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Spousal Support Advisory Guidelines:
A Draft Proposal

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10. VARIATION, REVIEW, REMARRIAGE, SECOND   FAMILIES

The formulas proposed in Chapters 5 and 6 are intended to apply to initial orders and to the negotiation of initial agreements. Where there is an entitlement to support, the formulas generate ranges for both amount and duration of spousal support at the time of divorce. The formulas will also determine a range of amounts for interim orders under the Divorce Act. What role can the proposed advisory guidelines play thereafter, upon variation or review? What about remarriage or re-partnering or second families? These issues proved to be some of the most difficult of all in constructing spousal support advisory guidelines. In the earlier parts we have touched upon some of these issues.

Ideally a truly comprehensive set of advisory guidelines would apply to the full range of issues that can arise on variation and review. The current state of the law renders that impossible at the present time. We opted for a more modest approach at this stageóto apply the guideline formulas as far as consensus and the current case law allow, and no more. We identified certain situations where the advisory guidelines would apply on reviews and variations, including increases in the recipientís income and decreases in the payorís income. We have left others, such as post-separation increases in the payorís income, re-partnering, remarriage and second families, to discretionary, case by case determinations under the evolving framework of current law. We hope that, at some later stage, after a period of experience with the advisory guidelines, it will be possible to develop formulaic ranges to guide resolution of these remaining issues.

10.1 Material Changes, Review and Issues of Continuing Entitlement

We should make clear at the outset that the advisory guidelines do notóand cannotóaffect the basic legal structure of variation and review. Under section 17(4.1) of the Divorce Act, a material change of circumstances is a threshold requirement for the variation of court-ordered spousal support. Section 17(7) sets out the objectives of an order varying spousal support and section 17(10) addresses variations after spousal support has ended, imposing a condition that the changed circumstances relied upon be related to the marriage. The process of review allows for reassessments of support without the requirement of a material change in circumstances, a process elaborated by appeal and trial courts in case law.

None of this is affected by the proposed advisory guidelines, which deal with the amount and duration of spousal support. The spouse seeking to vary court-ordered support will still have to prove a material change before the advisory guidelines can operate to determine amount and duration. In a similar vein, a review is possible only if a provision for review was included in the initial order and only if any preconditions for review are met, e.g. the passage of a period of time or the completion of a training program. Only then will it be possible for the advisory guidelines to be applied to determine amount and duration.

If spousal support has been negotiated, the result will be a separation agreement that deals with spousal support. The possibilities for reviewing or modifying spousal support that the spouses have agreed upon will depend on many factors, including the drafting of the agreement and whether or not the agreement has subsequently been incorporated into the divorce judgement.

We will deal first with the situation where there has been no incorporation. The effect of subsequent changes in the partiesí situation will be governed by the terms of the agreement. If the agreement provides for reviews by the parties at specified times or includes a material change clause, and if the conditions for these are met, it would be possible for the advisory guidelines to apply to determine amount and duration. However, the advisory guidelines would have no application if the agreement is a final agreement in which spousal support has been waived or time-limited.

As has been emphasized at many points in this document, the proposed advisory guidelines do not deal with the effect of a prior agreement on spousal support. As informal guidelines, they confer no power to override agreements. The Miglin[34] case continues to govern the issue of the effect of a prior agreement on a courtís ability to award spousal support. The advisory guidelines would only be helpful after the Miglinanalysis, if a finding were made that the agreement was not determinative and spousal support was to be determined afresh by the court.

In cases where a spousal support agreement has been incorporated into the divorce judgmentóas is the practice in many parts of the countryóthe agreement is treated as a court order. If the agreement provides for review or includes a material change clause, and those conditions are met, the advisory guidelines may be applicable to determine amount and duration. If the agreement is a final agreement, waiving or time-limiting support, the threshold requirement of a change in circumstances under s. 17 of the Divorce Act would have to be satisfied before a variation could be granted, as well as the causal connection requirement in s. 17(10) if the spousal support had ended at the time of the application. Given that the court order in these cases rests upon an agreement, the Miglin analysis would also be relevant in determining whether the requirement of material change had been met and whether a variation was appropriate.

Apart from the issue of the governing legal framework, a review or variation may involve issues of continuing entitlement that would determine the application of the advisory guidelines. Entitlement is always a live issue, a precondition to determining amount and duration under the guidelines. As circumstances change, with changes in employment and income, retirement, remarriage, re-partnering and second families, entitlement may come to the forefront as a threshold issue.

Variations and reviews raise many different issues for resolution. In Chapters 5 and 6, we canvassed some of these issues, especially in our discussions of duration. In what follows we will organize our discussion of this material around the different kinds of issues that are raised on variations and reviews.

