Spousal support is a payment made by one spouse, the payor, to the other spouse, the recipient, to help with their day-to-day living expenses or to compensate the recipient for the impact of the financial choices the spouses made during their relationship.
Although anyone who was in a married or unmarried spousal relationship can ask for spousal support, it's important to know that there is no automatic right to receive support just because of the fact that the spouses were married or in a long relationship living together. Whether spousal support will be paid, and, if so, how much will be paid, always depends on the particular circumstances of each couple. There are also date limits for applying for spousal support, which are particularly important for unmarried spouses.
This section provides a overview of the law on spousal support. It talks about the rules under the Divorce Act and the Family Law Act, and takes a deeper dive into how spouses are determined to be entitled to received support and, if entitled, how the amount of spousal support and the length of time is should be paid are calculated. It also looks at agreements and orders about spousal support and the income tax consequences of spousal support payments. The rest of the sections in this chapter explore other issues about spousal support, including the Spousal Support Advisory Guidelines, making changes to spousal support, and the problem of arrears of spousal support.
Just being in a spousal relationship, whether married or unmarried, doesn't give anyone a right to life-long support. You have the right to ask for spousal support, but you don't necessarily have the right to get spousal support. When a spousal relationship ends, each spouse usually needs to become self-sufficient and financially independent in a reasonable amount of time, given the circumstances. This is what the court said about spousal support in the 1997 Supreme Court case of Dumais-Koski v. Koski:
"Marriage is not a legal institution created for the redistribution of wealth."
Or, as the Alberta Court of Queen's Bench put it, in the 2005 case of V.S. v. A.K.:
"A person does not acquire a lifetime pension as a result of marriage. Likewise, marriage is not an insurance policy."
A spouse who is self-sufficient, or readily capable of becoming self-sufficient, will not usually be entitled to receive spousal support at the end of a relationship.
When thinking about a spousal support claim, the court will consider the following questions:
- Is the person applying as a spouse? That is, do they fit within the category of persons allowed to apply? Or, as it is sometimes put, do they have standing to apply?
- Is the person applying in time? That is, have they made their application within the applicable limitation period?
- Has the person demonstrated an entitlement to receive spousal support?
If all of these questions are answered “yes," then the court has to figure out the appropriate amount of spousal support and the length of time, or duration, for which spousal support should be paid.
The answers to the first two questions vary depending on the legislation the person is relying on, either the federal Divorce Act or the provincial Family Law Act. The third question, about entitlement, is common to both the Divorce Act and the Family Law Act. Generally speaking, someone will be entitled to spousal support if they:
- have suffered economic loss or hardship as a result of the relationship or the breakdown of the relationship (called compensatory entitlement),
- have a contract with the other spouse, like a separation agreement or another family law agreement, that requires that spousal support be paid (called contractual entitlement), or
- can't afford to meet their living expenses after separation and the other spouse has the ability and the disposable income to meet that need (called needs-based entitlement).
A person who is asking for spousal support in court must make their application based on one of these grounds. In deciding whether entitlement has been proven, the court will look at the factors and requirements set out in the legislation.
In British Columbia, the amount and duration of support are largely determined according to the Spousal Support Advisory Guidelines.
The law about spousal support
Spousal support is available for married spouses and formerly married spouses under the Divorce Act. Spousal support is also available to married and unmarried spouses under the Family Law Act, which defines "spouse" as including:
- people who are married to each other,
- people who have lived together in a "marriage-like relationship" for at least two years,
- people who lived together in a marriage-like relationship for less than two years and have a child together, and
- former spouses.
(Incidentally, the law in British Columbia doesn't talk about people who are common-law spouses and never has. Once upon a time, people could marry each other and create a legal relationship simply by agreeing to marry, without getting a licence from the government or having a particular kind of ceremony. Because the rights between the spouses came from principles established in the common law, these were known as common-law marriages. Common-law marriages were valid in England until the Marriage Act of 1753, better known by its full and much more flowery name, An Act for the Better Preventing of Clandestine Marriage. Please don't use the term "common-law marriage." It doesn't mean what most people think it means and is two-and-a-half centuries out of date.)
Spousal support is available for all spouses, whether of the same or opposite sexes, and can be agreed to in a separation agreement or ordered by the court.
The Divorce Act
The federal Divorce Act only applies to people who are or were married to each other. In addition to divorce, the Divorce Act also talks about orders for spousal support and changing orders for spousal support.
Only the Supreme Court can deal with claims under the Divorce Act.
If the claim for spousal support is being made under the Divorce Act, the spouses must be or have been married to each other, and the spouse asking for spousal support must have lived in the province in which the court proceeding is started for at least one year before the proceeding started.
