Spousal Support Advisory Guidelines July 2008

7. THE WITHOUT CHILD SUPPORT FORMULA (cont'd)

7.5 The Formula for Duration

As with amount, duration under the without child support formula increases with the length of marriage. Subject to the provisions for indefinite support (duration not specified), the formula generates ranges for duration with the ends of the ranges determined as follows:

• a minimum duration of half the length of the marriage and
• a maximum duration of the length of the marriage.

It is important to remember, as discussed in Chapter 5 on application, that any periods of interim support are to be included in the durational ranges.

The ranges for duration under the without child support formula are admittedly very broad, allowing for an award at the top end of the range that is effectively double in value that at the bottom end. This will be particularly significant in medium-length marriages. Given the uncertainties in the current law on duration, it was not possible to come up with tighter ranges.

The formula also provides for indefinite support (duration not specified) in two circumstances:

• when the marriage has been 20 years or longer in length; or
• when the marriage has lasted five years or longer, if the years of marriage plus the age of the support recipient at the time of separation equals or exceeds 65 and (the rule of 65).

The "rule of 65" recognizes that length of marriage cannot be the only factor in determining the duration of spousal support in marriages without dependent children. Age is also a significant factor as it affects the ability to become self-supporting.

7.5.1 The Tendency to Ignore Duration

Our monitoring of the use of the Advisory Guidelines since the release of the Draft Proposal has shown that in practice the durational aspect of the without child support formula is often ignored. The formula is used to determine the amount of spousal support, but not duration. In some cases awards are for shorter periods of time than the formula suggests. In other cases the durational limits are ignored in favour of indefinite orders.

To ignore duration is to misapply the without child support formula. Amount and duration are interrelated parts of the formula — they are a package deal. Using one part of the formula without the other undermines its integrity and coherence. If the durational limits were to be systematically increased, for example, by lowering the threshold for indefinite support, the formula would have to be redesigned and the amounts decreased. Within the scheme of the Advisory Guidelines itself, adjustment of duration beyond the formula requires restructuring and will involve a corresponding adjustment of amount.

In what follows we discuss in more detail four aspects of the formula for duration under the without child support formula: indefinite support, the "rule of 65", time limits in short marriages, and time limits in medium-length marriages. The real problem of duration under this formula has proven to be this last aspect, the use of time limits in marriages that are neither long nor short.

7.5.2 The meaning of "indefinite" support

In using the term "indefinite" we simply adopted a word that had been used for years in spousal support law to mean "an order for support without a time limit at the time it is made". Under the Advisory Guidelines an order for indefinite support does not necessarily mean permanent support, and it certainly does not mean that support will continue indefinitely at the level set by the formula.

Under the current law, orders for indefinite support are open to variation as the parties’ circumstances change over time and may also have review conditions attached to them. The Advisory Guidelines do nothing to change this: "indefinite" support means support that is subject to the normal process of variation and review.

Through the process of review and variation the amount of spousal support may be reduced, for example if the recipient’s income increases or if the recipient fails to make reasonable efforts to earn income and income is imputed. Support may even be terminated if the basis for entitlement disappears. It is true that current law supports the idea that after long marriages spousal support will often be permanent, even if the amount is subject to reduction to reflect the recipient’s obligation to pursue self-sufficiency.

In practice, however, most orders for indefinite support after long marriages will be significantly modified, if not eliminated, after the retirement of the payor and the receipt of pension income by the payor and the recipient. "Indefinite" often means "until the payor reaches 65". Variation and review in the context of the Advisory Guidelines are discussed in more detail in Chapter 14.

After the release of the Draft Proposal we were very surprised to learn from our feedback sessions that the term "indefinite" in the Advisory Guidelines was being misinterpreted by many as meaning "infinite" or "permanent."

We realized that we would have to develop a new term to express the concept that indefinite orders are not necessarily permanent, that they are subject to review and variation and, through that process, even to time limits and termination. Our solution has been to add "duration not specified" as a parenthetical explanation whenever the term "indefinite" is used in the formulas, i.e. indefinite (duration not specified).

7.5.3 The "rule of 65": the age factor and indefinite support

The without child support formula provides that indefinite (duration not specified) support will be available even in cases where the marriage is shorter than 20 years if the years of marriage plus the age of the support recipient at the time of separation equals or exceeds 65. In a shorthand expression, we described this as the "rule of 65".

Thus, if a 10 year marriage ends when the recipient is 55, indefinite (duration not specified) support will be available because years of marriage (10) plus age (55) equals 65. Note that this is only a "rule" about duration, as the amount of support would be limited by the length of the marriage, i.e. 1.5 to 2 per cent per year or 15 to 20 per cent of the gross income difference in a 10-year marriage.

