Spousal Support: Difference between revisions
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{{LSSbadge | {{LSSbadge | ||
| resourcetype = a fact sheet on | | resourcetype = a fact sheet on | ||
| link = [ | | link = [https://family.legalaid.bc.ca/finances-support/child-spousal-support/spousal-support Spousal Support] | ||
}}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. | }}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. | ||
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==Introduction== | ==Introduction== | ||
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 [ | 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 [https://canlii.ca/t/1f4h7 Dumais-Koski v. Koski]: | ||
<blockquote>"Marriage is not a legal institution created for the redistribution of wealth."</blockquote> | <blockquote>"Marriage is not a legal institution created for the redistribution of wealth."</blockquote> | ||
Or, as the Alberta Court of Queen's Bench put it, in the 2005 case of [ | Or, as the Alberta Court of Queen's Bench put it, in the 2005 case of [https://canlii.ca/t/1pvt2 V.S. v. A.K.]: | ||
<blockquote>"A person does not acquire a lifetime pension as a result of marriage. Likewise, marriage is not an insurance policy."</blockquote> | <blockquote>"A person does not acquire a lifetime pension as a result of marriage. Likewise, marriage is not an insurance policy."</blockquote> | ||
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*has lived with another person in a marriage-like relationship for less than two years and has had a child with that person. | *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 [ | 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 [https://canlii.ca/t/1txxkand Austin v. Goerz] and the 2015 case of [https://canlii.ca/t/gm9nx Weber v. Leclerc]. | ||
====Limitation periods==== | ====Limitation periods==== | ||
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<blockquote><tt>In making an order [for spousal support] the court shall not take into consideration any misconduct of a spouse in relation to the marriage.</tt></blockquote> | <blockquote><tt>In making an order [for spousal support] the court shall not take into consideration any misconduct of a spouse in relation to the marriage.</tt></blockquote> | ||
The Supreme Court of Canada, in a 2006 ''Divorce Act'' case called [ | The Supreme Court of Canada, in a 2006 ''Divorce Act'' case called [https://canlii.ca/t/1nmrd 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: | ||
<blockquote><tt>"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."</tt></blockquote> | <blockquote><tt>"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."</tt></blockquote> | ||
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*Does the other person, the ''respondent'', have the means to pay it? | *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 [ | 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 [https://canlii.ca/t/1mtw3 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, | *there are young children who need a stay-at-home caregiver, | ||
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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. | 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 ''[ | 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 ''[https://laws-lois.justice.gc.ca/eng/acts/I-3.3/index.html 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. | It's important to know that lump-sum spousal support payments are neither deductible for the payor nor taxable for the recipient. | ||
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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 <span class="noglossary">account</span> of Bob's Brewery instead of from his personal chequing <span class="noglossary">account</span>. 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. | 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 <span class="noglossary">account</span> of Bob's Brewery instead of from his personal chequing <span class="noglossary">account</span>. 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 [ | 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 [https://www.canada.ca/en/revenue-agency.html 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 <span class="noglossary">account</span>. | The easiest way to guard against unexpected taxes is to ensure that the payments are made from the payor's personal bank <span class="noglossary">account</span>. | ||
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===Deductibility of legal fees=== | ===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 [ | 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 [https://bit.ly/479Sxpq 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. | 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. | ||
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* ''[[Family Law Act]]'' | * ''[[Family Law Act]]'' | ||
* ''[[Divorce Act]]'' | * ''[[Divorce Act]]'' | ||
* ''[ | * ''[https://laws-lois.justice.gc.ca/eng/acts/I-3.3/index.html Income Tax Act]'' | ||
===Documents=== | ===Documents=== | ||
* [https://www.justice.gc.ca/eng/fl-df/spousal-epoux/ssag-ldfpae.html Spousal Support Advisory Guidelines] | * [https://www.justice.gc.ca/eng/fl-df/spousal-epoux/ssag-ldfpae.html Spousal Support Advisory Guidelines] | ||
* [https:// | * [https://bit.ly/479Sxpq Income Tax Folio: S1-F3-C3, Support Payments] from the Canada Revenue Agency | ||
===Links=== | ===Links=== | ||
* [https://www.justice.gc.ca/eng/fl-df/spousal-epoux/ss-pae.html | * [https://www.justice.gc.ca/eng/fl-df/spousal-epoux/ss-pae.html About spousal support] from Department of Justice | ||
* [https://bit.ly/46Nr0YS Ministry of Attorney General | * [https://bit.ly/46Nr0YS Family Maintenance Services] from Ministry of Attorney General | ||
* [https:// | * [https://family.legalaid.bc.ca/finances-support/child-spousal-support/spousal-support Spousal support] from Legal Aid BC's Family Law website | ||
* [https://www.bcfma.ca/ BC Family Maintenance Agency website] | * [https://www.bcfma.ca/ BC Family Maintenance Agency website] | ||
* [https:// | * [https://dialalaw.peopleslawschool.ca/spousal-support/ Spousal support] from Dial-A-Law by the People's Law School | ||
* [https | * [https://mysupportcalculator.ca DivorceMate's free basic spousal support calculator] | ||