The Divorce Act doesn't have any rule about when an application for support can be brought following divorce. Under the Divorce Act, a spouse is always a spouse entitled to apply for support, no matter how long the spouses have been separated or divorced. Nonetheless, the court may dismiss a claim based on delay. (If you wait several years, the court may wonder whether you really needed support at all!) Even though there are no time limits, it's still important to pursue a claim for spousal support as soon as reasonably possible.
The objectives that the court will look at in deciding whether a spouse is entitled to spousal support are set out at section 15.2(6) of the Divorce Act, and are discussed in more detail below. If a spouse is entitled to spousal support, the factors that the court will review to determine the amount of support and the length of time for which it should be paid are set out in section 15.2(4).
Determining the amount and duration of support
If a spouse is found to be entitled to receive spousal support, the Spousal Support Advisory Guidelines will be used to help decide how much support should be paid and for how long it should be paid.
These are the primary sections of the Divorce Act dealing with spousal support:
- section 2: definitions
- section 3: the court's authority to make spousal support orders when a spouse is asking for a divorce order
- section 4: the court's authority to make spousal support orders after the court has made a divorce order
- section 5: the court's authority to change spousal support orders after the court has made a divorce order
- section 15.2: spousal support orders
- section 15.3: child support has priority over spousal support
- section 17: changing spousal support orders
The Family Law Act
The provincial Family Law Act applies to married spouses and to unmarried spouses. The Family Act talks about orders for spousal support, changing orders for spousal support, both going forward and going back in time, and arrears of spousal support.
Both the Provincial Court and the Supreme Court can deal with claims under the Family Law Act.
If the claim for spousal support is being made under the Family Law Act, the spouses must be married to each other or qualify as unmarried spouses. Section 3 of the Family Law Act defines "spouse" as someone who:
- is married to another person,
- has lived with another person in a "marriage-like relationship" for at least two years, or
- has lived with another person in a marriage-like relationship for less than two years and has had a child with that person.
A marriage-like relationship is a committed romantic relationship, not a relationship between people who are just roommates. The courts take a holistic approach in deciding whether a particular relationship is "marriage-like" or not. The relationship doesn't need to be monogamous and the parties don't need to share bank accounts and financial obligations, sleep in the same bed, plan together for their retirement or deaths, or have children together. The courts will decide whether a relationship is "marriage-like" based on all of the circumstances of the relationship. For examples of how the court thinks about unmarried relationships, read the 2007 case of Austin v. Goerz and the 2015 case of Weber v. Leclerc.
Section 198(2)(a) of the Family Law Act says that married spouses must start a court proceeding asking for spousal support within two years of the date of their divorce or an order annulling their marriage. A divorce is an order under the Divorce Act declaring that a marriage is over. An "annulment" is a decision, under the old common law rules about marriage, that a marriage is void or invalid for some reason.
Section 198(2)(b) says that unmarried spouses must start a court proceeding within two years of the date of their separation. “Separation” doesn't necessarily mean that you've moved out. Lots of people separate but continue to live in the same home because it's inconvenient or expensive to move out. Section 3(4) of the Family Law Act says that evidence of separation includes:
- one spouse telling the other of their intention to end the relationship and separate permanently, and
- then acting in a way that shows that the relationship is over.
The sort of behaviours that helps to demonstrate that a relationship is over include things like changing your Facebook status, telling friends and family that the relationship is done, closing a joint bank account, starting to date other people or opening a profile on a dating app, moving into the guest room or sleeping on the couch, going to social events by yourself, and, of course, moving out.
It's important to know that if you've led your spouse to think that the relationship is continuing, or that you don't intend on relying on the time limit within which spousal support claims must be brought, you may not be able to count on the limitation period preventing your spouse from bringing a claim after you've been separated for two years.
The limitation period under the Family Law Act will also be suspended while the spouses are engaged in "family dispute resolution with a family dispute resolution professional." This means that you are:
- actively involved in mediation, a collaborative settlement process or arbitration,
- using a parenting coordinator, or
- getting help from a family justice counsellor.
The objectives that the court will look at in deciding whether a spouse is entitled to spousal support are set out at section 161 of the Family Law Act. If a spouse is entitled to spousal support, the factors that the court will review to determine the amount of support and the length of time for which it should be paid are set out in section 162. Sections 161 and 162 are discussed in more detail later on in this section. The Family Law Act objectives and factors for spousal support are the same as the Divorce Act objectives and factors.
Determining the amount and duration of support
If a spouse is found to be entitled to receive spousal support, the Spousal Support Advisory Guidelines will be used to help decide how much support should be paid and for how long it should be paid.