In reality, given the ages of the parties in the cases covered by the rule of 65, there will likely be significant changes in the amount of support ordered upon the retirement of one or both of the spouses. This refinement to the formula for duration is intended to respond to the situation of older spouses who were economically dependent during a medium length marriage and who may have difficulty becoming self-sufficient given their age.

The "rule of 65" for indefinite (duration not specified) support is not available in short marriages (under 5 years in length). The assumption in the current law is that short marriages generate only limited support obligations.

In the Draft Proposal, we struggled with the issue of whether an age component should always be required for indefinite (duration not specified) support — i.e. whether the "rule of 65" should apply even in long marriages. Under a 20 year rule with no age requirement, for example, a 38 year-old spouse leaving a 20 year marriage would be entitled to indefinite (duration not specified) support. Some would argue that indefinite (duration not specified) support is not appropriate for a spouse who is still relatively young and capable of becoming self-sufficient. If the "rule of 65" were generally applicable, support would not become indefinite (duration not specified) even after a 20 year marriage unless the recipient were 45 years of age or older.

Several considerations led us to the conclusion that a 20-year rule without any age requirement was the more appropriate choice. First, a spouse who married young and spent the next 20 years caring for children could be more disadvantaged than someone who married when they were older and had been able to acquire some job skills before withdrawing from the labour force. As well, under the current law it would be very difficult to impose a time-limit on support after a 20 year marriage, even if self-sufficiency and an eventual termination of support were contemplated at some point in the future. The typical order would be an indefinite order subject to review and/or variation. An order for indefinite support (duration not specified) under the Advisory Guidelines is no different.

Despite the frequent misinterpretation of the meaning of "indefinite", there was no pressure to change either of the conditions for indefinite support. Most of the feedback about the "rule of 65" focussed on technical issues of its application, as there was general agreement on the "rule".

7.5.4 Time limits in short marriages

The current law of spousal support has no difficulty with time limits in short marriages without children. Time limits, or lump sum orders, are common in these cases. Even in those jurisdictions where appeal courts have discouraged the use of time-limited support, discussed below, short marriages without children are identified as permissible exceptions. In practice, we were told in the feedback phase, these cases are not a problem.

7.5.5 Lowering the threshold for indefinite support?

In some parts of the country, it is very difficult to time limit spousal support, by reason of appellate decisions or local practices. For marriages of less than 20 years, the Draft Proposal incorporated time limits, although these were generous time limits. During the feedback phase, we did canvass the possibility of lowering the threshold for indefinite support, below 20 years.

We found little support for such a change. Even those who wanted to lower the threshold could not agree on what that new threshold should be. Many lawyers, mediators and judges expressed their frustration with the current law on duration, especially their perceived inability to use time limits in a sensible way. The durational limits in the Advisory Guidelines were seen as providing some structure for negotiations, initial decisions and variation or review. Lowering the threshold for indefinite support would not solve the problem and would in practice undermine the usefulness of the Guidelines.

7.5.6 The problem of time limits in medium length marriages

The real "problems" for time limits under the without child support formula are concentrated in marriages that are neither "long" (20 years or more) or "short" (under 5 years). For marriages that last 6 to 19 years, in every jurisdiction we were told, it becomes increasingly difficult to impose time limits on initial support orders as the marriage lengthens. At some point, in each jurisdiction, the time limits were seen as inconsistent with the current law on duration. At the same time, as we explained above, many lawyers, mediators and judges wanted to see more use of time limits.

It is certainly true that after Moge time limits fell into disfavour because of the associated problems of "crystal ball gazing" and arbitrary terminations of spousal support where self-sufficiency was "deemed" rather than actually achieved. Time-limited orders became less common. However, since Bracklow, some judges have brought back time limits, at least for non-compensatory support orders. While time limits are frequently negotiated by parties in agreements and consent orders, the law on time limits remains uncertain. In some parts of the country trial courts feel bound by appellate court rulings confining time-limited orders to a narrow range of exceptional cases, primarily short marriages without children.

It is in marriages of medium length that duration remains uncertain. Here practice varies and depends upon many factors — regional support cultures and the governing provincial appellate court jurisprudence; whether the context is negotiation or court-ordered support; and whether the support claim is compensatory or non-compensatory in nature. The most that can be said is that current law is inconsistent on the issue of time limits in medium-length marriages.

In practice the issue of duration in medium-length marriages is often put off to the future, to be dealt with through ongoing reviews and variations. In some cases this process of review and variation may eventually generate a time-limited order leading to termination. Under current practice uncertainty about duration can generate low monthly awards, as judges or lawyers fear that any monthly amount of support could continue for a long time, even permanently.

