© 2005 G. Ross Davis All rights reserved

In January, 2005 the Department of Justice released an extensive proposal for "Spousal Support Advisory Guidelines" (herein "the Guidelines") authored by two very respected law professors, Carol Rogerson and Rollie Thompson that will have a major impact on spousal support awards in Canada.

The determination of spousal support is one of the most difficult areas for family law lawyers and their clients who have to navigate through the separation process. Decisions vary from court to court and judge to judge. The inability to predict outcomes in the area of spousal support causes uncertainty which, in turn, encourages litigation.

The Guidelines are an ambitious attempt to bring some measure of consistency to spousal support awards, to identify appropriate ranges for support awards both in amount and duration. Canada has had Child Support Guidelines (CSG) since 1997 which have drastically reduced the number of contested cases. Unlike CSG, which are mandatory in virtually all cases, the Guidelines are advisory only. They are true guidelines meant to be applied where reasonable or modified or even discarded if not.

This article is intended to give only a brief overview of the Guidelines and is not intended as legal advice. Those individuals who are grappling with spousal support issues in their separation need to speak to a lawyer to see if and how these Guidelines may affect their case. A copy of the Guidelines may be obtained from
www.justice. gc.ca/en/dept/pub/spousal/project/index.html
www. justice. gc.ca/fr/dept/pub/spousal/project/index.html

The Guidelines' main thesis is that, if on the breakdown of a marriage one of the spouses entitled to support, the parties should look to the difference between their respective incomes and the length of the relationship to determine how much spousal support one party should pay the other and for how long

The Guidelines propose three formulas for calculating spousal support - the without children formula which is self-explanatory, the with children formula for calculating spousal support where the recipient has custody and the support payable by custodial parent formula for calculating support where the payor has custody. Each is dramatically different from the other.

The "without children formula"

The without children formula proposes that spousal support be calculated as a percentage of the difference between the parties' incomes and that the percentage be determined by the length of the marriage - 1.5 to 2% for each year of marriage. The period of time for which support is paid is also to be determined by the length of the marriage - .5 to 1 year for each year of marriage.

An example - Ralph and Wendy were married for 8 years before separating in 2005. Ralph earns $76,000 and Wendy earns $25,000. To determine the range of support:

-     Calculate the Gross Income Difference
         ($76,000 - $25,000 = $51,000)

-     Determine the applicable percentage (1.5 - 2% x years of
      marriage)
         1.5% x 8 years = 12%
         2 % x 8 years = 16%

-     Calculate the range
         Between 12% x $51,000 = $6,120 per year ($510 per
           month)
         And 16% x $51,000 = $8,160 per year ($680 per month)

-     Calculate duration (.5 - 1 x years of marriage [ if 20+ years
           will be indefinite])

         4 to 8 years

Where any one case falls in the ranges is a matter of discretion taking into account property division, need and ability to pay, self-sufficiency issues and compensatory issues.

Recognizing that not all cases can be fairly dealt with by the formula approach SSAG also anticipate that there will be exceptions to the formula, for instance, where illness/disability, prior support obligations, compensatory claims and debt payment are factors.

The age of the parties may also be a factor. Where the length of the marriage plus the age of the recipient on separation is 65+, support is indefinite.

The maximum sharing under the without children formula is 50% of the gross income difference.

Spousal support is taxable in the hands of the recipient and deductible from income by the payor in calculating income for tax purposes.

The "with children formula

Under the with children formula source deductions and each party's contribution to child support are "backed out" to determine each party's Individual Net Disposable Income (INDI). Support is then calculated so as to leave the recipient with between 40% - 46% of their combined INDI.

Where any one particular case falls in the 40% - 46% range is determined after considering compensatory principles, the age, number and needs of the children, the needs and ability to pay of the payor spouse, the needs and standard of living of the recipient and the children, the length of marriage and self-sufficiency incentives.

While the concept may be relatively straightforward, the mathematics involved is not. It is virtually impossible to accurately calculate the range without the use of specialized software.

The with children formula calls for outside time limits on spousal support based on the length of the marriage and child rearing period remaining (ie. the date the youngest child is expected to graduate from high school).

Where the length of the marriage exceeds the number of years until the youngest child finishes high school, the maximum duration for spousal support will be the length of the marriage (except where the marriage is 20+ years in which case support will be indefinite support).

Where the length of the marriage is less than the number of years until the youngest finishes high school the maximum duration will be the number of years to the end of high school. These cases are subject to an automatic review. Where children are all pre-school the date for review will be the date the last child commences full-time school. Where the children are all in school, the review will be the date the youngest child turns 12

Special considerations apply in cases of split or shared custody

The "support payable by custodial parent formula"

The support payable by custodial parent formula is a variation of the without children formula. Before calculating the gross income difference, however, each party's contribution to child support is deducted from income. Since child support is not deductible from income, the contribution has to first be "grossed up" at the individual's marginal tax rate. Here again, specialized computer software is required in order to make the calculation accurately.

Once the gross income difference has been determined, the remaining calculations are as in the without children formula. The applicable percentage (1.5% - 2% x years of marriage) and duration (.5 - 1 x years of marriage) are the same. So too are the considerations as to where any one case falls in the range. Where any one case falls in the ranges is a matter of discretion taking into account division of property, need and ability to pay, and self-sufficiency and compensatory issues.

The same exceptions to the formula apply as in the without children formula, for instance, where illness/disability, prior support obligations, compensatory claims and debt payment are factors. An additional exception in short marriages where the child or children are very young may also apply.

Conclusion

The Spousal Support Advisory Guidelines give litigants a sense of the range within which most cases fall. The Guidelines also direct attention to the factual issues to be addressed in determining where in the range the case should fall applying the principles set out.

While the Guidelines are a useful tool, they are still in the early stages. This article is a rough overview of the provisions of the Guidelines and any attempt to implement them should be undertaken only with legal advice.

© 2005 G. Ross Davis All rights reserved - Mr. Davis practices with the Toronto firm of Bennett Best Burn LLP and restricts his practice to family law with particular emphasis on mediation and negotiation of agreements and litigation of property support custody and access issues involving married and unmarried couples. Mr. Davis is also a Dispute Resolution Officer of the Superior Court of Justice in Toronto.

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