Spousal support, also called alimony or maintenance, is a paid by one spouse or partner to the other to help defray that person's day-to-day living expenses after the relationship ends. Spousal support isn't always payable when a relationship breaks down; there must be a pattern of dependance of one party upon the other during the relationship or a need to compensate a dependent party for a loss suffered as a result of the relationship, and the dependant party must be unable to support him- or herself without the other party's assistance.
The basic issue is this: living together is cost effective; living separately isn't. During a relationship, there are one or more sources of income paying only one set of household bills. Once a relationship comes to an end, the same amount of income must pay two rent cheques, two hydro bills, two phone bills and so forth. Where one of the parties can't afford to meet these basic living expenses, spousal support will be paid, providing the other party can afford to pay it.
Basic Criteria for the Payment of Support
Broadly speaking, a party seeking support must have suffered an economic disadvantage arising from the relationship or the breakdown of the relationship. Simply having had a relationship isn't enough to establish a claim for spousal support; there must be an obvious economic disadvantage.
In a single-earner household, the consequences to the party who isn't employed outside the home are obvious: he or she has no income with which to meet basic living expenses. In a dual-earner household, there may still be a case for support where one party earns substantially less than the other. Either way, the question comes down to the dependent party's need for financial assistance and the other party's ability to provide it.
An obligation to provide spousal support is counterbalanced by a heavy obligation lying on the person receiving support to become financially independent. Unless there is a very good reason why a recipient of support cannot become independent, such as severe illness or advanced age, the recipient must expect that spousal support will not be paid indefinitely and must take concrete steps to find employment.
Types of Support Payments
The goal of spousal support is, in most cases, to help the recipient get by until he or she can achieve financial independence. In the cases of couples of an advanced age or couples where the dependent spouse suffers from a disability, independence may never be achieved. In other cases, where there are no such barriers to independence, the dependent party will be expected to become self-sufficient in short order.
Spousal support is generally paid periodically, usually once per month. Where a party is unlikely to become independent, spousal support may be payable indefinitely. Where a party is able to become self-sufficient, support is usually limited in time, and often structured to encourage the dependent party to acheive self-sufficiency by imposing a reduction in the amount of support paid graduated over time.
Spousal support can also be paid in a single lump sum, with or without periodic support payments. Lump sum payments are generally appropriate where the payor has a track record of inconsistency in his or her support payments, or where the recipient has a need for a lump sum to become independent, perhaps as a downpayment on a house or for the purchase of a business opportunity. Lump sum payments are generally only appropriate where the payor has the ability to make a large payment.
Calculating the Amount of Support Payments
The three most important factors to be considered when determining the amount of support which ought to be paid are:
- the payor's ability to pay;
- the recipient's needs; and,
- the standard of living that the couple enjoyed during their relationship.
While there are no hard and fast rules governing the determination of amount, the basic concept involves looking at the basic monthly expenses of both parties against the payor's income. First, get an idea of how much disposable income is available to the parties: look at the payor's income and subtract from that his or her reasonable monthly expenses, for things like rent, food, utilities and so forth. That will give you an idea of how much the payor has left to contribute to the dependent party. Second, look at the recipient's reasonable monthly living expenses, subtracting any available income from things like EI, WCB or employment outside the home. That will give you an idea of how much more the recipient needs to get by. The amount should be the amount of the recipient's monthly needs that can be paid with the payor's available extra income. Note that the court will not bankrupt a payor in making a spousal support Order; the payor may simply not have enough disposable income to meet all of the recipient's needs.
Spousal support can also be calculated using the draft proposed Spousal Support Advisory Guidelines. The Advisory Guidelines describes mathematical formulae that can be used to calculate both the amount of support that should be paid and the length of time support should be paid for, once an entitlement to receive support has been found. While the Advisory Guidelines is not law and is not going to become law, the courts and lawyers frequently use the results produced by the formulae when determining spousal support. More information about the Advisory Guidelines can be found in the chapter "Spousal Support > The Advisory Guidelines."
Finally, it is important to know that spousal support is a deduction against the income of the payor and taxable income in the hands of the recipient. In other words, the person paying support gets a tax deduction for the payment of support, while the person receiving support must pay tax on the spousal support he or she receives. Nothing, of course, prevents the adjustment of the amount of support payable to reflect the tax that the recipient must pay on that support.
Spousal Support and the Division of Assets
For married spouses, the court will often consider the question of the division of the family assets before considering whether spousal support ought to be paid and, if so, how much support ought to be paid. Since the goal of spousal support is to enable a spouse to achieve financial independence, it may very well be the case that the division of assets required by the court will meet those needs.
The effect that the division of assets has on a spouse's ability to be self-sufficient should be taken into account regardless of whether the courts are called upon to resolve a dispute or the parties are able to negotiate a resolution amongst themselves.
Back to the top of this chapter.