These are the primary sections of the Family Law Act dealing with spousal support:
- section 1: general definitions
- section 3: the definition of "spouse" and how unmarried people qualify as "spouses"
- section 161: the objectives of spousal support
- section 162: the factors used to determine the amount and duration of spousal support
- section 163: agreements about spousal support
- section 164: setting aside agreements about spousal support
- section 166: the effect of certain kinds of misconduct on spousal support
- section 167: changing spousal support orders
- section 168: reviewing arrangements for spousal support
- section 170: other terms that can be included in support orders
- section 171: spousal support after the payor's death
- sections 172 and 173: spousal support and child support
- section 174: cancelling or reducing arrears of spousal support
- section 198: the time limits within which claims for spousal support must be made
Spousal support and child support
Section 15.3 of the Divorce Act and section 173 of the Family Law Act state that child support must take priority over spousal support. When the payor cannot pay both spousal support and child support, the court is required to make an order for child support at the expense of an order for spousal support. Children come first.
Spousal support and the division of property
The issues of spousal support and the division of family property are somewhat intertwined. Before the Family Law Act became law, the court had to think about spousal support after any property had been divided between the spouses. In other words, how property was divided could have an impact on a spouse's entitlement to spousal support, so that either no support should be paid, or that just a little support should be paid as a sort of top-up to the property the spouse received.
Under the Famaily Law Act, the order is reversed. The court considers spousal support first and the division of property might be adjusted if the payor of spousal support can't afford to pay the amount of support the recipient is entitled to.
Spousal support, fault and misconduct
Divorce in Canada has been no-fault since the Divorce Act was updated in 1985. The old Family Relations Act took the same approach to spousal support when it was introduced in 1972, and that approach largely continues in today's Family Law Act.
A "no-fault" system means that the behaviour of the spouses during their relationship, and the reasons why their relationship ended, have nothing to do with whether spousal support is payable, how the children wind up being cared for, or how property and debt are divided. Whether someone was abusive or a cheater, for example, is not relevant to the court's consideration of these issues. In fact, section 15.2(5) of the Divorce Act says:
In making an order [for spousal support] the court shall not take into consideration any misconduct of a spouse in relation to the marriage.
The Supreme Court of Canada, in a 2006 Divorce Act case called Leskun v. Leskun, confirmed that the misconduct of the spouses must not be taken into consideration in making a decision about whether spousal support should be paid following the end of their marriage. But even in Leskun, the court distinguished between the bad behaviour itself and the effects of the misconduct on the parties after separation:
"There is, of course, a distinction between the emotional consequences of misconduct and the misconduct itself. The consequences are not rendered irrelevant because of their genesis in the other spouse’s misconduct. If, for example, spousal abuse triggered a depression so serious as to make a claimant spouse unemployable, the consequences of the misconduct would be highly relevant (as here) to the factors which must be considered in determining the right to support, its duration and its amount. The policy of the [Divorce Act] however, is to focus on the consequences of the spousal misconduct not the attribution of fault."
Think of it like this. The fact that a spouse cheated during the relationship doesn't impact their entitlement to spousal support, the amount that the payor has to pay or the amount that the recipient is entitled to get. Say, however, that the misconduct was physical, psychological or emotional abuse, which left the recipient unable to return to work. The fact of the abuse doesn't impact the recipient's entitlement, but the effect of the abuse, in terms of its impact on the recipient's ability to return to work, is what would likely entitle the recipient to spousal support.
The Family Law Act takes a slightly different approach. Some kinds of misconduct will be considered. Section 166 says this:
In making an order respecting spousal support, the court must not consider any misconduct of a spouse, except conduct that arbitrarily or unreasonably
(a) causes, prolongs or aggravates the need for spousal support, or
(b) affects the ability to provide spousal support.
In other words, under the Family Law Act, the court cannot consider misconduct generally, just like under the Divorce Act, but the court can look at the effects of the parties' behaviour on whether the recipient is doing the things that need to be done to become economically self-sufficient or whether the behaviour of the payor has undermined their ability to pay support.
Entitlement, amount and duration
When somebody has the standing to ask for spousal support, the next question is whether they are entitled to receive spousal support. Once entitlement is established, the next questions are how much support should be paid, sometimes called the quantum of support, and the length of time for which spousal support should be paid, or the duration of spousal support.
Spousal support is paid for one of two reasons:
- to help the recipient meet their financial needs when they can't meet them on their own, or
- to compensate the recipient for the impact of the financial decisions the spouses made during their relationship.
The first type is usually called needs-based support. The second is called compensatory support.
Of course, some reduction in the family standard of living is inevitable after separation. No matter if just one spouse was working during the relationship or both worked, the fact is that during the relationship there was only one rent or mortgage payment to make, only one hydro bill, and only one cable bill. After the relationship ends, there are two rent payments, two hydro bills, and two cable bills, all of which must be paid out of the same pool of income that supported the family before separation.
