22/11/2019 0 Comments
On Separation or Divorce, How Much Spousal Support Will I Have to Pay?
Spousal support, which is also known as alimony, spousal maintenance, or partner support (for common-law couples) is money that is paid by one spouse or partner to the other after separation or divorce. In BC, spousal support is not an automatic right.
The former spouses either have to agree that spousal support is payable, or the spouse seeking spousal support must apply to the court and prove entitlement to spousal support. If the spouses agree that spousal support should be paid, or the spouse seeking support is able to establish entitlement, the next step is to determine quantum and duration – in other words, how much spousal support is to be paid and for how long.
Spousal Support Advisory Guidelines assist, but are not strictly adhered to
The calculation of spousal support is a very complex area of family law. There is no straightforward formula that applies to the calculation of spousal support as there is with child support (by way of application of the Child Support Guidelines). While it is true that there are Spousal Support Advisory Guidelines (“SSAG”), those Guidelines are not mandatory. The court has discretion to deviate from the SSAG and there are a wide range of potential outcomes when the SSAG are applied.
Determining quantum (amount) of spousal support in BC
There are two formulas under the SSAG: with child support and without child support (the with child support formula is actually a collection of formulas, depending upon the custodial and child support arrangements). In other words, the quantum of spousal support is calculated differently if child support is also being paid. Calculation of the amount of spousal support using the correct formula under the SSAG will produce a range of support (low, middle and high) based on the net difference in the former spouses’ incomes. The ranges are quite broad, especially where the disparity in incomes is large or the marriage was long. The mid-point in the range is not the default outcome. Instead, a number of factors must be considered in determining whether the quantum of spousal support should be in the low, middle or high end of the range. Factors include:
• the strength of any compensatory claim;
• the recipient spouse’s needs (e.g., limited income and/or earning capacity, age);
• age, number, needs and standard of living of children (if any);
• the needs and the ability to pay of the payor spouse;
• work incentives for the payor spouse;
• property division and debts; and
• self-sufficiency incentives for the recipient spouse.
Determining duration of spousal support in BC
The factors listed above that go to the issue of quantum are also relevant to the determination of duration of spousal support (i.e., for how long spousal support has to be paid). That being said, duration of spousal support is most heavily tied to the length of the relationship. In cases of short marriages (which, generally speaking, are marriages of less than 5 years) with no children, the without child support formula generates very small amounts for a very short duration. Time limits, or lump sum orders, are common in these cases. In cases of long marriages (20 years or longer), the formula generates generous levels of spousal support for indefinite periods, reflecting the fairly full merger of the spouses’ lives. “Indefinite” in the context of a spousal support order means that the duration is not specified at the time the order was made; it does not mean that spousal support is permanent or that the amount of support will always be payable at the same level. Orders for indefinite support are open to variation and review as the former spouses’ circumstances change over time and may also have review conditions attached to them. For example, as our family lawyers recently discussed, remarriage may be a material change in circumstances that warrants termination of spousal support, or a reduction in the amount or duration.
How is spousal support paid? Periodic payments vs. lump sum payments
In BC, periodic payments are the default option, such that the payor spouse pays a certain amount to the recipient spouse on a set schedule (usually monthly). Periodic payments are taxable income for the recipient spouse and tax deductible for the payor spouse. Another option is for spousal support to be paid in a lump sum, whereby the payor spouse transfers assets or pays money to the recipient spouse in full satisfaction of spousal support obligations; once that lump sum transfer is done, there are no further spousal support payments. Lump sum spousal support may be preferred or necessary, depending on the circumstances (for example, where there is a real risk that the payor spouse will not make the periodic payments). Lump sum spousal support must be discounted for tax. A lump sum, whether as part of a final settlement or for retroactive spousal support, will not be tax deductible for the payor spouse or taxable income for the recipient spouse, and thus any lump sum amount determined using the SSAG ranges for periodic amounts must be discounted or reduced to reflect that tax fact.
How are BC spousal support orders or agreements enforced?
In BC, an order or agreement for spousal support can be registered with the Family Maintenance Enforcement Program (FMEP), who will then receive the maintenance payments from the payor spouse and send the money to the recipient spouse. If the payor spouse does not make the payments voluntarily and falls into arrears, the FMEP can take steps to enforce the order or agreement, including “attaching” income (e.g., garnishing wages) or registering an order against land the payor spouse owns.
Get legal advice on how much spousal support you will have to pay
The calculation of spousal support is a complicated area of BC family law. It is best to consult with an experienced BC family lawyer to get a clear understanding of your rights or obligations. Contact Bronson Jones & Company LLP today at 1-855-852-5100 to schedule your free initial consultation with one of our team of BC family lawyers.