There are many issues to deal with when you are going through a separation. Spousal support is often one of them. Your ex spouse may be asking for spousal support from you, or you may be seeking spousal support payments from your ex spouse. In either situation, how is spousal support calculated and how much spousal support is fair?
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In this article, we will delve into the specifics of spousal support in British Columbia and explore the factors that are considered when determining the amount of support. Additionally, we will provide an overview of Spousal Support Calculators in BC, a tool that can help you estimate the amount of spousal support you may be entitled to or responsible for paying.
Spousal support is money paid from one spouse to the other after separation. Spousal support is also sometimes called “spousal maintenance” or “alimony.” It is usually paid pursuant to either a negotiated separation agreement or a spousal support order made by the court. Spousal support can be paid periodically (e.g., monthly) or in a one-time lump sum.
Spousal support claims can arise in several situations. It can be claimed by a married spouse at the end of a marriage. It can also be claimed by a partner at the end of a common law relationship if the relationship was “marriage-like” for a continuous period of at least two years. In addition, an unmarried person can claim for spousal support from their former partner if they lived in a marriage-like relationship for less than two years and had a child together.
Entitlement to spousal support is a threshold issue. Entitlement does not arise automatically from the fact that the parties were in a relationship or simply because there is an income difference between the spouses. There is no need to spend the time and energy to calculate the proper amount of spousal support payments or duration of support if there is no legal requirement to pay it in the first place.
In other words, the person claiming spousal support must first prove that they are entitled to it. Factors that influence the question of entitlement include the length of the relationship, age at time of separation, the roles played during the relationship (one spouse stays home with the children; one spouse moved for the other spouse’s career, etc.), and need/financial hardship. There may also be a contractual basis for spousal support, for example, a marriage contract or cohabitation agreement.
Spousal support claims can be uncertain, challenging, and stressful. With funding from Canada’s Department of Justice, two professors developed guidelines in an effort to make spousal support more predictable and consistent. The Spousal Support Advisory Guidelines (“SSAG”) the two professors developed provide ranges of support in a variety of situations to help spouses figure out how much spousal support they will get and for how long.
While the SSAG have provided some much-needed clarity, there are limits to be aware of.
First, the SSAG don’t provide legal advice on whether a spouse is entitled to support; the question of entitlement to support depends on the unique facts and how the law applies in each situation.
Second, the SSAG are not law. Family lawyers and judges refer to and rely on the guidelines to negotiate agreements and make spousal support orders, but the SSAG are not binding on them in the way the Child Support Guidelines are.
Third, the SSAG are only as reliable as the information inputted. Spousal support calculations based on incorrect income information will not produce accurate calculations.
There are two formulas to determine spousal support payable under the SSAG. It is essential that the correct formula be used. The first formula is the “without child support” formula. It applies where there are no dependent children, either because the couple did not have children or because the children are now independent adults.
The second formula is the “with child support” formula. It is actually a collection of formulas that depend on the custodial and child support arrangements (for example, split custody, shared custody). The basic “with child support” formula applies in situations where a higher-income parent pays both child support and spousal support to the lower-income parent who has custody or primary care of the children.
Income is the starting point for spousal support calculations under the SSAG. Determining what is “income” is easiest when the payor and lower income recipient spouse each have employment income from once source.
The “with child support” formula uses net income while the “without child support” formula uses the spouses gross incomes. That means the “with child formula” will vary based on different taxes, deductions, common tax credits, CPP and employment insurance contributions.
Calculations get even more complicated when either spouse has self employment income, has corporate income, is under-employed, receives social assistance, or pension income, for example. It is important to seek professional legal advice from a family lawyer to verify what income should be included to get accurate calculations.
In addition to income, spousal support calculations take into account factors such as the length of the marriage, the age of the recipient, the ages of children, and the children’s special expenses, if any. The support recipient’s job prospects and ability to become financially self-sufficient can also be taken into consideration.
The SSAG formula will produce ranges for amount and duration of spousal support: low end, high end, and mid-range. The mid-range should not be treated as the default. In fact, once the SSAG produces the ranges, there is more work to be done to determine where in the range is appropriate. Judges and lawyers will conduct a detailed analysis, considering additional factors such as the need of the recipient; how property and debt were divided at the end of the relationship; and the age, number, needs, and standard of living of the children, if any.
Duration is how long spousal support payments must be paid. The SSAG formulas generate a range of time limits to mark the end of entitlement to spousal support. The duration—or when spousal support stops—depends on several factors, including the length of the marriage (long marriages vs. shorter marriages). For example, the appropriate duration tends to be shorter in shorter marriages or shorter relationships. For long marriages, spousal support duration tends to be longer and may be indefinite.
There are free online spousal support calculators that may be able to give you a very rough estimate about how much support is payable and for how long. These spousal support calculators are fine for getting a ballpark number but have several drawbacks. They can’t answer the question of entitlement, can’t tell you which formula to use, and can’t help you determine which income amount to input. Unfortunately, in many cases, spousal support calculators will produce unreliable results.
A spousal support calculator is an OK starting point. But if you are serious about spousal support and want to know how much support is payable and for how long, you should consult with a family lawyer.
Lawyers have experience working with the SSAG and knowledge of Canadian spousal support decisions to help you get a more accurate picture of the spousal support claim. Many family lawyers also have access to more sophisticated software to calculate spousal support scenarios and individual net disposable incomes.
A family lawyer can advise you on whether lump sum support is appropriate in your case and help you calculate the amount of lump sum support. Note that a lump sum, whether part of a final settlement/order or as retroactive spousal support, is not tax deductible for the payor, nor is it taxable for the support recipient. On the other hand, periodic spousal support payments, such as monthly payments, are tax deductible for the one paying support and taxable in the hands of the support recipient. For that reason, lump sum spousal support must be discounted for tax.
The issue of spousal support is complicated. It’s important to seek professional legal advice when dealing with spousal support matters. The lawyers at Onyx Law Group have extensive experience in working with the Spousal Support Advisory Guidelines. Reach out to us for an initial consultation to learn more. We will give you clear and understandable advice about how spousal support applies to your post separation life.
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