There is no automatic obligation to pay spousal support, or entitlement to receive spousal support, the way there is for child support. As a result, the entitlement of someone to receive spousal support will be decided on the particular circumstances of that person and their relationship with the other spouse. In general, the court will think about entitlement taking into consideration the following factors, among others:
- Length of relationship: The longer the relationship, the more likely it is that an order for spousal support will be made. As well, the longer the relationship is, the stronger will be the presumption that the spouses should have an equal or almost equal standard of living at its conclusion.
- Difference in incomes: The greater the difference in the spouses' incomes at the end of a relationship, the more likely it is that an order for spousal support will be made, even if the support will only be paid for a short period of time. However, the fact that one spouse's income is higher than the other's doesn't mean that the lower-earning spouse is automatically entitled to spousal support.
- Economic disadvantage: The more economic opportunities a spouse has lost as result of the relationship, such as job skills, job opportunities, raises and promotions, or employability, the more likely it is that an order for spousal support will be made.
- Earning capacity: The more one person's earning capacity is reduced because of family obligations, like child care or a serious illness for example, the more likely it is that an order for spousal support will be made.
Under section 160 of the Family Law Act, when a spouse applies for spousal support, the court must determine whether they are entitled to support by considering the objectives set out in section 161. If the court finds that they are entitled to spousal support, the court must then determine how much support should be paid and for how long by considering the factors set out in section 162.
(a) to recognize any economic advantages or disadvantages to the spouses arising from the relationship between the spouses or the breakdown of that relationship;
(b) to apportion between the spouses any financial consequences arising from the care of their child, beyond the duty to provide support for the child;
(c) to relieve any economic hardship of the spouses arising from the breakdown of the relationship between the spouses; and
(d) as far as practicable, promote the economic self-sufficiency of each spouse within a reasonable period of time.
The first three objectives are fairly straightforward and are self-explanatory. The last one deserves some comment.
The effect of section 15.2(6)(d) of the Divorce Act and section 161(d) of the Family Law Act is to create an expectation that a recipient of spousal support will make their best efforts to become financially independent and self-sufficient at some point following separation. A spousal relationship is not intended to be a lifelong meal ticket; at some point, a dependant spouse must usually become independent. This can have an impact on both the amount of spousal support and the length of time support should be paid.
Section 15.2(4) of the Divorce Act and section 162 of the Family Law Act set out the factors for a spousal support order:
(a) the length of time the spouses cohabited;
(b) the functions performed by each spouse during the period they lived together; and
(c) an agreement between the spouses, or an order, relating to support of either spouse.
These factors help the court decide how much spousal support should be paid and for how long, but the court will consider facts about the spouses, their relationship, and their circumstances in addition to these.
Once a person is found to be entitled to spousal support, the amount of spousal support has to be calculated. It's difficult to predict exactly how much spousal support will be paid in any given case. Many different factors can influence the amount of spousal support. The "amount" of support is the amount that should be paid each month, although it is possible to pay a spousal support obligation through one, big lump sum payment. An arrangement that requires spousal support obligations to be paid each month, or on any other regular, recurring basis, is called a periodic payment arrangement.
The amount of spousal support is generally calculated using the Spousal Support Advisory Guidelines. The Advisory Guidelines is an academic paper, published by the federal Department of Justice, which describes a number of mathematical formulas that calculate the amount of spousal support payments based on each person's income, the length of their relationship, the age of their children, and other factors. You can find the Advisory Guidelines in a separate section of this chapter.
You can visit DivorceMate’s website for their free spousal support calculator. This calculator is very good for simple situations, but if there is anything complicated about your circumstances you may want to meet with a lawyer who has bought DivorceMate’s professional software. This will let the lawyer give you some fairly fine-tuned numbers. This chapter’s section on the Spousal Support Advisory Guidelines discusses the Advisory Guidelines formulas in a lot more detail.
In addition to considering the Spousal Support Advisory Guidelines, it is important that each party prepare a sworn court form called a financial statement whether a court proceeding has been started or not. In Provincial Court, the form uses is a Form 4 Financial Statement, and in Supreme Court, the form used is a Form F8 Financial Statement. Financial statements set out each spouse's income and assets, expenses and liabilities in detail.
When a spousal support calculation is done according to the Spousal Support Advisory Guidelines, the calculation sets out three amounts of possible spousal support: a low amount, a middle-range amount, and a high amount. There can be hundreds of dollars difference between the low and high amounts of spousal support. The expenses and debts of the parties, described in their financial statements, can help the court decide whether spousal support should be at the low amount, the middle-range amount, the high amount, or in some other amount.
