Spousal Support Advisory Guidelines:
A Draft
Proposal
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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 stage—to 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 recipient’s income
and decreases in the payor’s income. We have left others, such as
post-separation increases in the payor’s 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.
We should make clear at the outset that the advisory guidelines do
not—and cannot—affect 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 parties’ 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 court’s 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 judgment—as is the practice in many parts of the country—the
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.
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:
- the payor spouse’s income goes down;
- the recipient spouse’s income goes up; or
- 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 spouses’ 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,
Alice’s 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 Payor’s
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. Arthur’s income increases to $110,000 gross
per year, while Ellen’s remains unchanged.
A court, on an application for variation, might order that none, some
or all of Arthur’s 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 spouse’s income increases, then
child support will usually increase too, if requested. Let’s 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 Ted’s 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 Ted’s 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 Alice’s
percentage of family net disposable income would drop, as would her
percentage of INDI, calculated using Ted’s 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.
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 recipient’s income after separation would lead to an
increase in the spousal support payable. Once again, as with the payor’s
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 Arthur’s 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 Ellen’s income reduction were taken
into account. The range could rise as high as $1,750 to $2,333 monthly
if the full amount of Ellen’s reduction were considered.
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 Alice’s 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 spouses’
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 spouses’
incomes and circumstances have remained unchanged over time, which is very
unlikely. It would be much more likely that Alice’s 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 Ted’s
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
Let’s 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 Payor’s
Remarriage or Re-partnering
The payor’s 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.
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 recipient’s 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 spouse’s or partner’s 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, eventually—faster or slower, depending upon the
formula adopted—spousal 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 recipient’s remarriage or re-partnering to individual
case-by-case negotiation and decision making.
Second families—or, more accurately, subsequent children—raise 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 payor’s 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 payor’s 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 payor’s
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.