In developing the Draft Proposal, it was our view that reasonable time limits for medium length marriages would be an essential element of the scheme, under both the without child support and with child support formulas, especially if the Guidelines were to generate reasonable monthly amounts. Bracklow emphasized this interrelationship between amount and duration, recognizing that a low award paid out over a lengthy period of time is equivalent to an award for a higher amount paid out over a shorter period of time. As well, we were aware of the importance of providing structure in this area to facilitate negotiation and settlement. Recognizing that this was an area of law in flux, we saw a role for the Advisory Guidelines in helping to shape the developing law.

In assessing the compatibility of the time limits generated by the without child support formula with current law it is important to keep in mind that they are potentially very generous; in medium length marriages they can extend for up to 19 years. These time limits are thus very different from the short and arbitrary time limits, typically of between three to five years, that became standard under the clean-break model of spousal support for medium-to-long marriages and which Moge rejected. The time limits generated by the formula should be assessed in context — they are potentially for lengthy periods of time and, once marriages are of any significant length, operate in conjunction with generous monthly amounts.

As well, it is important to keep in mind that in the context of the without child support formula, support claims in medium-length marriages will typically be non-compensatory. In non-compensatory support cases, one strand of the post-Bracklow case law recognizes the appropriateness of time limited orders when the purpose of the support order is to provide a period of transition to a lower standard of living rather than compensation for lost career opportunities. Such use of time limits does not involve "crystal-ball gazing" and the making of arbitrary assumptions about future developments, but rather reflects the basis of entitlement.

In Chapter 8 you will see that we dealt with the issue of time limits in short and medium-length marriages with children somewhat differently, because of the strong compensatory claims in such cases and the need for individualized assessment of recipients’ challenges in over-coming disadvantage resulting from the assumption of the child-rearing role.

We recognize that some provincial appellate court jurisprudence may at this point create barriers to the use of the formula’s time-limits by trial judges. We also recognize that the lengthy time limits potentially generated under the without child support formula — up to 19 years in duration are very different from the typical kinds of time limits with which our law of spousal support is familiar and raise some distinct problems of foreseeability. In our view, the law around time limits will continue to develop and to respond to the durational ranges under the formula. We already see signs of this in the Guidelines case law since the release of the Draft Proposal which offers several examples of judges making somewhat novel time-limited orders for the lengthy durations generated by the without child support formula.[72] In assessing the feasibility of these orders, it is important to remember that time-limited orders are subject to variation. It is thus possible to avoid some of the problems of arbitrary "crystal ball gazing" while reinforcing expectations with respect to the eventual termination of the support order.[73]

As well, in cases where it is not feasible for courts to impose the time limits generated by the formula in initial orders, the time limits can still be used in a "softer", more indirect way to structure the on-going process of review and variation and to reinforce expectations of the eventual termination of the order. This is not dissimilar to the use of the time limits under the with child support formula where they establish the outside limit for indefinite (duration not specified) orders. The fact that courts are reluctant to make time limited orders on initial applications does not preclude the eventual use of time limits on subsequent reviews or variations. The Guidelines case law already offers several examples of this "softer" use of time limits in subsequent variations or reviews to bring an eventual termination to what was initially an indefinite order.[74]

Finally, if the durational limits under this formula, even in their "softer" form, are found to be inappropriate in cases close to the 20 year threshold for indefinite support, restructuring can be used to extend duration. As is explained in Chapter 10, duration can be extended by restructuring so long as an appropriate downward adjustment is made to amount so as to keep the total value of the award within the global ranges generated by the formula.

7.6 Making the Formula Concrete — Some Examples

7.6.1 A short-marriage example

In cases of short marriages, marriages of less than 5 years, the without child support formula generates very small amounts for a very short duration. The formula will always generate time-limits in these cases.[75]

Example 7.2

Karl and Beth were married for only four years. They had no children. Beth was 25 when they met and Karl was 30. When they married, Beth was a struggling artist. Karl is a music teacher with a gross annual income of \$60,000. Beth now earns \$20,000 per year, selling her work and giving art lessons to children. Entitlement is a threshold issue before the Advisory Guidelines apply. On these facts, given the disparity in income and Beth’s limited income at the point of marriage breakdown, entitlement is likely to be found.

The conditions for indefinite (duration not specified) support do not apply and duration would be calculated on the basis of .5 to 1 year of support for each year of marriage.