In most cases, spousal support payments will leave both parties, not just the spouse who earns more money, with enough to look after their living expenses. Although spouses usually share in the financial consequences of the end of their relationship, the court will not force someone into bankruptcy to provide support for the other spouse. There certainly are times, however, when a support order will be difficult for a payor and may result in the payor incurring debt.
Sometimes there's simply not enough money coming in to cover child support, the payor's day-to-day needs, and the day-to-day needs of the recipient. In cases like that, both the Divorce Act and the Family Law Act require child support to take priority over spousal support, and the amount of spousal support paid may not be enough to cover the recipient's needs.
Once a spouse's entitlement to receive spousal support is established and the amount of support payments has been fixed, the next step is to look at the length of time for which the support payments should be made. For people leaving long relationships, spousal support might be paid permanently or until retirement. For people in shorter relationships, particularly where the recipient is either working outside the home or capable of working outside the home, support might only be payable for a fixed length of time.
There are a number of different ways that an agreement or order for spousal support can deal with the issue of time:
- Lump-sum payments: Instead of ongoing monthly payments, it can sometimes be better to pay a single lump sum for all of the support payments. Of course, the payor has to be able to pay a lump sum like that, and not everyone can. This way there is no time issue at all. The recipient's entitlement to support is satisfied when the lump sum payment is made.
- Division of property: It is possible that the way the family property and family debt is divided could satisfy the goals of spousal support. It's also possible that a payor could agree to give the recipient more of the family property in order to avoid a spousal support obligation. This is another way of avoiding time issues. The recipient's entitlement to support is satisfied when the property is divided.
- Review dates: An order or agreement can say that when a certain date arrives or a certain event occurs, the amount of spousal support or the recipient's entitlement to receive support will be reviewed. This is sometimes easier to accept than a fixed date on which support will terminate, but it does mean that the parties will have to argue about the issue in the future. Again.
- Escalated payments: If someone wants to pay spousal support for as short a time as possible but can't make a lump-sum payment, the payor might be able to get an order or agreement requiring larger monthly payments but over a shorter period of time.
The Spousal Support Advisory Guidelines are used to calculate a range of time for which spousal support should be paid, in addition to calculating how much support should be paid. Where a couple have children, time is based on the dates the youngest child will enter and exit school, or, sometimes, on the length of the spouses' relationship. Where a couple doesn't have children, time is based on the length of the couple's relationship.
Orders and agreements for spousal support
Spousal support is a very grey area of the law, with few hard and fast rules. As a result, every order or agreement dealing with spousal support will be tailored to the particular circumstances of the parties, including orders and agreements that say that no spousal support will be paid.
Interim orders and agreements
Interim orders are temporary orders made once a court proceeding has started. Interim orders are not meant to be permanent. They last until another interim order is made or the proceeding wraps up with a trial or a settlement. Likewise, interim agreements are agreements made when settlement discussions have started, and they are meant to last only until a final agreement is negotiated.
The court will think about the same things when it hears an application for an interim spousal support order as it does at the hearing for a final order. At least, that's the general rule. In reality, however, the court usually takes a pretty rough and ready approach to interim applications based on something called the means and needs test. This test asks:
- Does the person making the application, the applicant, have a need for support?
- Does the other person, the respondent, have the means to pay it?
The court will not usually attempt to decide whether the applicant's need is related to the relationship or its breakdown when making an interim order for spousal support. In a 2005 case called L.G.B. v. M.A.C.M., the court said that interim spousal support should generally only be awarded where an obvious case for entitlement is made out. Spousal support will often be awarded on an interim basis when:
- there are young children who need a stay-at-home caregiver,
- the applicant is unemployed at the time of the application and hasn't worked outside the home for a number of years,
- the applicant is unemployed and faces barriers to employment, such as a lack of training, illness or poor language skills, or
- the applicant is employed but unable to pay the household bills without help.
Of course, need alone isn't enough, and the person against whom the application is brought must have the ability to actually pay support. Whether the payor has the means to pay support is usually figured out by looking at the payor's monthly income, less any child support obligations, and less their reasonable monthly expenses. If there is money left over, the payor's disposable income, some or all of that money will be available for spousal support.
Depending on the respondent's ability to pay, the amount of spousal support awarded may be enough to equalize the spouses' incomes and, sometimes, even enough to help the applicant have more or less the same standard of living that the spouses had before they separated.
Final orders and agreements: Periodic payments
Under the Divorce Act and the Family Law Act, the court may make an order for spousal support for regular payments, called periodic payments, to be paid for a fixed period of time (a definite term), or to be paid without a particular end date (an indefinite term). Whether an order requires that spousal support be paid for a definite or indefinite term will depend on the particular circumstances of each case. In general, however, the longer the relationship was and the older the parties are, the more likely it is that the court will make an indefinite order for spousal support.
