Spousal Support Advisory Guidelines July 2008
The formulas generate ranges for amount and for duration as well unless the conditions for indefinite (duration not specified) support are met. The ranges allow the parties and their counsel, or a court, to adjust amount and duration to accommodate the specifics of the individual case in light of the support factors and objectives found in the Divorce Act.
In this section we can only highlight in the most general way the sorts of factors that could be taken into account in fixing precise amounts and time periods and that might push a determination up or down within the ranges. Most of the relevant factors will be the same as those that now operate within the present discretionary case law, the difference being that here they will operate within the boundaries created by the formulas. Also, as under current law, no single factor will be determinative and several factors may be at play in any given case, sometimes pushing in different directions.
A strong compensatory claim will be a factor that favours a support award at the higher end of the ranges both for amount and duration. A spouse who has suffered significant economic disadvantage as a result of the marital roles and whose claims are based on both compensatory and non-compensatory grounds may have a stronger support claim under the without child support formula than a spouse whose economic circumstances are not the result of marital roles and who can only claim non-compensatory support based upon loss of the marital standard of living. In Examples 7.1 and 7.5, both of which involved long marriages where one spouse sacrificed employment opportunities as a result of child care responsibilities, this factor of a strong compensatory claim could weigh in favour of an award at the higher end of the range in as compared to some of our other examples where there were no children.
Under the with child support formula, compensatory principles would also suggest that the more the recipient spouse gave up in the paid labour market, the higher one would go within the range. To give a simple example, two tax lawyers marry fresh out of law school, but one stays home with the children and the other pursues a career within a large law firm. Compensatory logic would dictate that something close to the maximum 46 percent of INDI would make sense here, as the payor spouse’s income is a very good proxy measure of where the recipient spouse would have been. Given the presence of dependent children under this formula, almost every case will have a compensatory element and the lower and higher ends of the range reflect that. What moves a case up or down the range is the relative strength or weakness of the compensatory claim.
In a case where the recipient has limited income and/or earning capacity, because of age or other circumstances, the recipient’s needs may push an award to the higher end of the ranges for amount and duration.
Conversely, the absence of compelling need may be a factor that pushes an award to the lower end of the range, for example, where the recipient already has a solid base of employment or other income. Or the recipient spouse may have reduced living expenses, living in a mortgage-free matrimonial home or subsidized housing or family-provided housing. Or the recipient may be cohabiting with a new partner, thereby reducing her or his expenses.
In Example 7.4, where Jennifer is unemployed at the age of 57, this need factor might weigh in favour of an award at the higher end of the range. Example 7.2, in contrast, where Sue is only 38 and earning $25,000 per year, the need factor may not be as compelling, suggesting an award at the lower end of the range. In Example 7.1 the absence of compelling need on Ellen’s part, given her income of $30,000 per year, might suggest an award at the lower end of the range, but this would be counter-balanced by Ellen’s strong compensatory claim.
The age, number and needs of the children will affect placement within the range under the with child support formula. A child with special needs will usually demand more time and resources from the care-giving parent, thus reducing that parent’s ability to earn in the paid labour market and pushing spousal support towards the upper end. The same will generally be true for the parent with primary care of an infant or toddler, as contrasted to care of an older child or adolescent. That lower base of income will generate a higher range for amount, of course, but here we speak of location within the range as well.
Generally speaking, when ability to pay is in issue, the larger the number of children, the less income is left available to pay spousal support, and the ranges will be lower, consistent with s. 15.3 of the Divorce Act. In these cases of squeezed ranges for spousal support, there will be strong reasons to go higher in this "depressed" range, to generate some compensatory support for the primary parent. As income levels rise for the parents of three or more children, the spousal support ranges will adjust upwards and there will be more flexibility for the location of amount within the ranges.
Standard of living concerns may also tend to push spousal support awards towards the higher end of the range. Even when spousal support is at the maximum 46 percent of individual net disposable income, a homemaker recipient and the children will be left with a noticeably lower household standard of living (assuming no new partners or children for either spouse). At lower income levels, the needs of the children’s household will create pressure to move to the higher end of the range.
