services provided by Krol & Krol, call 905.707.3370 today.

Interim Spousal Support

In many matrimonial cases, one of the parties will find themselves in a precarious financial situation. More often than not, a mother who sacrificed her career to take care of the children of the marriage, will find herself in need of interim spousal support upon the dissolution of the marriage.

Justice Douglas, in Horowitz v. Nightingale, outlined the various principals of interim spousal support as stated in the case of Driscol v. Driscol. They are:

  1. On applications for interim support the Applicant’s needs and the Respondent’s ability to pay assume greater significance;
  1. An interim support order should be sufficient to allow the Applicant to continue living at the same standard of living enjoyed prior to separation if the payor’s ability to pay warrants it;
  1. On interim support applications the court does not embark on an in depth analysis of the parties’ circumstances which is better left to trial. The court achieves rough justice at best;
  1. The courts should not unduly emphasize any one of the statutory considerations above others;
  1. On interim applications the need to achieve economic self-sufficiency is often of less significance;
  1. Interim support should be ordered within the range suggested by the spousal support advisory guidelines unless exceptional circumstances indicate otherwise;
  1. Interim support should only be ordered where it can be said a prima facie case for entitlement has been made out; and
  1. Where there is a need to resolve contested issues of fact, especially those connected with a threshold issue, such as entitlement, it becomes less advisable to order interim support.

To learn more about interim spousal support as well as the services provided by Krol & Krol, call 905.707.3370 today.