It's important to know, however, that "indefinite" doesn't mean permanent. It just means that and end date can't be set when the order is made.
Indefinite orders for spousal support are often made in one or more of the following circumstances:
- the spouses' relationship was lengthy,
- the recipient is unable to re-enter the workforce because of physical or mental health issues,
- the recipient is elderly and unable or unlikely to re-enter the workforce,
- the recipient's child care or other obligations make it impossible for them to re-enter the workforce, or
- the consequences of the breakdown of the relationship, including mental health issues such as depression, have left the recipient unable to work.
An indefinite order or agreement for spousal support can also set out the conditions when the spousal support obligation may end. The most typical of these conditions are:
- the recipient remarrying or living with another person in a marriage-like relationship for longer than a certain amount of time,
- the recipient obtaining employment and earning more than a specified amount,
- the payor retiring, or
- the death of either the recipient or the payor.
Reviewable orders and agreements
Under section 168 of the Family Law Act, an order or agreement that requires the payment of spousal support can be reviewable. A reviewable order or agreement for spousal support is an order or agreement that says that spousal support will be paid indefinitely, but that the payor's obligation to pay support or the recipient's entitlement to receive it will be reviewed at a later date, called a review date. A review date may be a particular day, usually not sooner than a few years after the date of the agreement or order, or it may be triggered by a particular event such as:
- the children leaving home,
- the recipient recovering from an illness,
- the recipient becoming employed or finishing a course of training or education,
- the recipient or the payor reaching a certain age or retiring,
- the recipient or the payor beginning to receive pension benefits,
- the sale of a property, or
- the recipient entering into a new married or cohabiting relationship.
When the review date arrives, the obligation to pay spousal support does not automatically expire unless the order or agreement expressly says so. The obligation usually continues until the review finally takes place, whether the review is started by the recipient or the payor.
At the review, either spouse may usually seek to cancel or extend the support obligation, or to reduce or increase the amount of spousal support paid. The review will usually be based on parties' financial circumstances at the time of the review, but can take into account other factors, like the recipient's health, the recipient's efforts to find employment, or the payor's financial circumstances. A reviewable order or agreement can specify how the review will be conducted, which might be by mediation, a collaborative settlement process, or arbitration. Reviews don't have to happen in court.
Orders or agreements which say that spousal support will be paid for a specific period of time are usually made when it is clear that the recipient has the ability to become self-sufficient within a fairly short amount of time or the payor's resources are limited. Definite-term orders and agreements for spousal support are often made where one or more of the following conditions apply to a relationship:
- the recipient is in a new relationship and the new person's income is expected to contribute to the recipient's needs,
- the recipient has relevant job training or skills at the time that the relationship breaks down and is expected to return to work in short order,
- the recipient had a successful career before or during the relationship and is expected to return to work in short order,
- the recipient needs a bit of time to adjust to their new living circumstances and will become self-sufficient relatively quickly, or
- the recipient is ill or disabled at the time of the making of the order or agreement but is expected to recover and re-enter the workforce.
The length of time for which support must be paid is usually be determined using the Spousal Support Advisory Guidelines and may reflect one or more of the following factors:
- the length of the parties' relationship,
- the extent and nature of the parties' employment during their relationship,
- the time the court estimates it will take the recipient to complete job training, if unemployed,
- the amount of the recipient's income, if employed,
- the payor's retirement date,
- the recipient's anticipated length of recovery from an illness, or
- the age at which the children will enter school or the age at which they can enter daycare.
Final orders and agreements: Lump-sum payments
A lump sum order or agreement for spousal support requires the payor to make a large, one-time-only payment of spousal support. This kind of spousal support payment is fairly rare, partly because the payment of a lump sum of spousal support is often difficult to distinguish from the division of property, partly because a lump-sum payment may not adequately address the need the payment of spousal support is meant to address, and partly because few payors can afford to make a lump-sum payment.
Whether the court is dealing with an application for lump-sum spousal support rather than the more usual periodic-payment support obligation, the court will usually be concerned that the payment of spousal support isn't just a substitute for the division of family property. The court will also be concerned that a lump-sum payment may not actually help the recipient become financially independent.
Payors are sometimes interested in lump-sum spousal support payments for the reason that the single payment will allow them to wash their hands of the other spouse and have done with the support obligation immediately, rather than having to deal with the other spouse on a continuing basis. Recipients are usually interested in lump-sum spousal support payments where the cash is needed to make a down payment on a property, start a business, or for some other purpose that will contribute to their future security.
