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

The first thing that a spouse must determine regarding spousal support is whether or not they are entitled to receive it. After that, the amount and duration of spousal support can be determined. The fundamental question in determining spousal support is whether the objectives of spousal support under the Spousal Support Advisory Guidelines [SSAG] are met.  The division of assets in the divorce will impact whether or not the spouse is entitled to spousal support and will be taken into account when the court decides how much spousal support to order.  It should be noted that if a party is entitled to compensatory support arising from the relationship, the receipt of significant assets in the division of assets may not result in a loss of entitlement to support (See ''Chutter v. Chutter'', 2009 BCCA 177).  

The ''FLA'' aligns support considerations 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.

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 after the entitlement analysis is complete (see ''Yemchuk v. Yemchuk'', 2005 BCCA 406 and ''Redpath v. Redpath'', 2006 BCCA 338).

# Compensatory (to compensate one spouse who was economically disadvantaged as a result of the role that spouse took on during the relationship) (''Moge v Moge'', [1992] 3 S.C.R. 813);  

# Non-compensatory (need based) (''Bracklow v Bracklow'', [1999] 1 S.C.R. 420); and  

# Contractual (i.e. if there was a marriage or cohabitation agreement setting out terms for support) (''Miglin v Miglin'', 2003 SCC 24).

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 reasonably earn from the assets received on division and to take that into account in calculating the quantum of 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)