Difference between revisions of "Spousal and Child Support (3:X)"

Jump to navigation Jump to search

Spousal and Child Support (3:X) (view source)

Revision as of 17:31, 30 April 2016

6,538 bytes added ,  17:31, 30 April 2016
no edit summary
Line 70: Line 70:
Section 15.2 of the ''DA'' creates an obligation to support a spouse. However, s 15.3(1) directs the Court to give priority to child support in any application for child and spousal support under the ''DA''. The entire gross income (guideline income) is used to calculate child support and then any Net Disposable Income that remains (as calculated based on the incomes of both parties and taking into account taxes and other charges) is apportioned between the parties based on the length of marriage. It may be that the result of the payment of child support reduces the Net Disposable Income to very little and in those cases child support takes priority over the sharing of the NDI and there would be little to no spousal support payable. There is no limitation date under the ''DA''.
Section 15.2 of the ''DA'' creates an obligation to support a spouse. However, s 15.3(1) directs the Court to give priority to child support in any application for child and spousal support under the ''DA''. The entire gross income (guideline income) is used to calculate child support and then any Net Disposable Income that remains (as calculated based on the incomes of both parties and taking into account taxes and other charges) is apportioned between the parties based on the length of marriage. It may be that the result of the payment of child support reduces the Net Disposable Income to very little and in those cases child support takes priority over the sharing of the NDI and there would be little to no spousal support payable. There is no limitation date under the ''DA''.


next p 3-35
==== b) Family Law Act [FLA] ====
 
The ''FLA'' aligns support considerations more closely with the ''DA'', permits periodic reviews to allow for changing circumstances, and provides guidelines for when a deceased spouse’s estate is obliged to continue payments. Considerations for posthumous support payments include  the size of the estate and the need of the payee (s 171). Additionally, child support is to be prioritized over spousal support where a paying spouse has limited resources. (s 173). The ''Spousal Support Advisory Guidelines'' are not referred to in the Act and remain advisory, although Courts in British Columbia give them much deference. 
 
==== c) Spousal Support Advisory Guidelines ====
 
The final version of the ''Spousal Support Advisory Guidelines'' (SSAG) was published in July 2008. The SSAG do not have the force of law and are not expected to become law.
 
The SSAG set out two basic mathematical formulae for determining the quantum and duration of spousal support when a person’s entitlement to receive support is established: the “with children” formula when the parties have dependent children, and the “without children” formula when child support is not being paid. The “without children” formula is relatively simple, however the “with children” formula cannot be completed without the assistance of a computer program (refer to http://www.justice.gc.ca/eng/pi/pad-rpad/res/spag/ex.html).
 
While the SSAG have no regulatory effect and are merely “informal”, and “advisory”, they are nevertheless being used by the courts and the bar and the ranges provided by the SSAG are given strong consideration by the Court (see ''Yemchuk v. Yemchuk'', 2005 BCCA 406 and ''Redpath v. Redpath'', 2006 BCCA 338).
 
=== 2. Principles of Spousal Support ===
 
==== a) General ====
 
There are three bases for entitlement to spousal support: (1) Compensatory (to compensate one spouse who was economically disadvantaged as a result of the role that spouse took on during the relationship); (2) Non-compensatory (need based); and (3) Contractual (i.e. if there was a  marriage or cohabitation agreement setting out terms for support). Once a party has met the requirement of demonstrating entitlement, you move to the calculation of quantum. When determining quantum of support one factor to be considered is whether the needs of the recipient spouse  have been met by the division of assets however if support is compensation based then even if the recipient receives significant assets that is not a basis to reduce support (See ''Chutter v Chutter'' [2009] CarswellBC 1028 (BCCA)). Typically the way this is addressed is to determine what income a party can reasonable earn from the assets received on division and to take that into account in calculating the quantum of support.
 
==== b) Factors considered ====
 
While the underlying principles may be the same, the ''DA'' (and new ''FLA'' that mirrors it) and the ''FRA'' differ slightly in the factors they direct the courts to consider. Section 15.2 of the ''Divorce Act'' directs courts to consider the condition, means, need and other circumstances of each spouse, including:
#the length of time the spouses cohabited;
#the functions performed by each spouse during cohabitation; and
#any order, agreement or arrangement relating to support of either spouse.
 
The provisions in the new ''FLA'' mirror those in the ''DA''.
 
Sections 161 and 162 of the ''FLA'' refer to the objectives to and the determination of spousal support.
 
In determining entitlement to spousal support, s 161 of the ''FLA'' states that the parties to an agreement or the Court must consider the following objectives:
#To recognize any economic advantages or disadvantages to the spouses arising from the relationship between the spouses or the breakdown of that relationship.
#To apportion between the spouses any financial consequences arising from the care of their child, beyond the duty to provide support for the child.
#To relieve any economic hardship of the spouses arising from the care of the child, beyond the duty to provide support for the child.
#As far as practicable, to promote the economic self-sufficiency of each spouse within a reasonable period of time.
 
In determining spousal support, s 162 of the ''FLA'' states that the amount and duration of spousal support must be determined on consideration of the conditions, means, needs and other circumstances of each spouse including:
#The length of time the spouses lived together.
#The functions performed by each spouse during the period they lived together.
#An agreement between the spouses relating to the support of either spouse.
 
=== 3. Issues Related to Spousal Support ===
 
==== a) Employment and Income Assistance and Spousal Support ====
 
People can opt into this program so that the FMP can continue to assist in collecting the support, but people can keep their support rather  than having it deducted from other government support they are receiving, if any. 
 
==== b) Taxes and Spousal Support ====
 
Spousal support is treated by the recipient as taxable income. The spouse who pays support is entitled to deduct the amount from income tax. The spouse who receives support is required to declare it as income, in contrast to child support which has no income tax consequences. Lump payments of support are not taxable. There are free online child support and spousal support calculators on the Internet (e.g. child support: http://www.justice.gc.ca/eng/fl-df/child-enfant/look-rech.asp; spousal support: http://www.mysupportcalculator.ca/Calculator.aspx, http://www.justice.gc.ca/eng/fl-df/spousal-epoux/ssag-ldfpae.html). It is essential that support payments be identified as such in court orders and separation agreements if the payor is to be able to claim a deduction. As a rule, oral or informal agreements are not sufficient to establish the status of payments as spousal support. Parties are permitted to enter into retroactive agreements which set out the amount paid and received in prior years for the purposes of claiming income tax relief. However any such agreement must be entered into before the end of the calendar year immediately following the year in question (i.e. if payments were made in 2012, a retroactive agreement would need to be entered into before December 31, 2013)
 
Other tax issues can arise if payments are made through a corporate account or if the payor has a lower tax burden than usual (i.e. aboriginal spouses or U.S. residents).
Retrieved from "https://wiki.clicklaw.bc.ca/index.php?title=Special:MobileDiff/28848"

Navigation menu