(For spouses seeking fair compensation after a separation with a wealth disparity.)
Separating from your spouse often involves more than just untangling emotions; money is an important consideration, especially when assets, income, and investments increase in value post-separation. This issue commonly arises in spousal support cases where the payor has seen a substantial increase in income and the payee wishes to vary the spousal support amount to reflect such increase. If you or your ex-spouse has experienced an increase in wealth following your separation, you may be wondering whether one of you is entitled to share in that increase.
Many spouses will enjoy regular increases in income over time. If both spouses experience steady intervals of salary increases, that would likely not change the formula ranges for spousal support too much. Here, we are dealing with substantial increases in income of the payor.
In the case of Hopkinson v Hopkinson 2023 ONSC 1583, the Ontario Superior Court of Justice explains that the treatment of post-separation increases in a payor’s earnings in spousal support cases is at the discretion of the court and, like many family law issues, is highly fact-driven. A recipient spouse is not automatically entitled to such an increase according to M.I.M. v C.M. 2023 ONCJ 453. The Spousal Support Advisory Guidelines state at paragraph 14.3 that entitlement depends on factors such as the length of the marriage, the roles adopted during the marriage, the time elapsed between the date of separation and the subsequent income increase, and the reason for the income increase.
Thompson v Thompson 2013 ONSC 5500 set out that compensatory support claims may establish a basis for the entitlement of the payee to share in post-separation income increases. If the recipient spouse can demonstrate that they made contributions that are directly (but not necessarily explicitly) linked to the post-separation success, then they may be allowed to share in it.
This is more likely if the couple had been together for a long time, their personal and financial lives were completely integrated, and the recipient’s sacrifices have been “longstanding and significant”. The likelihood of proving that the recipient should share in this increase of wealth lessens if the payor acquired new skills or credentials after separation and those new skills were the reason for the increase in their income. Assuming primary child and household duties without evidence of career or educational sacrifice would likely not be sufficient.
Although it may be harder to make an argument for entitlement in the case of non-compensatory support cases, there is no hard and fast rule excluding those recipients from potentially sharing in post-separation success.
Ultimately, it is at the discretion of the court to determine whether spousal support recipients are entitled to share in a payor’s post-separation increase in income. Whether you or your ex-spouse have enjoyed, or are expected to enjoy, a post-separation increase in wealth, it is best to consider speaking with a family law lawyer about your specific circumstances and the likelihood of your spousal support payments being varied.