The widely anticipated Spousal Support Guidelines were released in July 2008 by the federal government. I will discuss some background, the actual formulas and my preliminary views of these Guidelines. The full text can be found on the Department of Justice’s web site at www.justice.gc.ca.
The need for guidelines in the area of spousal support was evident to all involved in the process including the federal government, judges and lawyers. As the present statute law and case law have many varied and general principles for determining spousal support, results both negotiated and decided by judges varied widely for similar situations. That made it very difficult for lawyers to advise clients and for judges to render decisions. The Guideline’s goals are to help lawyers and Judges produce fairer and more consistent spousal support agreements and orders. The authors of the report are respected law professors Carol Rogerson of the Faculty of Law, University of Toronto and Rollie Thompson of Dalhousie Law School. As they state in the report, they are not changing the law of spousal support but believe their arithmetic formulas follow the spousal support objectives found in the Divorce Act and as corroborated by the Supreme Court of Canada in case law.
These Guidelines are very different in many important respects from the Child Support Guidelines, which were introduced in 1997, in many important aspects. The Spousal Support Guidelines are not binding upon judges as are the Child Support Guidelines. As the problems are resolved, the Spousal Support Guidelines may become mandatory but that will take a number of years. However, there is no question that in every case, the Guidelines are going to be calculated by lawyers and judges, and most probably applied, unless there are unusual circumstances where the Guidelines should not apply.
Another difference between the two Guidelines is that the Spousal Support Guidelines have ranges for the amount of support and for the duration of support in a given situation. The Child Support Guidelines usually only provide one amount. Fortunately, the Spousal Support Guidelines do give some factors, though they are not exhaustive, which bear on which end of the range would be most appropriate.
Unlike the Child Support Guidelines, the introduction of the Spousal Support Guidelines does not mean that all present spousal support agreements and Orders can be automatically varied if they differ from the formula under the new Guidelines. However, when there is a material change in circumstances or any event that allows for a review of the spousal support, the Spousal Support Guidelines will be looked at.
It is extremely important to note that the Guidelines make it clear that before applying the Spousal Support Guidelines there must first be entitlement to spousal support. Unfortunately, statute law and the case law do not deal well with the issue of entitlement. Many cases have often stated that the mere fact of marriage or a difference in incomes would not necessarily mean entitlement. However, the Supreme Court of Canada in Bracklow v. Bracklow made the definition of entitlement very broad as it did state that a significant income disparity between the spouses that would result in a significant drop in the lower income spouse’s standard of living, would generally mean entitlement for some support, as would cases where there have been children, as they might be the cause of a significant disparity in income because of child – rearing responsibilities.
The Spousal Support Guidelines have two different formulas and considerations for the amount of support and for the duration of support: one, when there is no child support payable, either because there were no children or child support is no longer payable, and another one when child support is still payable.
Spousal Support When No Children
The amount of spousal support when there are no children is 1.5% to 2% of the difference between the spouses’ gross incomes for each year of cohabitation (marriage cohabitation and any time living together before marriage) up to a maximum of 50%. The range for a marriage 25 years or longer is set at 37.5% to 50% of the income difference.
Duration of support ranges from 0.5 to 1 year for each year of total cohabitation before and during marriage. Support will be indefinite if the cohabitation is 20 years or longer or if the marriage has lasted 5 years or longer and the years of cohabitation and the age of the support recipient is at the time of separation added together to total 65 or more.
The Guidelines outline factors that, though not an exhaustive list, should be taken into account when fixing a precise amount and time period. They are:
- A case where one spouse has suffered significant economic disadvantage as a result of the roles taken during the marriage, such as staying home during the marriage to look after the children. That is known as compensatory considerations.
- The recipient’s age and the recipient’s needs would dictate the higher end of the range.
- Where the property division would make it fair to have a higher or lower end of the range.
- Where there is need and limited liability to pay on the part of the payor spouse because of lower income levels.
- Where there is a need to create self sufficiency. It would be the low end to push for self-sufficiency and the high end to give money for retraining.
The Spousal Support Guidelines introduce a concept called restructuring in which the end result is the same in the total amount of support paid, by either having a lesser amount of support for a longer period of time, or a higher amount of support for a shorter period of time.
Spousal Support Guidelines with Children
Spousal support when there is child support payable, is an amount that results in 40% to 46% of the parties’ individual net disposable income going to the recipient. Net Disposable Income is defined for the payor as Guideline income minus child support payable , minus taxes and deductions (such as CPP, U.I., and work insurance contributions but not pension or RRSP deductions). For the payee, it is Guideline income minus notional child support (what the Child Support Guidelines would require if the recipient was paying child support), minus taxes and deductions plus Government benefits and credits. Unfortunately, because the formula is quite complicated, it needs the use of the professional computer software to calculate.
The duration of support when child support is payable is indefinite but with some outside limits. In the longer marriage (10 years or more) it is the same when there are no children, therefore 2 to 1 year for each year of cohabitation and for a shorter marriage, it would be until the youngest child finishes high school. In shorter marriages, however, there could be review conditions attached.
The amount of support will get a little more confusing for shared and split custody and when the payor of spousal support is the recipient of child support.
Like support when there is no child support payable there are factors, though not exhaustive, to help determine what end of the range would be appropriate. Those factors are:
- A strong compensatory claim
- The recipient’s age and the number and ages of the children
- The needs and abilities of the payor spouse
- The needs and standard of living of the recipient and the children
- The length of the marriage
- Self-sufficiency incentives
Ceiling and Floors
The Guidelines state that there is discretion when the gross annual income of the payor is over $350,000 and when support is to be paid where the payor earns under $20,000.
Variation, Review, Remarriage, Second Families
The formulas are to apply to initial Orders and in the negotiation of initial agreements. The authors of the Guidelines hope that, after some experience, they will be able to deal more fully with such issues as post-separation increases in the payor’s income, re-partnering, re-marriage and second families.
There was a major need for Spousal Support Guidelines. Professors Thompson and Rogerson are to be congratulated for doing such an excellent, comprehensive job on a very difficult topic. It is an excellent start but it is just a start, which they themselves recognize. This is why “Advisory” is in the title of their paper and why the process is that they invite suggestions and will make changes based upon experiences of lawyers and judges. Perhaps after that time they will be more than advisory Guidelines in that they will be mandatory like the Child Support Guidelines. I hope that will eventually be the case, though it took a while, lawyers and Judges treat these guidelines as mandatory and case law now says if the guidelines are not used the Judge must say why are they not being used.
A major complaint is that entitlement was not dealt with in the Guidelines. Fortunately, it has not really become a battleground for lawyers to spend their clients’ time and money to argue about.
The Guidelines should have narrower ranges, or clear rules when to use what range so to ensure there is little discretion for the judges and so less arguing between lawyers. The history with the Child Support Guidelines has shown that where certain major issues still leave wide discretion – like joint custody, extraordinary expenses and university costs – major differences in results often occur.
We will have to see these Guidelines applied in practice to know whether they bring fairness, consistency and a reduction of family law litigation. It will be interesting to see how much and which factors are going to influence the ranges the Guidelines allow.