10.2 Applications to Reduce Spousal Support Because of Changes in Income

The largest category of variations and reviews consists of applications seeking a reduction in spousal support based upon a change in the income of one party or the other. One of three reasons provides the foundation for the application:

  1. the payor spouseís income goes down;
  2. the recipient spouseís income goes up; or
  3. the payor spouse applies to reduce or terminate support on the grounds that the recipient spouse ought to have a higher income.

In each of these three situations the advisory guidelines can be used to determine the amount of support. In some situations, the advisory guidelines can even result in the termination of spousal support, if the amount of support falls to zero with little or no prospect of future change.

In situations (i) and (iii), difficult questions of imputing income can arise. In situation (i), there can be questions about the good faith and credibility of the payor spouse who alleges an income reduction, which in turn may call for imputing income to the payor. In situation (iii), income may have to be imputed to a recipient spouse who has failed to maximize earning capacity.

Under the without child support formula, as the gross income difference between the spouses narrows, spousal support will be reduced. Similarly, under the with child support formula, as the disparity between the spousesí net incomes is reduced, so too is the amount of spousal support required to bring the income of the lower income recipient spouse up to the desired percentage. At some point, as the disparity in spousal incomes narrows under either formula, entitlement will disappear.

We provide below some examples of how the advisory guidelines would apply to variation or review applications in this category.

Example 10.1

In Example 5.2 John and Mary had been married for 25 years in a traditional marriage, with two grown-up children. Mary had no income, but John was earning $100,000 gross per year. Now assume that John has lost his previous job and changed employers, with a reduction in his annual gross income down to $80,000, while Mary still has no income.

On a variation application by John, the range for spousal support would be reduced, under the without child support formula, from the initial $3,125 to $4,167 per month, down to $2,500 to $3,333 per month.

Example 10.2

In Example 6.1 Ted was earning $80,000 gross per year at the end of an 11-year marriage, with two children aged 8 and 10, while Alice was working part time, earning $20,000 gross per year. Now assume that Alice has found a full-time job, increasing her gross annual income to $35,000, while Ted still earns $80,000.

On a variation or review under the with child support formula, Aliceís increase in income would reduce the range for spousal support, from the original $695 to $1,286, down to $315 to $916 per month.

Example 10.3

Again using Example 6.1 above, now assume that the children are 13 and 14 and Alice is still working part-time, but Ted alleges that Alice was offered a full-time job by her employer and she turned it down.

Upon review or variation, a court might decide to impute the full-time income of $35,000 per year to Alice and to reduce support to the same range as above, of $315 to $916 per month. Or a court might not be prepared to go to that full amount, instead imputing a slightly lower income, such as $30,000, which would produce a range of $463 to $1,073 per month.

10.3 The Payorís Post-Separation Income Increase

There are two possible formulaic extremes here. At one extreme, one could decide that any post-separation income increase of the payor spouse should not affect the amount of spousal support. After all, some would suggest, the recipient is entitled to a sharing of the marital standard of living, but no more. Certainly, this bright-line method would be predictable and administratively simple. At the other extreme, one could argue that the formula should just continue to be applied to any income increase for the payor. This again would offer a predictable result, but one which the basic principles of spousal support would not justify in all cases. This approach is most compelling after a long traditional marriage

Under the current law, it is impossible to maintain either of these approaches to the exclusion of the other. Some rough notion of causation is applied to post-separation income increases for the payor, in determining both whether the income increase should be reflected in increased spousal support and, if it should, by how much. It all depends on the length of the marriage, the roles adopted during the marriage, the time elapsed between the date of separation and the subsequent income increase, and the reason for the income increase (e.g. new job vs. promotion within same employer, or career continuation vs. new venture). The extent of sharing of these post-separation increases involves a complex, fact-based decision.

We can propose one formulaic limit in these cases: the upper limit upon any increased spousal support ought to be the numbers generated by the formulas. As the following examples show, that upper limit offers some help in defining a range of possible results after a post-separation income increase.

Example 10.4

In Example 5.1, Arthur and Ellen were married for 20 years and had one grown-up child. At the time of the initial order, Arthur earned $90,000 gross per year and Ellen earned $30,000, both working full time. Under the formula, spousal support was indefinite, in the range of $1,500 to $2,000 per month. Arthurís income increases to $110,000 gross per year, while Ellenís remains unchanged.

A court, on an application for variation, might order that none, some or all of Arthurís post-separation income increase be taken into account. If all the increase were taken into account, the formula would define the upper limits of any varied spousal support within a range of $2,000 to $2,666 per month.

Example 10.5

The arithmetic becomes more complicated under the with child support formula. When the payor spouseís income increases, then child support will usually increase too, if requested. Letís go back once again to Ted and Alice in Example 6.1. At the time of the initial order, Ted earned $80,000 gross per year and Alice earned $20,000, after 11 years together. Their two children were aged 8 and 10 at that time. Spousal support under the formula was in a range from $695 to $1,286 monthly. Assume Tedís income subsequently increases, to $100,000 gross per year. His child support for two children will rise from $1,031 to $1,240 per month.

