Spousal Support

Transcript from Spousal Support Video

Please note: The script may not be exactly what is spoken, but contains the same information as presented in the video.

Hi, I’m Stephanie Ansky of Feldstein Family Law Group.

Spousal support is a very hot topic, one which causes strife, angst and anger in many families. While few payors have difficulty comprehending the need and the obligation to pay child support, many payors are reluctant to pay spousal support.

It is not just men who are ordered to pay spousal support. Women pay too, to their husbands, wives and common law partners, and just like men, they don’t like it either.

What is spousal support, how do you get it, how much do you get and for how long???? Big questions, big issues and big answers and not enough time today.

I could speak on this topic for days but I can only give an overview in my limited time today. I will, however, over time, give more information; go through sticky issues, spousal support situations that plague the family lawyer and ones where there are no hard and fast rules. Every case is somewhat different and one should consult a lawyer before agreeing to support or agreeing to release support. Family lawyers are often stumped so it is not advisable to go it alone.

Having said all that….

Who is entitled to spousal support? Simply because there is a disparity between your income and that of your spouse does not automatically lead to entitlement. There must first be a finding or an agreement as to entitlement. There are two claims for entitlement- Compensatory and non compensatory claims.

Compensatory claims are based either on a recipient’s economic loss or disadvantage because of the marriage- for example the roles assumed during the marriage or the when one of the payors has received an economic benefit for which the recipient has not been compensated. Examples can be child care responsibility, leaving your job to move for the payor’s job, or helping him in obtaining his current employment position.

Non compensatory claims involve claims based on need. This can be a need to cover basic needs or to maintain a certain standard of living commensurate with the standard of living enjoyed during the marriage. Many cases rely upon both compensatory and non compensatory claims. There may, in fact, be entitlement on both bases. In long term marriages it is common for support to be based on both compensatory and non compensatory claims.

If entitlement is NOT established, the exercise ends there. If entitlement has been established we turn to the Spousal Support Advisory Guidelines called the SSAG to help determine quantum of support and duration. The SSAG were adopted by the Court of Appeal. The SSAG essentially takes the factors essential in determination of spousal support and plugs them into a DivorceMate calculator in order to arrive at a specified range of support that should be made by a payor spouse. Although the court essentially adopts the SSAG, these guidelines have not been legislated or made mandatory in law, however all courts are now referring to the SSAG in their Spousal Support decisions and if not it may be a ground for appeal.

Be mindful, however, that there may be exceptions where the amount may depart from the range altogether.

What does all this mean? It means that if you have been married for a long time, gave up your career to raise your children and now have to re-enter the workplace after many years of unemployment, you will be supported, in some cases indefinitely, always subject to a material change in circumstance.

Where does one fall within the range of support? Different courts in Ontario order at different parts of the range. What we see in the normal course Newmarket orders in the mid to high range, while Oshawa and Toronto tend to be lower. Other factors, outside of the scope of today’s brief discussion, can lead to a low range or high range determination.

What if the payor earns over $350,000.00 per year or under $20,000.00 per year- these are called ceilings and floors and are also exceptions. There is no hard and fast rule and the SSAG do not necessarily get adhered to in the over $350,000.00 case. If it is close to $350,000.00 the reasoning of the SSAG is quite helpful. When incomes get into much higher figures it is very discretionary and counsel are called upon to be creative. In a recent case we settled on a percentage of income up to $350,000.00 and another percentage on income over $350,000.00 with a fall back to the mid range SSAG calculations if the income drops to $350,000.00. Counsel can help you be creative in quantum determination in this regard.

When children are living with the recipient the household income will need to be higher than the household income of the payor. Where the payor has the children residing with him or her, this amount will be even higher. There are situations as well where the children share residences, spend 40% of the time with one parent or there is a split scenario with some children with one parent and others with the other parent. One should be mindful of these situations and the calculations in those circumstances.

Where a party is underemployed or is not working, be it payor or recipient, income can be imputed to him or her for both child support and spousal support purposes. This too is a full day discussion and can be elaborated on in another segment.

Just when you think you have heard enough, there are other situations that make support tricky.. What to do with a post separation income increase? Decrease? Repartnering or remarriage.. These will usually be considered material changes in circumstances leading to a change in the quantum of support. Not always however and one must be mindful of these occurring before signing a separation agreement or for if and when they occur. As such it is important to craft an agreement that protects the client.

What about duration, how long should one pay for the former spouse? This depends on the duration of the relationship and whether there are children of this relationship. It depends on the age of the parties and sometimes on the age of the children. Where a recipient of support’s age when added to the period of marriage including the period of cohabitation totals 65 or more, spousal support is deemed to be indefinite. Of course there are exceptions.

In a long terms marriage the SSAG and the court may have no defined termination date.

The duration ranges are often used to negotiate a term, always subject to a material change in circumstance during the time period.

What about variations? Reviews? If a party needed to retrain such that she was out of the work force for 10 yrs and was enrolled in a 3 year course post separation at which time the husband paid her spousal support based on her income of nil or close to nil. He will want a variation at the end of her 3 year plan. Some opportunity to find employment and then seek to have it varied. What about the mere passage of time, does the original basis of entitlement still exist? What was the intention of the parties when the agreement was negotiated? What about retirement?

A Review order is a really effective tool for a judge but they do not often use them. As parties negotiating an agreement it is effective, it gives the recipient an opportunity to become self sufficient, one of the main goals, and time to reorganize their lives. Judges do not use it often and instead look to a material change in circumstance clause which has a very high test. Lawyers should make good use of review orders in the appropriate cases.

Time limits from the courts are still being used very carefully. A time limit can be negotiated between counsel.

Lump sum spousal support and the clean break. While Lump sum payments are sometimes a nice way to end a marriage with no ongoing spousal support liability they come with associated risks for both the payor and recipient and unlike monthly support payments are not tax deductible to the payor and tax inclusive the recipient. While it may seem like a good idea to receive an extra $100,000 up front for the recipient, after the money is gone and he or she still does not have employment it may be very hard for that party to live. On the flip side, the payor could have made the $100,000 payment and the lucky recipient spouse could have found herself very lucrative employment where the need for support would not have existed or partnered up with someone who is fully supporting her, again reducing her need for support. This payor may have grossly overpaid.

The Release clause- effective, necessary and dangerous. While a court may retain discretion in the most limited of circumstances, the release clause releases a payor from paying spousal support to the recipient and often vice versa, nothing makes the higher income earner happier than being released from paying spousal support to the lower income earning spouse. A court will not order a release but parties can negotiate one. It will not form part of a court order but can be in your Minutes of Settlement and/or Separation Agreement. Be careful. A release can be immediate or after payment over a certain period of time or a certain quantum. If you are the lower income earner or if you have any medical issues, be very reluctant to execute a release of spousal support. Although independent legal advice is always recommended, it is especially necessary when you are agreeing to release spousal support. While it does allow for closure, it can be very detrimental when you lose your job after a long term marriage after the agreement was signed or you fall ill, and you have no one to turn to for financial aid. Please speak to a lawyer.

As daunting as all this sounds… it is. Do not go it alone if you can retain counsel to help you. Spousal support is one of the most fluid and challenging areas in family law. There are always changes and we, as lawyers, need to keep up with these changes, look to the case law and try to be creative to help our clients in a fair and effective way, looking not only to the immediate of today, but to the future as well.

I promise to come back another day, roll up my sleeves and dig deeper on some of the challenging issues and cases that present themselves.

Thank you for taking the time today to listen to me and I hope you have learned a little something today.