Spousal Support Advisory Guidelines July 2008
The Advisory Guidelines do not deal with entitlement. They deal with the amount and duration of support after a finding of entitlement. The informal status of the Guidelines means that they must remain subject to the entitlement provisions of the Divorce Act, notably ss. 15.2(4) and (6), as interpreted by the courts. Entitlement therefore remains a threshold issue to be determined before the Guidelines will be applicable. On its own, a mere disparity of income that would generate an amount under the Advisory Guidelines formulas does not automatically lead to entitlement.
The Advisory Guidelines were drafted on the assumption that the current law of spousal support, post-Bracklow, offers a very expansive basis for entitlement to spousal support. As a general matter, if there is a significant income disparity at the end of the marriage, there will be an entitlement to some support, leaving amount and duration as the main issues to be determined in spousal support cases. The Advisory Guidelines do not, however, pre-determine when an income disparity will be large enough to create entitlement, leaving that issue to the courts. Nor do the Guidelines preclude the possibility that courts may find no entitlement on particular facts despite a fairly significant income disparity.
We recognize that the Advisory Guidelines may, over time, shape understandings of entitlement. But this will be part of the normal evolution of the law in this area. It is also possible that the law of entitlement may change over time, if the Supreme Court of Canada or an appellate court were to decide to narrow or refine Bracklow.
Concerns have been raised that the Advisory Guidelines will generate more litigation, or more potential for litigation, on the issue of entitlement as payors will view this as a way of avoiding the application of the Guidelines. In our view, an increased focus on the issue of entitlement would not necessarily be a bad thing given the absence of analysis that tends to prevail in this area of law. And realistically, serious entitlement issues arise only in a relatively narrow range of cases. At this point, we have seen no evidence of increased litigation on entitlement.
Since the release of the Draft Proposal we have found that the threshold issue of entitlement is often ignored in practice, with entitlement simply being assumed because there is a difference in spousal incomes that generates an amount of support under the formulas as displayed by the software. We emphasize once again that this is incorrect. There must be a finding (or agreement) on entitlement before the formulas and the rest of the Guidelines are applied.
Furthermore, entitlement is not just a threshold issue; entitlement matters throughout the Guidelines. Even where entitlement is found, as it often will be where there is a substantial income disparity, the basis for entitlement in a particular case, e.g. compensatory or non-compensatory, informs the whole subsequent Guidelines analysis, including the discretionary judgments that need to be made on location within the ranges, restructuring and exceptions. As well, issues of continuing entitlement arise on variation and review, most obviously in the context of applications to terminate spousal support. A crucial step in a Guidelines case is identifying the basis for entitlement with reference to the Divorce Act objectives and the leading decisions, such as Moge and Bracklow.
In some cases the threshold entitlement analysis will determine that there is no entitlement to spousal support and hence that the Advisory Guidelines are not applicable. As noted above, current spousal support law, post-Bracklow, does provide a broad basis for entitlement. Moge created a broad basis for compensatory claims for spousal support based on economic disadvantage from the marriage or the conferral of an economic advantage upon the other spouse. But even if it is not possible for a lower-income spouse to make a compensatory claim, Bracklow has provided the possibility of a non-compensatory claim based on need or hardship created by the loss of the marital standard of living. Typically a significant disparity in income at the point of marriage breakdown will create an entitlement to some support — at the very least to some time-limited, transitional support.
However, the case law does show that there may be a finding of "no entitlement" despite income disparity. Under the current law it is possible to argue that an income disparity reflects neither economic disadvantage flowing from the marriage nor economic need and hence that there is no entitlement to support. Lawyers using the Advisory Guidelines need to remain aware of these possibilities.
We do not offer here a comprehensive review of the case law on entitlement, as this issue is outside the scope of the Guidelines, but merely flag some of the kinds of cases in which courts have found no entitlement to spousal support. Some "no entitlement" cases involve findings that the parties, because of differences in their asset positions or their costs of living, have similar standards of living despite an income disparity. In others, the income disparity is the result of post-separation events or choices, such as a job loss on the recipient’s part or a post-separation increase in the payor’s income. Finally, in some cases courts have found that any compensatory or needs-based claims have been met through property division, including in B.C a reapportionment of assets to meet self-sufficiency concerns, thus eliminating entitlement to spousal support.
