Jun 07, 2012

Thorny Spousal Support Issues Post Spousal Support Advisory Guidelines ("SSAGs")

Part One

The Spousal Support Advisory Guidelines (SSAGs) were finalized in 2008. They have been widely accepted in Ontario and endorsed by our Court of Appeal. As evidenced by a recently released January 2012 Department of Justice survey, the SSAGs are working well in Ontario:

Key informants noted that the [guidelines] aid spousal support negotiations by providing an objective starting point for discussions, narrowing the range of possible outcomes, and helping to shape client expectations about amount and duration…

Although not applicable in every case, the SSAGs have become a litmus test for the scope of appropriate spousal support orders. If an order is made for spousal support outside of the SSAGs’ recommended ranges, the judge must articulate clear reasons for that departure, or risk being appealed. The result is that most cases now settle within the SSAG ranges for both duration and amount of spousal support. The SSAGs have not, however, resolved all spousal support issues. There remain a number of thorny problems with which to struggle. In this post, and that of June 19th, I will consider some of the more difficult issues: first, the questions of entitlement and duration; and second, cases where the payor’s income far exceeds $350,000.

Part I: Entitlement

Before a court can get to the how much and for how long of support awards, a court must determine whether or not a spouse is entitled to spousal support. The Supreme Court of Canada’s decision in Miglin dealt with the issue of when a court will award spousal support in the face of a prior agreement – a topic for another blog. However, the decision also reaffirmed the bases of a spousal support award at first instance, and the conflicting values that a court must take into account in making such an award. Courts must consider the benefit of allowing divorcing parties to disentangle their finances, acknowledge the fact that self-sufficiency should be promoted after marriage breakdown and, at the same time, recognize that, in more marriages than not, there is one more financially dependent party who risks being negatively impacted should the relationship end. A decision on spousal support entitlement tries to consider all of these different principles through the lens of the particular facts of the case. It will be more or less successful, depending on a party’s point of view and, likely, his or her pocket book.

Why should a person be ordered to pay spousal support? In most cases, the answer is simple: one spouse compromises his or her economic future for the relationship and, hence, at relationship breakdown, is unable to immediately be self-sufficient. The other spouse is, therefore, required to support the dependant spouse until s/he has overcome the economic consequences of the roles adopted during the relationship.

But what about a marriage where the roles each spouse adopted had no effect on either spouse’s economic or employment circumstances? What if the spouse never had a career at all, so there was no career to compromise? Is a person entitled to support just because s/he earns less than his or her spouse? What if s/he earns less because s/he lacked the motivation to do more? What if a spouse was only able to live well on the income of the other spouse?

If you and your spouse were financially independent during the marriage, or if you did not suffer an economic disadvantage, you do not get spousal support. For example, if the relationship was brief (12 months in total) and your economic lives were never intertwined, you are not entitled to spousal support as there is no evidence that you were actually economically disadvantaged by the marriage. Similarly, your spousal support claim may be reduced to account for your lifestyle choices. For example, if you refuse to take opportunities to retrain which would allow you to attain self-sufficiency, such as retraining to qualify as a dentist in Canada, your spousal support claim may be reduced. If you stay at home to take care of the kids, and sustain economic disadvantage as a result, you are entitled to spousal support – whatever your gender. And if you contributed to your spouse’s ability to obtain her medical degree, all the better. If you do not give up your career so that your spouse’s career could improve, and you did not suffer any economic disadvantage from the breakdown of the marriage or any economic loss, you may only be entitled to a modest amount of periodic spousal support. You are not disentitled to spousal support because you are in a new relationship. Instead, the actual circumstances of the new relationship are relevant. After all, you could just as easily marry a prince as a pauper. If your emotional state prevents you from becoming financially self-sufficient, you get spousal support. This is particularly true if your husband of twenty years causes the emotional devastation by announcing he wants a divorce to marry someone else. If you had the opportunity to retrain during the marriage and had stable employment, you do not get spousal support. Hence, an immigrant who qualifies as a physician in Canada with her spouse’s financial support was not entitled to spousal support when her plans for a medical clinic failed, as there were many other options open to her to maintain her economic self-sufficiency. If you and your spouse are similarly disadvantaged by the marriage, no one gets support, although both of you may need it. Life will be tough, but it will be tough for the two of you. If you rely on your spouse to provide you with an upper middle class lifestyle, and even if you leave the relationship with considerable property, you may be entitled to spousal support. This is particularly true if you would be required to dip into capital to sustain the marital standard of living. Such encroachment is arguably an economic hardship from the breakdown of marriage, as is the loss of the marital standard of living.

Hand in hand with entitlement is the issue of duration. Provided entitlement is found, duration primarily depends on: (i) the length of the relationship; (ii) whether or not there are dependent children; and (iii) the support claimant’s age at the time of relationship breakdown. Generally, the SSAGs and the cases split relationships into three categories: (i) a long term marriage lasts 20 plus years; (ii) a mid-length marriage ranges from 8 to 20 years; and (iii) a short term marriage is one of less than 8 years. Complicating these 3 categories is the presence of dependent children which more often than not will give rise to more extensive financial obligations between the spouses.

The following are some general concepts on the duration of spousal support orders:

Parties coming out of relatively brief relationships cannot expect to obtain the same level or duration of support as a spouse coming out of a long term traditional marriage. The longer the parties have cohabited, the greater the presumption that their standards of living should be equalized upon dissolution. Young and able bodied parties should be able to reintegrate into the work force. If the disadvantage being addressed is of limited duration, the support order should also be of limited duration. Spousal support is not intended to be a pension for life. In a shorter, modern marriage, any disadvantage may be remedied with a brief support order. Courts are less concerned with the duration recommended by the SSAGs in cases using the with child formula, for example, where the support recipient is the custodial parent and there are young children at home. As a rule of thumb, duration under the SSAGs ranges from .5 to 1 year for each year of marriage. The SSAGs suggest that support should be indefinite if: (i) the marriage is 20 years or longer; or (ii) the marriage has lasted 5 years or more, when the years of marriage and age of the support recipient at separation added together total 65 or more (the rule of 65). But indefinite does not, and should not, mean forever.

As is evident from the above, spousal support is a complicated area. It is essential to collect and present the right evidence in order to secure the desired result. Despite the SSAGs, rulings are still discretionary. There is a wide range of outcomes. It is well worth the investment of hiring a family law lawyer to assist with the marshalling of evidence and the presentation of your case.

Photography by Thomas

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