Spousal Support – What Should you Expect When Your Marriage Ends
When Kim Kardashian and Kanye West finalized their divorce, the details of their settlement were made public. They agreed on joint physical and legal custody of their four children, with Kanye paying $200,000 per month in child support. Despite their combined net worth of $2.1 billion, the settlement was straightforward compared to the complexities faced by many average divorcees.
In Canada, millions of people face similar challenges each year. In recent years the number of divorcees reached 2.78 million per year, continuing the trend of increasing divorce rates. These individuals, like Kim and Kanye, are navigating the end of their relationships and starting new chapters in their lives.
What most of these people have in common is that at one point or another, they have faced the legal obligation to divide their finances between themselves and their former spouses, including an additional obligation to pay child and/or spousal support to the other.
What is Spousal Support?
According to the divorce act, when two people are married in Ontario it is not only considered a romantic relationship like most of us believe, but also an economic partnership. Although the romantic aspect of the relationship may end when spouses separate or divorce, the financial part of the partnership may be extended past the date of separation. In certain cases, either spouse may be eligible for spousal support from the other party.
Some of the purposes of spousal support are as follows:
- To help your former spouse become self-sufficient financially;
- To prevent your former spouse from experiencing financial difficulty as a result of the marriage breakdown;
- To apportion any economic consequences arising from taking care of the children of the marriage;
- To compensate your former spouse for financial sacrifices and disadvantages they faced in the marriage.
Generally, the person who has the lower income will be the receiver of spousal support and the person with the greater income, the payor. This support is meant to help the receiver maintain a similar standard of living that they experienced during the marriage.
Who Is Entitled To Receive Spousal Support?
First, it is important to understand who is entitled to receive spousal support. Although this blog is targeted at spousal support specifically after a marriage breakdown, spousal support is a right that extends to married as well as common-law couples in Ontario.
Thus, you may be entitled to spousal support if you meet at least one of the following criteria:
- You are married;
- You have lived together with your partner as a couple for at least three (3) years; or
- You have a child with a person with whom you have been in a relationship of some permanence for any length of time.
Some additional factors that courts tend to consider when determining whether you are entitled to spousal support may include:
- The roles either spouse took on during the relationship;
- Whether any of these roles and responsibilities prevented a spouse from developing their career;
- Whether there is a legal support agreement that outlines either party’s right to spousal support;
- Whether a spouse is facing financial difficulties as a result of the marriage breakdown;
- The income of the other spouse and whether it is enough to pay any support;
- The length of the marriage or relationship;
- The health of either spouse;
- The age of both spouses;
- The existence of any children of the marriage and their age; and
- Other property or assets held by each spouse.
In some situations, court orders have held that no spousal support shall be paid. The common factors in these situations are that both parties are financially stable, both parties have comparable salaries, the length of the relationship was short (typically under 5 years), there are no children of the marriage, and the parties are both in good health.
How Much Do I Owe? How Much Am I Entitled To?
Although each person’s circumstances are unique, the Spousal Support Advisory Guidelines (SSAG) make it possible to predict the range for the amount of spousal support owed and/or owing. Thus, if you are entitled to spousal support, the SSAG will help guide you to a reasonable amount for your unique situation. However, the SSAG do not create a legally binding obligation. They are simply a tool to help the Judge determine the proper amount. Nevertheless, Judges have a tendency to use the SSAG calculations to set the final amount of support.
Judges are not the only ones who have access to the SSAG formulas and calculations. If you are separating out of court, family law lawyers can also use a specified program to determine the range of spousal support based on the income of the parties, the age, the length of the relationship, and the number and age of children of the marriage.
The SSAG states that when there are no children involved, the amount of spousal support will typically range from 1.5 to 2 % of the difference between the gross incomes of the spouses in question, to a maximum of 50%.
When there are children involved, you must first establish the net disposable incomes of each spouse, then add them together. The spousal support range will be between 40-46% of the combined net disposable income of the parties.
However, for the purposes of the quantity of spousal support, the recipient of spousal support cannot purposely choose to be unemployed to maintain their entitlement. Instead, they have an obligation to become financially self-sufficient. If such a case arises, the Courts may impute the income to the receiver spouse regardless of the actual income. This means that for the purpose of support calculations, the receiver will be deemed to earn a certain amount based on past work history, ability to work, health, education, and other factors, if it is demonstrated that they are purposely decreasing their earning potential.
How Long Is Support Paid For?
As stated previously, factors such as the parties’ incomes, age, length of the relationship, and the existence of children help determine the quantity of spousal support. However, these factors will also determine the duration of the spousal support entitlement or obligation.
If there are no children involved, typically the range for the duration of spousal support will be based on 0.5 to 1 year of support for each year of the marriage. On the other hand, if there are children involved, the age of the parties and the age of the children are considered in addition to the length of the marriage.
The Spousal support Advisory Guidelines (SSAG) also establishes that when a marriage has lasted for over 20 years, the duration of spousal support may be indefinite. The same applies when the marriage has lasted for at least 5 years, but the number of years of marriage, when added to the age of the recipient, totals 65 or greater.
Please seek the guidance of a family law lawyer to help you determine how much and for how long spousal support will need to be paid. This way, you will know what amount to expect to receive or pay. This is highly important, especially if you plan on going to trial regarding this matter.
What About Taxes?
When money is being exchanged between former spouses, it is always important to keep in mind the tax implications of such transactions.
Spousal support, if paid monthly, is taxable as income in the hands of the recipient and deductible in the hands of the payor. In contrast, a lump sum spousal support payment is not taxable nor deductible by either party.
Why Should I Hire a Family Law Lawyer?
Spousal support is a complicated matter. Determining the amount and duration of support is not easy, especially if the spouses cannot agree on who owes and how much. If you need help getting spousal support from your former spouse or common-law partner, or need assistance with determining how much you are obligated to pay, please contact us at Beffa Law. When it comes to spousal support, we can help you understand your legal entitlements and obligations, and negotiate the best deal possible for you. We look forward to speaking to you regarding all your family law concerns and can help you reduce any stress that comes with the breakdown of relationships.
If you require any assistance with your separation agreement, get in touch with us at Beffa Law and we will be able to help you review or draft a contract that protects you. Beffa Law is a real estate law firm serving customers in Greater Toronto Area and beyond. You can call us at 647.812.8462 email us at info@beffalaw.ca or set up an appointment to discuss your questions or concerns.