To determine the amount of support under the formula:

• Determine the gross income difference between the parties:
\$60,000 — \$20,000 = \$40,000
• Determine the applicable percentage by multiplying the length of the marriage by 1.5-2 percent per year:
1.5 X 4 years = 6 %
to
2 X 4 years = 8 %
• Apply the applicable percentage to the income difference:
6 percent X \$40,000 = \$2,400/year (\$200/month)
to
8 percent X \$40,000 = \$3,200/year (\$267/month)

Duration of spousal support = (.5-1) X 4 years of marriage = 2 to 4 years

The result under the formula is support in the range of \$200 to \$267 per month for a duration of 2 to 4 years.

In practice, this modest award would likely be converted into a lump sum using restructuring, discussed in Chapter 10.

7.6.2 Some medium-length marriage examples

In medium-length marriages (5 to 19 years), the formula generates increasing amounts of support as the marriage increases in length, moving from relatively small percentages at the shorter end of the spectrum to relatively generous amounts after 15 years, when awards of 30 percent of the gross income difference become possible. Except where the rule of 65 is applicable, the formula generates time limits of varying lengths depending on the length of the marriage. The ranges for duration are, however, very wide, leaving much opportunity to respond to the facts of particular cases.

This category covers a diverse array of cases raising a variety of support objectives. Current law is at its most inconsistent in its handling of these cases. This area posed the greatest challenges to developing a single formula that would yield appropriate results. We concluded that our formula based on merger over time provided the best starting point. But not surprisingly, it is in these cases that there will be the most frequent need to rely upon restructuring to massage the formula outcomes and where there will likely be the greatest resort to exceptions.

Example 7.3

Bob and Susan have been married 10 years. They married in their late twenties and Sue is now 38. Bob is employed as a computer salesman and Sue is a hairdresser. Both worked throughout the marriage. There were no children. Bob’s gross annual income is \$65,000; Sue’s is \$25,000.

Entitlement is a threshold issue before the Advisory Guidelines are applicable. An argument might be made that there is no entitlement to support: Sue is employed full time and could support herself, and there is no compensatory basis for support. However, Sue will suffer a significant drop in standard of living as result of the marriage breakdown and, at an income of \$25,000, will likely experience some economic hardship. Current law would suggest an entitlement to at least transitional support on a non-compensatory basis to allow Sue to adjust to a lower standard of living.

The case does not satisfy the conditions for indefinite (duration not specified) support. The marriage is under 20 years and the case does not fall within the "rule of 65" for indefinite support because Sue’s age at separation plus years of marriage is below 65 (38+10=48).

To determine the amount of support under the formula:

• Determine the gross income difference between the parties:
\$65,000 — \$25,000 = \$40,000
• Determine the applicable percentage by multiplying the length of the marriage by 1.5-2 percent per year:
1.5 X 10 years = 15 percent
to
2 X 10 years = 20 percent
• Apply the applicable percentage to the income difference:
15 percent X \$40,000 = \$6,000/year (\$500/month)
to
20 percent X \$40,000 = \$8,000/year (\$667/month)

Duration of spousal support = (.5-1) X 10 years of marriage = 5 to 10 years

The result under the formula is support in the range of \$500 to \$667 per month for a duration of 5 to 10 years.

Consistent with current law, the formula essentially generates modest top-up support for a transitional period to assist Sue in adjusting from the marital standard of living.

An award of \$500 per month, at the low end of the range, would leave Sue with a gross annual income of \$31,000 and Bob with one of \$59,000. An award of \$667 per month, at the high end of the range, would leave Sue with a gross annual income of \$33,000 and Bob with one of \$57,000. In a marriage of this length the formula does not wb-eqht incomes.

Some might find the amounts generated by the formula too low, even at the high end of the range. An argument could be made that, consistent with current law, any transitional order should put Sue somewhat closer to the marital standard of living for the period of gearing down. As will be discussed in Chapter 10, a restructuring of the formula outcome is possible to produce larger amounts for a shorter duration.

Example 7.4

David and Jennifer were married for 12 years. It was a second marriage for both. David was 50 when they met. He is a businessman whose gross annual income is now \$100,000 per year. Now 62, he is in good health, loves his work, and has no immediate plans to retire. Jennifer was 45 when they met, while Jennifer was working in his office. She had been a homemaker for 20 years during her first marriage and had received time-limited support. When they met she was working in a low-level clerical position earning \$20,000 gross per year. Jennifer, now 57, did not work outside the home during the marriage.

Entitlement is a threshold issue before the Advisory Guidelines are applicable. Given the length of the marriage and Jennifer’s lack of income, entitlement to support on non-compensatory grounds would be relatively uncontentious.

