Double Dipping into the Pension Pot: Melis v Zwanenburg 2017 CarswellOnt 1576
This case serves as an exception to the rule that double-dipping in pensions should be avoided. In this case, the Court is faced with the issue of whether a pension that was already used for an equalization payment should be used to fulfill spousal support payments for a dependent spouse.
The parties were married for 18 years and separated in 2004. The Wife, Melis worked for the federal government and moved internationally seven times during the marriage for her work. Zwanenburg moved with her to take care of their daughter, but was limited in his own career aspirations as a result of their mobility. Prior to divorce, the Husband was diagnosed with a chronic neurological disorder that meant he was able to perform childcare duties but not work outside the home.
When the parties settled in 2006, the matrimonial home was sold and equally divided between the Husband and Wife, with the Wife paying an additional $232,844 in equalization. Of that money, $217,244 was from her federal pension. The Husband received $4,200 per month in spousal support. The Wife also paid child support and all extraordinary expenses for the care of their daughter.
It had been agreed during settlement that it would not be considered a voluntary reduction in income if she waited until she was 60 to retire. At the age of 60, the Wife brought a motion to change the spousal support amount because she was retiring.
The issue before the Court was how to treat the federal pension that had previously been divided for equalization. It was clear that the Husband was entitled to support on a compensatory and needs basis, due to his career sacrifice for the family unit as well as his ongoing illness. However, Courts are generally reluctant to treat a pension as an income after it has already been treated as an asset. In doing this, the recipient is benefitting from their ex’s pension twice over.
The case of Boston v Boston lays out this hesitation in the court system. It was decided that a recipient of spousal support ought to use their own assets to generate income after the retirement of the paying spouse, and “double dipping” into the payor’s pensions should be avoided.
In this case, the court decided to proceed and allow the Husband to collect spousal support on the remaining pension amount that was not equalized during the initial settlement. Therefore, the court allowed the Husband to collect spousal support on pension amounts that the Wife earned after equalization.