There are relatively few reported cases where entitlement has not been found. This could be read as confirming the broad basis for entitlement under the current law; alternatively, it could suggest that entitlement issues, even if raised on the facts of particular cases, are often not worth litigating and are settled. Significantly, many of the no entitlement cases involve somewhat atypical fact situations: short marriages, second marriages, claims by men, or claims by non-custodial parents.
Cases where no entitlement is found despite a significant income disparity are infrequent. However, an analysis of entitlement is not only relevant at the threshold stage of determining whether any spousal support at all is to be paid. Even in cases where entitlement is found and spousal support is awarded, an analysis of the basis of entitlement is a necessary underpinning to the determination of the amount and duration of support.
The compensatory and non-compensatory bases for spousal support need to be delineated as they generate different support outcomes. The Advisory Guidelines reflect these different bases. For example, as will be shown in Chapters 7 and 8, the without child support formula reflects non-compensatory support considerations in its application to cases of short and medium length marriages with no children while the with child support formula is largely compensatory. In cases of longer marriages under the without child support formula the awards reflect a mix of compensatory and non-compensatory claims.
The delineation of the compensatory and/or non-compensatory basis for entitlement in a particular case is relevant at two particular points in the application of the Guidelines:
- to determine location within the ranges; and
- to determine whether or not the case justifies a departure from the ranges as an exception.
With respect to determining location within the range, in longer marriages under the without child support formula, a strong compensatory claim may, for example, suggest an award at the high end of the range whereas a non-compensatory claim based only upon loss of the marital standard of living may suggest an award at the lower end of the range. As well, compensatory claims can be more or less extensive, depending upon the degree of economic disadvantage experienced because of labour force withdrawal. A fuller discussion of using the ranges is found in Chapter 9.
The use of the exceptions is dealt with in more detail in Chapter 12. We simply note here that two exceptions are triggered by compensatory claims that may not be adequately satisfied by the formula ranges: the compensatory exception for short marriages without children and, in cases with children, the s. 15.3 exception for compensatory claims that must be deferred because of the priority of child support. The application of both of these exceptions therefore requires a delineation of the basis for entitlement.
Entitlement issues can also arise on review and variation, most obviously in the context of applications to terminate spousal support. Such applications may be triggered by the recipient’s remarriage or by the recipient’s employment or simply by the passage of time. In many cases duration under the Advisory Guidelines is indefinite (duration not specified), thus requiring a discretionary determination of whether termination is appropriate. Even in cases where the Advisory Guidelines generate a range for duration, courts may sometimes prefer to make the initial order indefinite and later deal with the issue of termination on a subsequent review or variation, particularly where the suggested time limits are fairly lengthy.
Determining whether termination is appropriate will often require an analysis of whether the initial basis for entitlement continues to exist. Although the issue on termination is often framed in terms of whether the recipient has become "self-sufficient", the issue can also be seen as one of whether there is a continuing entitlement to support. The determination of when a spouse has become self-sufficient is one of those "hard" issues in the law of spousal support that was there before the Advisory Guidelines. While the Guidelines, as discussed in Chapter 13, take into account the obligation to make reasonable efforts towards self-sufficiency, they do not determine the hard issue of when self-sufficiency has been achieved and the law on this continues to evolve.
The result on a termination application may differ depending on whether the initial award was compensatory or non-compensatory in nature, reinforcing once again the need for a delineation of the basis for entitlement. For example, remarriage may not mean an end to entitlement if the original basis for the support order was compensatory, but it may if the basis was non-compensatory.
Thus far we have talked about how entitlement issues arise in the context of applications to reduce or terminate spousal support. Reviews or variations may also give rise to entitlement issues of a somewhat different sort when the recipient applies for an increase in spousal support, either because of a decrease in the recipient’s income or a post-separation increase in the payor’s income.
As we emphasize in Chapter 14 which deals with the application of the Guidelines in the context of review and variation, one cannot determine the spousal support outcome in these cases simply by applying the formulas to the new incomes. The current law requires in each of these cases that there be a threshold determination of whether the change in income is relevant to the support obligation and if so, to what extent. The issue can be seen as one of "entitlement," although it is not always framed in that language, and the analysis requires going back to the compensatory and non-compensatory bases for spousal support. Cases involving a post-separation increase in the payor’s income, for example, can be thought of as raising the issue of the recipient’s entitlement to share in that increase.
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