The court may be prepared to make an order for a lump sum, either alone or in addition to a periodic support order, where:
- the payor has a history of failing to make periodic support payments,
- the payor has been dishonest or deceitful during the trial, particularly with respect to their finances,
- there is so much anger and animosity between the parties that the payor is unlikely to comply with an order for periodic payments,
- the money is necessary to provide a home for the recipient,
- the money is necessary to give the recipient financial security that cannot be had by periodic payments,
- the payor is financially well-off and can afford to make the payment,
- the payor is able to pay a lump sum and the likelihood of the payor being able to make future periodic payments of support is low,
- the money will promote the recipient's self-sufficiency, or
- periodic payments will not encourage the recipient to become self-sufficient.
Lump-sum awards are available on interim applications, but such awards are unusual.
Under the Spousal Support Advisory Guidelines, the amount of lump-sum payments is determined by multiplying the amount of support by the number of months support must be paid for, and then taking into account the tax impact on the payor from paying spousal support (payors get to deduct the support they pay from their income, just like RRSP contributions) and the tax impact on the recipient from receiving spousal support (recipients must declare the support they get as taxable income, as if the money came from employment)
Ensuring spousal support is paid
Under section 170 of the Family Law Act, the court may make a number of additional orders when it is making an order for spousal support that can help to ensure that spousal support continues to be paid, including after the death of the payor. The court may:
- order that a charge be registered against property,
- require a payor with life insurance to maintain that policy and specify that a spouse will be the beneficiary of the policy, or
- order that spousal support continue to be paid after the payor's death and be paid from their estate.
Before the court makes an order that requires spousal support to be paid from the payor's estate, under section 171(1), the court must consider:
- whether the recipient's need for support will survive the payor's death,
- whether the payor's estate is sufficient to meet the recipient's needs, taking into account the interests of the people who stand to inherit from the payor's estate and the creditors entitled to be paid from the payor's estate and,
- whether any other means exist to meet the recipient's needs.
Spousal support when the payor dies
When a payor dies, the recipient can apply to court for an order under section 171(3)(b) of the Family Law Act that the payor's support obligation will continue and be paid from their estate.
When a recipient applies to continue a support obligation or if a support order says that the obligation will continue past the payor's death, the payor's personal representative, the person managing the payor's estate and will, has the right to defend against the recipient's application or to vary or terminate a continuing obligation.
Spousal support and income tax
A spouse who pays support on a periodic basis is entitled to claim the whole amount of their payments as a deduction against their taxable income, just like an RRSP contribution. The recipient is obliged to claim the support they have received as taxable income, just like employment income, and the recipient will wind up owing money to the government each year when their taxes are due.
To claim spousal support payments as a tax deduction, the agreement or order that requires the payor to make the spousal support payments must clearly state that the payments are for spousal support and the payments must be periodic in nature, rather than paid as a lump sum or through the division of property. Without these clear statements, the federal Income Tax Act requires the payments to be treated as child support payments, and child support payments are neither tax deductible for the payor nor taxable income for the recipient.
It's important to know that lump-sum spousal support payments are neither deductible for the payor nor taxable for the recipient.
Ensuring spousal support is deductible
If you want to ensure that the money you are paying as spousal support is deductible, there are a couple of important points you must pay attention to in order to satisfy the tax people:
- Court orders: The order must clearly state a fixed, periodic sum that is being paid, and this fixed sum must be described as spousal support.
- Separation agreements: In addition to a term describing a fixed, periodic sum as spousal support, the agreement must also state that the parties have been separated since a certain date and intend to continue to live separate from each other. Payments for child support and spousal support should never be expressed as a single amount.
- Unwritten agreements: In general, the tax department will not recognize anything other than a written separation agreement or a court order. There are some exceptions to this rule, but you really should arrange your support payments more formally.
- Proof of payment: CRA may want proof you made the payments you are seeking to deduct. If you can’t get receipts, make sure you can document the payments you made. E-transfers or bank records in the correct amount may not be enough. It has to be recorded as spousal support somehow, such as on cheques with “spousal support” noted in the memo line. Cash payments are the worst. If you must pay in cash, get a receipt!
Payors and payroll source deductions
People paying periodic spousal support usually wait until they file their income taxes to claim their deduction and get a tax refund. However, you don't have to wait if you don't want to.
A source deduction, or payroll deduction, is an amount of money your employer is required to deduct from your paycheque and remit to the Canada Revenue Agency. Your employer calculates your source deduction based on the salary or wages they are paying you and the tax rate for your income. If you want, you can ask your employer to take into account any periodic spousal support you're paying. This will reduce the income taxes your employer deducts from your paycheque. Your employer may have to get approval from the Canada Revenue Agency to adjust to your source deductions for income tax.
