In Canada, there is a set of spousal support advisory guidelines that are relied upon by lawyers and judges to calculate how much spousal support is payable (and for how long) when a couple separates or divorces.
You can use these guidelines to help you and your spouse reach an agreement if you are currently going through a separation and wondering how much support needs to be paid, and by whom.
However, it is critical to remember that the parties’ circumstances will dictate any spousal support payable. A support payor’s earnings and a support recipient’s earning power and whether they have any children will affect whether one party must pay spousal support.
This is all explained below.
What Is Spousal Support?
Spousal support, sometimes referred to as “alimony,” is usually a regular sum of money payable by one ex-spouse to another after a separation or divorce to ease the financial burden of the breakdown of a relationship.
This may be a weekly, bi-weekly, or monthly payment (or in some cases a one-time, lump-sum payment) and it can be permanent, indefinite, or temporary. Spousal support is a legal obligation and failure to follow a court order or agreement can have serious consequences for the individual concerned.
The Canadian family law system is designed to achieve a fair and equitable financial arrangement after a couple separates so that one partner is not left unfairly disadvantaged by the break-up. And it recognizes that finances are an important part of any relationship.
If one partner faces financial hardship because of the separation, spousal support is seen as a way to redress the financial imbalance that has occurred as a result of the breakdown of the relationship.
For example, in many marriages, one partner is the main caregiver for the children and homemaker and may only be able to work part-time or not at all, while the other partner works full-time and has a higher income.
In the event of separation, the lower-income partner would likely be disadvantaged without spousal support payments.
Current income is important when calculating spousal support but it is not the only factor to consider. The following should also be taken into account:
- Duration of the marriage
- Roles played by each partner in the marriage
- Employability of the lower-income spouse
- Age of the lower-income spouse
- Education of the lower-income spouse
- Work experience of the lower-income spouse
- Health of the lower-income spouse
- Ability of the lower-income spouse to be self-sufficient
What Types of Spousal Support Are Available to Potential Support Recipients?
In Canada, two different formulas are used for calculating spousal support – one for if there are children from the relationship and child support is payable (the with child support formula) and a separate one if there are no children.
If the support payor must pay child support (which is considered of primary importance after the breakdown of a marriage where the parties have children), he or she will generally pay less spousal support.
Formula Used When There Is No Child Support
When there is no child support payable, the most important factors in determining the amount and duration of spousal support payable are the relative incomes of the ex-partners and the length of the relationship.
After you calculate the difference in gross income between the partners, the amount of support will generally be 1.5 to 2 percent of this difference for each year of the marriage (up to 25 years).
The duration of support ranges from half to one year for each year of the relationship. After 20 years, support becomes indefinite.
If the support payee has a diminished earning capacity (e.g. due to age, health reasons, etc.), the support may also be indefinite.
Example
A husband (aged 45 at separation) and a wife (aged 41 at separation) separated after 19 years of marriage. The husband earned $100,000 per year and the wife $40,000 per year.
Difference in income = $60,000
Divided by 12 months = $5,000
At the lower end of the scale the amount of spousal support due per month would be:
$5,000 x 1.5% x 19 years of marriage = $1,425
At the higher end of the scale the amount of spousal support due would be:
$5,000 x 2% x 19 years of marriage = $1,900
Formula Used With Child Support
In the family court in Canada, children’s rights to financial security are given precedence over those of the parents during separations.
Because child support amounts are often significant, this generally reduces the amount of child support payable.
The formula used requires calculating the Individual Net Disposable Income (INDI) for both parties (the payor and the recipient):
For the Payor:
Guidelines Income amount – child support – taxes and deductions + government benefits and credits.
For the Recipient:
Guidelines Income amount – notional child support – taxes and deductions + government benefits and credits.
The INDI amounts are then combined. The spousal support amount is calculated when the lower-income spouse achieves between 40 and 46 percent of the total INDI.
As you can see, this is a complex calculation that requires specialized software and usually the assistance of a spousal support lawyer.
Do the Same Rules Apply For High-income or Low-income Earners?
If the payor earns a gross annual income in excess of $350,000, the above formulas may not be used.
Often, spousal support will increase above this threshold for high-net-worth individuals, according to the discretion of the courts.
For those who earn less than $20,000 per year, spousal support is generally not payable.
Can You Calculate Spousal Support On Your Own?
While some couples do attempt spousal support calculations themselves, you have seen that it is not usually as simple as punching numbers into a spousal support calculator. Indeed, unlike child support, spousal support is not automatically payable. And when it is payable, the spousal support guidelines produce a range of amounts payable and a range of time periods during which it is payable. As a result, even when spousal support is payable, the process of determining how much is payable, and for how long, is complicated. For this reason, it is best to consult a spousal support lawyer for an accurate idea of where you stand, either a potential payor or recipient.
If you are based in the Ontario area and you are struggling to reach an agreement with your ex-spouse on spousal support or any other aspect of your divorce or separation agreement, contact Amiri Family Law for an initial discussion about your matter.