Spousal support, or alimony, is money paid from one spouse to the other spouse to provide financial support following the breakdown of the relationship. The purpose of spousal support is to recognize the fact that people become financially intertwined in spousal relationships and if the relationship breaks down, the lower earning spouse may need support until they can become financially independent.
Both married spouses and common law spouses can apply for spousal support in Ontario. However, common law spouses must have cohabited with their spouse for three (or more) years or have a child together and live in a relationship of some permanence in order to make a claim for spousal support.
Who qualifies for spousal support?
There is no automatic right to spousal support. To obtain an order for spousal support, a spouse must first show they are entitled to receive spousal support. Only after entitlement is established, will the Court determine the amount. To determine whether a spouse is entitled to spousal support, the Court will look at:
- the parties’ annual incomes and estimated yearly expenses;
- the length of the marriage or common-law relationship;
- the roles that each spouse had during the marriage or common-law relationship;
- the effect of the end of the relationship on each spouse’s financial position;
- whether the children of the relationship need care that affects one spouse’s ability to work;
- the goal of encouraging the spouse who receives support to work towards being self-sufficient (if appropriate or to the extent practicable); and
- any orders or agreements already made about spousal support
If a spouse can prove that they need financial assistance from their partner or that their contributions during the relationship helped their partner to earn their current income, then they will likely be entitled to spousal support.
How is spousal support calculated?
Calculating spousal support is not as straight forward as calculating child support. To calculate the amount of spousal support payable, the Court often relies upon the Spousal Support Advisory Guidelines (“SSAGs”). However, unlike the Federal Child Support Guidelines, the Court is not required to follow the SSAGs and the SSAGs provide a suggested range of spousal support rather than a set amount. Calculating spousal support is much more flexible than calculating child support.
Like child support, the first question that must be answered is: what are the parties’ incomes? Most often, this question is answered by looking at each spouse’s gross income (before taxes) reported at Line 150 on their most recent Income Tax Return. However, sometimes a spouse’s income reported at Line 150 is not an accurate representation of their actual income. The income reported on Line 150 is only the starting point. The income reported on the spouse’s Income Tax Return may need to be scrutinized based on the person’s type of employment (i.e. if they are self-employed) or their past work history.
Using each spouse’s established income, the SSAGs provide a recommended range of spousal support. Several factors will affect the spousal support range calculated by the SSAGs and what amount should be paid within the range, including:
- Child Support: if the paying spouse owes child support to the spouse seeking spousal support, this will reduce the amount of spousal support owed.
- The length of the relationship: the amount owed under SSAGs increases as the length of the relationship increases.
- Means and Needs: the paying spouse’s ability to pay support and the recipient spouse’s need for spousal support will be assessed based on their respective incomes and their yearly expenses. For example, a spouse with limited income or increased living expenses, may be successful in getting support in the middle to high end of the range. Alternatively, a paying spouse with a lower income who has trouble maintaining a modest standard of living while paying support, may be successful in getting support in the middle to low end of the range.
- Children: the age, number, and needs of any children may affect the amount of spousal support payable. For example, a child with higher needs will usually demand more time and resources from the care-giving parent, reducing that parent’s ability to work.
- Property Division: the property each party keeps as part of the separation can affect spousal support. A spouse who keeps a large amount of property or assets that will earn income in the future, may be entitled to lower spousal support payments. Alternatively, if there is no property to be divided, higher spousal support payments may be appropriate.
- Debt Payments: if a couple’s debt outweighs their assets and the paying spouse ends up taking on more of the family debt, there might be a reduction in spousal support while those payments are being made.
- Prior Support Obligations: a paying spouse’s prior support obligations are considered when determining his or her income. In turn, this will affect the SSAG range.
The Court will also consider the same factors that are assessed when determining entitlement such as length of the relationship, the spouse’s roles during the relationship, and the goal of encouraging the recipient spouse to become self-sufficient when determining the amount of spousal support to be paid.
How long should spousal support be paid?
There are three types of spousal support orders:
- Spousal Support for a Fixed Duration,
- Spousal Support for an Indefinite Duration, and
- Lump Sum Spousal Support.
Fixed duration spousal support means that a monthly spousal support amount will be paid once a month until a set end date, which is the last day that support will be paid.
Indefinite duration spousal support means the paying spouse will pay the recipient spouse a monthly amount of spousal support indefinitely. Even though spousal support is to be paid indefinitely, there will sometimes be a review clause as part of this type of spousal support award which gives scenarios when the amount or duration of support will be reviewed and possibly adjusted.
Lump sum spousal support is calculated by determining the entire amount a spouse would receive in either fixed duration spousal support or indefinite duration spousal support. The paying spouse then pays the amount up front as a lump sum rather than by monthly payments.
Whether a spousal support order will be for a fixed duration or indefinitely paid depends primarily on three factors: the length of the relationship, the age of the spouses, and the ages of the children. Longer relationships, older spouses, and younger children all weigh in favour of longer support duration.
Spousal support awards are also flexible. The amount of the payment can be intertwined with duration. For example, a higher payment for a shorter duration is equal to a lower payment for a longer duration. Spousal support payments can also be structured in a step-down manner, meaning that less support is paid over time.
Income Taxes and Spousal Support
Spousal support payments can be tax deductible. It is to your benefit to create a clear written agreement regarding support in the initial separation period and throughout family law negotiations in order to deduct spousal support payments. The obligation to pay spousal support starts immediately after separation. It can be met in many ways, such as continuing to pay the family bills and expenses. However, in order to deduct those periodic payments for income tax purposes, while still negotiating Interim Separation Agreements, Partial Separation Agreements or Court Orders are essential. If it is an Interim Separation Agreement or Partial Separation Agreement, they should be signed by both parties, witnessed and dated. Mere letters or email exchanges between lawyers or spouses outlining spousal support amounts are not enough.
It is harder to go backwards when it comes to deducting spousal support payments on your taxes. You can only go back one previous year when drafting an agreement if you want to make previously paid spousal support tax deductible.
Disclaimer: The information contained on this page is only intended for information purposes and is not intended to be construed as legal advice. Speak to one of our family law lawyers if you have any questions about spousal support.