Unexpected taxes for recipients
People receiving periodic spousal support have to pay income tax on their support, as if their support payments were employment income.
Recipients may also be subject to other tax consequences that aren't so obvious. One of the more common ways this can happen is if the payor is making the payments indirectly, through a company they own. For example, say that Bob, the owner of Bob's Brewery, writes his spousal support cheques on the company bank account of Bob's Brewery instead of from his personal chequing account. In a case like this, the recipient risks having the payor declare the money to have been paid as a corporate dividend or as salary, as if the recipient were a shareholder or employee of the company.
In the case of spousal support payments that are declared as salary, the recipient might also face an unexpected bill for missed payments to Employment Insurance premiums or Canada Pension Plan contributions, as well as for unpaid tax on the payments from the Canada Revenue Agency. In the case of support paid as a dividend, the payments might be taxed at the corporate tax rate, which may be higher than the recipient's personal tax rate.
The easiest way to guard against unexpected taxes is to ensure that the payments are made from the payor's personal bank account.
Taking taxes into account
When it will be difficult for a recipient to pay the tax owing on spousal support, a couple can agree to deal with these taxes in one of two ways if the recipient is to avoid a big bill in April:
- the payor could pay more in spousal support to account for the tax consequences, or
- the payor could simply pay the tax owing by the recipient when the recipient files their tax return.
When someone pays more support, the recipient must put the extra amount aside for tax time, or their bill to the Canada Revenue Agency will just be that much higher. Since it can be a bit difficult to figure out how much money the recipient will have to pay in taxes, you might want to talk to an accountant to get the number right.
When someone agrees to pay the taxes owing on account of the spousal support and the recipient has other sources of income, it can be very difficult to figure out exactly how much of the recipient's tax bill results from their receipt of spousal support. This is another good time to hire an accountant.
Deductibility of legal fees
The portion of a lawyer's bill attributable to getting, increasing or enforcing a spousal support order for periodic payments is tax deductible by the recipient. A payor cannot deduct legal fees paid to establish, negotiate, contest, reduce or terminate the amount of spousal support. Read the Canada Revenue Agency's Income Tax Folio: S1-F3-C3, Support Payments for the fine print.
To claim these deductions, the lawyer must write a letter to the CRA setting out what portion of their fees were attributable to advancing a spousal support claim. If you intend to ask your lawyer for a letter like this, you must tell your lawyer as soon as possible, preferably the moment the lawyer takes your case. It may be impossible for your lawyer to winnow out the portions of their account spent on spousal support after the fact.
Spousal support and death
As a general rule, if the payor dies, support ends. Under the Family Law Act, however, a recipient spouse may apply to have support continue, to be paid by the estate of the deceased spouse. Section 171 lists the factors the court must consider:
- the need of the recipient,
- the size of the estate,
- the claims of the estate's creditors and beneficiaries, and
- whether any other practical means exist to meet the need of the recipient, such as life insurance, although life insurance isn't always available or affordable.)
There is no limitation period to ask for spousal support payments to continue past the death of the payor, but as a practical matter, recipients should apply as possible. Otherwise, they risk the estate being wound up and paid out.
It's important to know that if an order for spousal support already provides for support to continue past the death of the payor, the payor's estate can apply to have the support payments reduced or ended.
If the recipient dies, the obligation to pay spousal support ends. However, questions can come up about arrears of support owing by the payor at the time of their death. The answer to those questions isn't always clear. The case law seems to depend in part on whether the recipient had been actively pursuing payment of the money owed to them and whether the recipient had been spending their own savings to make up for the shortfall.
The Divorce Act does not talk about what happens if someone paying spousal support dies the way the Family Law Act does. If your spousal support order was made under the Divorce Act, an application to make the payor's estate liable for continuing spousal support will not possible. You must have an agreement or court order about the effect of the payor's death that was made before their death. If you asking for spousal support and you think you may need some security in the event the payor dies, apply for such an order or negotiate such an agreement now. If you wait, you may lose the chance.
- Spousal Support Advisory Guidelines
- Canada Revenue Agency's Income Tax Folio: S1-F3-C3, Support Payments
- Department of Justice's website "About spousal support"
- Ministry of Attorney General's website "Family Maintenance Services"
- Legal Aid BC's Family Law website's information page "Child & spousal support"
- See "Spousal support"
- Family Maintenance Enforcement Program website
- Dial-A-Law Script "Spousal support"
- Clicklaw listing of resources on spousal support
- DivorceMate's free basic spousal support calculator
|This information applies to British Columbia, Canada. Last reviewed for legal accuracy by JP Boyd, 1 July 2022.|
|JP Boyd on Family Law © John-Paul Boyd and Courthouse Libraries BC is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 2.5 Canada Licence.|