If none of Tedís increase were taken into account for spousal support purposes, then Ted would pay child support of $1,240 and the range for spousal support would remain unchanged. The result would be that Aliceís percentage of family net disposable income would drop, as would her percentage of INDI, calculated using Tedís new income. At the other extreme, the full amount of the increase might be taken into account under the spousal support formula, generating a new and higher range of $1,295 to $1,961 per month.

10.4 The Recipientís Reduced Income After Separation

Suppose the recipient loses employment after the initial order, or suffers an illness or disability, or otherwise suffers a reduction in income. If either of the income-sharing formulas were applied, any reduction in the recipientís income after separation would lead to an increase in the spousal support payable. Once again, as with the payorís post-separation increase, some notion of causation seems to operate under the current law, requiring another complex, fact-based decision. While a formulaic solution is thus not possible, the same upper limit can be applied, i.e. the upper limit upon any increased spousal support ought to be the numbers generated by the formulas.

Example 10.6

In Example 5.1, Ellen was working full time and earning $30,000 gross per year at the time of the initial determination. Assume Ellen has been reduced to part-time hours and now earns $20,000 gross per year, while Arthurís income is unchanged at $90,000.

The initial range of spousal support was $1,500 to $2,000 monthly, where it would remain if none of Ellenís income reduction were taken into account. The range could rise as high as $1,750 to $2,333 monthly if the full amount of Ellenís reduction were considered.

10.5 Crossover Between the Two Formulas

At the end of Chapter 6, under the with child support formula, we introduced the possibility of crossover between the two formulas. As children get older, finish their education or otherwise cease to be children of the marriage, then the child support obligation ends. What happens at that point? In our view, it should be possible for either spouse to apply to cross over from the with child support formula to the without child support formula, by way of application to vary or review. This crossover would be entirely consistent with the approach and language of s. 15.3 of the Divorce Act, especially s. 15.3(3). Section 15.3(3) provides that in cases where spousal support was reduced or not ordered because of the priority given to child support, any subsequent reduction or termination of child support constitutes a change of circumstances for the purposes of bringing an application to vary spousal support.

The crossover from the one formula to the other will only affect the amount of spousal support, but not the duration. Under the first, longer-marriage test for duration under the with child support formula, which applies to medium-to-long marriages with dependent children, the support recipient has already been given the benefit of length of marriage in the initial determination of the outside limit of duration.

Crossover situations will mostly arise in medium-to-long marriages, where the children are older at the time of the initial order. These are the cases where duration is driven by the length of the marriage, so that after child support ceases, spousal support will usually remain payable for a further period. In short-to-medium length marriages with dependent children, the outside limit of duration is the end of the child-rearing period, so no spousal support would be payable after child support has ended. Thus there is no potential for crossover between the formulas.

Often the application to vary, to cross over to the without child support formula, will come from the recipient spouse in a longer marriage. Consider the following example.

Example 10.7

Take once again the example of Ted and Alice in Example 6.1. At the time of the divorce Ted made $80,000 gross per year and Alice earned $20,000. They had been married 11 years with children aged 8 and 10 at separation.

Under the with child support formula, spousal support was initially in the range of $697 to $1,287 per month. Under the longer-marriage test for duration, the maximum duration was 11 years. Recall that the 11-year maximum was derived from the first test for duration, based upon the length of their marriage, as that was longer than the time remaining to the end of high school for the youngest child (which was 10 years). If their two children pursued any post-secondary studies, then child support would still be payable and the with child support formula would continue to apply right to the end of the 11-year maximum for spousal support, although the amount of support would likely have changed based on improvements in Aliceís employment situation.

If we change those facts slightly, however, then the potential for crossover emerges. If Ted and Alice had been married for 20 years at separation and thereafter their children finished school and child support terminated, Alice might wish to apply to vary, to cross over.

Under the with child support formula, the initial range of spousal support was $697 to $1,287 per month. Assuming the spousesí incomes remained the same, that range would be higher under the without child support formula: $1,500 to $2,000 per month for a 20 year marriage with that gross income difference.

If Ted and Alice had been together for 25 years, the new range after crossover would be even higher. The new range would be between $1,875 and $2,500 per month. These higher numbers flow from two factors: the impact of length of marriage upon the without child support ranges, and the additional ability to pay freed up by the absence of a child support obligation.

In drawing out these possibilities, we have assumed that both spousesí incomes and circumstances have remained unchanged over time, which is very unlikely. It would be much more likely that Aliceís income would be higher, as she was working part time at the time of the initial order. Her higher income would likely have reduced her spousal support. But Tedís income might have gone up too, which may have affected his spousal support, depending upon the treatment of his post-separation income increase as discussed above.