Need and limited ability to pay on the part of the payor spouse may push an award to the lower ends of the ranges. These factors will clearly have special importance at the lower end of the income spectrum, even above the floor of $20,000. (The floor is discussed further in Chapter 11 below.) In some cases where the need of the lower-income recipient spouse is pressing, the lower-income payor spouse may also be struggling to maintain some modest standard of living.
Even though the without child support formula uses gross incomes to work out the amounts, it is always important to look at the net income consequences of any particular amount of spousal support, especially for the payor. In longer marriages under this formula, where the formula percentages are higher, this is critical, especially where the payor has large mandatory deductions, including any pension deductions, compared to the recipient. These deductions may be a factor in going lower in the range for amount.
The with child support formula uses net incomes for its calculations, adjusting for tax and certain standardized deductions. But this formula does not deduct mandatory pension contributions, for the reasons explained in Chapter 8 above. Mandatory pension deductions may become an important factor to select a lower amount within the ranges at lower income levels, to ensure that the payor spouse has enough net income for his or her own needs.
Also a concern for lower income payors under the with child support formula will be their direct spending on expenses for the children during their time with the children. A lower income payor should be left with sufficient funds to exercise meaningful access to his or her children.
The previous factor focussed upon the needs and ability to pay of the payor. Here we want to isolate a separate concern, the need to preserve work incentives for the payor. This concern will be particularly important in two situations: long marriages under the without child support formula and most cases of substantial child support under the with child support formula. The problem will be most acute at low-to-middle income levels.
Here we are not speaking about employment deductions from the payor’s pay, discussed immediately above. One obvious concern here is the additional out-of-pocket costs of going to work every day, not covered by any employer and not reflected in income or deductions from pay, e.g. clothing, commuting to work, parking, tools, etc. For example, where a payor has substantial commuting expenses in an urban area, this may be a factor for going lower in the range.
A less precise, but perhaps more important, concern under this heading is the payor’s net income after payment of taxes, deductions, child support (if any) and spousal support, and the marginal gain in this remaining income from any additional gross income earned. This more nebulous work incentive concern will come to the fore where the payor is working in the paid labour market and the recipient is not, especially under the without child support formula. In longer marriage cases under this formula, the percentages of gross income will be high enough to raise this issue, making it a factor to go lower in the range for amount.
Under the with child support formula, the recipient may be home full time with the care of children, so that this argument of "work incentive" is less compelling. And, under either formula, if the recipient of spousal support is also working, whether full-time or part-time, this version of "work incentive" for the payor virtually disappears.
Underpinning the Advisory Guidelines is a basic assumption that the parties have accumulated the typical family or matrimonial property for couples of their age, incomes and obligations, and that their property is divided equally under the matrimonial property laws. Significant departures from those assumptions may affect where support is fixed within the ranges for amount and duration.
An absence of property to be divided might suggest an award at the higher end of the range. If the recipient receives a large amount of property, the low end of the range might be more appropriate. Similarly, if the recipient holds sizeable exempt or excluded assets after division, that too might militate in favour of the lower end of the range.
Where one spouse assumes a disproportionate share of the family debts, it may be necessary to use the debt payment exception described below in Chapter 12. But there will be other cases, not so severe, where the debt payments of one spouse will just be a factor pushing the amount higher or lower within the range, depending upon which spouse is paying the debts.
Self-sufficiency incentives may push in different directions. As often happens under the current case law, support might be fixed at the lower end of the ranges to encourage the recipient to make greater efforts to self-sufficiency, although imputing income also goes a long way towards responding to this concern. On the other hand, the need to promote self-sufficiency might lead to an award at the higher end of the range where this could mean that a recipient spouse obtains re-training or education leading to more remunerative employment and less support in the long term. Self-sufficiency issues are discussed at greater length in the separate Chapter 13 below.
This is not an exhaustive list, but rather an attempt to identify some of the more obvious factors that might affect how and where amount and duration are fixed within the ranges. The ranges also allow room for local and regional differences in support outcomes, recognizing that awards in some parts of the country are higher than in others.
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