The amount of support on an income difference of \$18,000 and a 12 year marriage would be calculated as follows:

18 percent X \$100,000 = \$18,000/year (\$1,500/month)
to
24 percent X \$100,000 = \$24,000/year (\$2,000/month)

This is a case where the "rule of 65" would govern duration. Because Jennifer’s age at separation plus years of marriage is 65 or over (57+12= 69), the formula provides for indefinite (duration not specified) support, rather than the durational range of 6 to 12 years based on length of marriage alone. A variation in amount would, however, be likely when David retires.

The result under the formula is support in the range of \$1,500 to \$2,000 a month on an indefinite (duration not specified) basis, subject to variation and possibly review.

Support at the low end of the range would leave Jennifer with a gross annual income of \$18,000 and David with one of \$72,000. Support at the high end of the range would leave Jennifer with a gross annual income of \$24,000 and David with one of \$66,000. Again, because of the length of the marriage (12 years), the formula does not generate results that approach income equalization.

7.6.3 Some long-marriage examples

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. The long marriages covered by the without child support formula fall into two categories: those where there have been children who are no longer dependent and those where the couple did not have children.

Example 7.1 provides an example of the formula’s application to a long marriage with children where the wife was a secondary earner. Example 7.5, presented below, involves the familiar scenario of a very long traditional marriage.

Example 7.5

John and Mary were married for 28 years. Theirs was a traditional marriage in which John worked his way up the career ladder and now earns \$100,000 gross per year, while Mary stayed home and raised their two children, both of whom are now grown up and on their own. Mary is 50 years of age and has no income. John is 55.

Entitlement to spousal support is clear on these facts and thus the Advisory Guidelines are applicable. Because the length of the marriage is over 25 years, the maximum range for amount applies — 37.5 to 50 percent of the gross income difference (capped at equalization of net incomes).

The range for amount on an income difference of \$100,000 after a 28 year marriage would be:

37.5 percent X \$100,000 = \$37,500/year (\$3,125/month)
to
50 percent X \$100,000 = \$50,000/year (\$4,167/month, capped at \$4048[76] )

Duration is indefinite (duration not specified) because the marriage is 20 years or over in length.

The formula results in a range for support of \$3,125 to \$4,048 per month for an indefinite (unspecified) duration, subject to variation and possibly review.

An award of \$3,125 per month, at the low end of the range, would leave Mary with a gross income of \$37,500 per year and John with one of \$62,500. An award of \$4,048 per month, at the high end of the range, would wb-eqht the net incomes of the parties.

As will be discussed further in Chapter 14, the order is open to variation over time in response to changes in the parties’ circumstances, including increases in Mary’s income or the imputation of income to her if she fails to make reasonable efforts to contribute to her own support. John’s retirement would also likely be grounds for variation.

Example 7.6 involves a long marriage without children.

Example 7.6

Richard is a teacher with a gross annual income of \$75,000. He is in his late forties. His wife, Judy, is the same age. She trained as a music teacher but has worked as a freelance violinist for most of the marriage, with a present gross income of \$15,000 a year. Judy has also been responsible for organizing their active social life and extensive vacations. They were married 20 years. They had no children.

Entitlement will easily be established in this case given the significant income disparity, Judy’s limited employment income, and the length of the marriage.

The range for amount under the formula, based on income difference of \$60,000 and a 20 year marriage is:

30 percent X \$60,000 = \$18,000/year (\$1,500/month)
to
40 percent X \$60,000 = \$24,000/year (\$2,000/month)

Duration would be indefinite (duration not specified) because the marriage was 20 years in length.

The result under the formula is support in the range from of \$1,500 to \$2,000 per month for an indefinite (unspecified) duration, subject to variation and possibly review.

An award at the lower end of the range would leave Judy with a gross annual income of \$33,000 and Richard with one of \$57,000. An award at the high end of the range would leave Judy with a gross annual income of \$39,000 and Richard with one of \$51,000.

Judy will certainly be expected to increase her income and contribute to her own support. The issue in applying the formula will be whether a gross income of \$30,000 a year, for example, should be attributed to Judy for the purposes of an initial determination of support. If so, support under the formula would be lowered to a range of \$1,125 to \$1,500 per month (or \$13,500 to \$18,000 per year).

More likely, Judy would be given some period of time (for example one or two years) before she would be expected to earn at that level, with support to be adjusted at that point, after a review.

7.7 After the Formula

As the examples in this chapter indicate, many issues remain after the application of the without child support formula — issues of choosing an amount and duration within the ranges, restructuring, and exceptions, all addressed in separate chapters below. It is important to keep these other parts of the Advisory Guidelines in mind, particularly in cases involving the without child support formula where restructuring and exceptions will frequently need to be used.

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