Situations where the payor spouse would be the one applying to vary and cross over to the without child support formula would be fewer. Given the way the two formulas operate, for the most part, these would be cases where the marriage lasted 15 years or less. In these cases, the payor spouse would argue that the without child support formula, where the percentages are driven by the length of the marriage, would produce a lower range for spousal support compared to the with child support formula. We provide an example below.

Example 10.8

Letís start again with Ted and Alice, assuming they have the same incomes they did at the point of separation as in Example 10.7. Assume that their children pursue no post-secondary employment and that child support ends after 10 years. Spousal support will still be paid for another year.

Ted might apply to vary, arguing that spousal support should be fixed in the without child support range of $825 to $1100 if the initial support had been set at the higher end of the range of $697 to $1,287 monthly. Again, however, it must be remembered that incomes will change over time, which in turn will alter the stakes and the incentives involved in crossover questions.

10.6 The Payorís Remarriage or Re-partnering

The payorís remarriage or re-partnering usually is not grounds for a reduction in spousal support under the current law, apart from some exceptional cases. There is no need for any formulaic adjustment here.

10.7 The Recipientís Remarriage or Re-partnering

The remarriage or re-partnering of the support recipient does have an effect on spousal support under the current law, but how much and when and why are less certain. There is little consensus in the decided cases. Remarriage does not mean automatic termination of spousal support, but support is often reduced or suspended or sometimes even terminated. Compensatory support is often treated differently from non-compensatory support. Much depends upon the standard of living in the recipientís new household. The length of the first marriage seems to make a difference, consistent with concepts of merger over time. The age of the recipient spouse also influences outcomes.

In particular fact situations, usually at the extremes of these sorts of factors, we can predict outcomes. For example, after a short-to-medium first marriage, where the recipient spouse is younger and the support is non-compensatory and for transitional purposes, remarriage by the recipient is likely to result in termination of support. At the other extreme, where spousal support is being paid to an older spouse after a long traditional marriage, remarriage is unlikely to terminate spousal support, although the amount may be reduced.

An ability to predict in some cases, however, is not sufficient to underpin a formula for adjustment to the new spouseís or partnerís income. Ideally, a formula would provide a means of incorporating some amount of gross income from the new spouse or partner, to reduce the income disparity under either formula. Any such incorporation could increase with each year of the new marriage or relationship. Where the recipient remarries or re-partners with someone who has a similar or higher income than the previous spouse, eventuallyófaster or slower, depending upon the formula adoptedóspousal support would be extinguished. Where the recipient remarries or re-partners with a lower income spouse, support might continue under such a formula until the maximum durational limit, unless terminated earlier.

For the moment, however, we have been unable to construct a formula with sufficient consensus or flexibility to adjust to these situations. This is a fertile area for further discussion in the next stage of the project, especially as people become comfortable with the basic concepts of the advisory guidelines. For now, we have to leave the issues surrounding the recipientís remarriage or re-partnering to individual case-by-case negotiation and decision making.

10.8 Second Families

Second familiesóor, more accurately, subsequent childrenóraise some of the most difficult issues in support law. We have already addressed prior support obligations for prior spouses and prior children as an exception under both formulas. We have also addressed remarriage and re-partnering. Under this heading, we consider a different issue, that of support for subsequent children.

Since the coming into force of the Federal Child Support Guidelines, courts have struggled with these issues in the child support setting, left largely to discretionary decision making, mostly under the undue hardship provisions in the Child Support Guidelines.[35] The issues do not get any easier when the potential conflict between child support and spousal support is added to the mix.

The first-family-first philosophy is the most common approach. On this view, the payorís obligations to the children and spouse of the first marriage take priority over any subsequent obligations. Most who adopt the first-family-first principle will acknowledge a narrow exception: where payment of first-family support would drive the second family onto social assistance or otherwise into poverty, relief may be granted, but only in extreme cases. Other than this narrow exception, first-family-first provides a simple rule for child and spousal support: no change for subsequent children.

If child support is the only issue, there is a strong second philosophy that runs through the cases: to determine child support in a way that treats all the payorís children equally. This is usually done through the use of household standard of living calculations. This equal-treatment-of-children approach gives greater weight to the interests of subsequent children, but gives no guidance to balancing the demands of spousal support to a first spouse vs. support for subsequent children. There is a tendency on this approach to give reduced weight to spousal support, given the concern for equal treatment of the payorís children. Reduced spousal support is often used as a means of adjustment between the households.

In the absence of any policy in the Federal Child Support Guidelines on this issue, it is difficult, if not impossible to articulate any related policy on spousal support vs. subsequent children. For now, again with some regret, we must leave the issues of quantum and duration to discretion or case-by-case decision making. Any changes in child support policy on second families would have important implications for spousal support issues. Perhaps during the next phase of the project, these second family issues can be discussed and some guidelines developed.