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Spousal Support: The Spousal Support Advisory Guidelines

Spousal Support: The Spousal Support Advisory Guidelines

Spousal support is often a very contentious issue on separation as it has a much more subjective approach than child support.  A lot more factors go into determining a spousal support amount and there is no hard and fast rule on how it is to be calculated.  The government has provided a set of guidelines called the Spousal Support Advisory Guidelines (“SSAG”), but not even this is followed strictly.  Sometimes a judge may just pick a number they feel is appropriate having looked at all the factors.

What will follow is an overview on how spousal support is generally approached via the SSAG so that you have a good background on the general principles behind its calculation.

Under the SSAG there are two ways of calculating spousal support: the with child support formula and the without child support formula.

Please keep in mind that the following examples are not accurate calculations but approximations for educational purposes.

 

With Child Support Formula

With this formula, you look at the following factors:

  1. Gross income
  2. Child support being paid
  3. 7 expenses being paid
  4. Taxes and other deductions
  5. Government Benefits and credits
  6. Length of the marriage and/or cohabitation
  7. Age of children
  8. Recipient needs
  9. Ability of payor to pay

What we need to do is look at the amount that should be paid and how long it should be paid.  When calculating spousal support you usually come up with a range and determine where in that range you should fall.

Step 1: Calculating the spousal support amount

Start by determining your gross income, which is your income before taxes and other deductions are applied.  Then you subtract child support (or add it if you are the recipient), taxes and other deductions.  Finally, you add back any government benefits and credits that may apply.  This initial calculation will provide you with your Individual Net Disposable Income (“INDI”).  See the example below for a couple with 2 children who cohabited for 2 years before being married for 10 years.

Malik’s Monthly Gross income $125,000/12

=$10,417

Child support for 2 children in Ontario (see post on child support for information on how to determine child support) $1,777
Taxes paid ~30% $10,417*30% = $3,125
Malik’s INDI Calculation

Monthly Gross income

-Child support

-Taxes

(No benefits or credits to apply)

 

$10,417

-$1,777

-$3,125

 $0

$5,515

Malik has an INDI of $5,515.  Next we move on to the recipient, a similar formula with a little bit of a difference.

Nubia’s Monthly Gross income $50,000/12

= $4,167

Child support received $1,777
Taxes paid ~20% $4,167 * 20% = $833
Benefits Recieved $651
Nubia’s INDI Calculation

Monthly Gross income

+ Child support

-Taxes

+ Benefits and Credits

 

$4,167

$1,777

-$833

$651

$5,762

With both INDI’s known we add them together: $5,515 + $5,762 = $11,277 total

Since Nubia has both children living with her, Malik pays spousal support that would put Nubia within the 54-60% range of the total (note: this number changes depending on how many children are living with the recipient, if it was only one child the recipient might receive anywhere from 45-50% of the combined INDI).  For example:

  • Nubia is the recipient
  • 54-60% of $11,277 = $6,089 to $6,766

We now subtract Nubia’s INDI from these amounts to see what spousal support could be paid:

  • $6,089 – $5,762 = $327
  • $6,766 – $5,762 = $1,004

Nubia’s spousal support could then range from $327 to $1,004 monthly in order to bring her to that 54-60% share.  We use the factors mentioned above to determine where in that range she should fall and this is done on a case by case basis with need being one of the most important factors.

How long is spousal support supposed to be paid?

The upper part of the range is the length of the marriage or the date the last or youngest child finishes high school; the lower range is half the length of the marriage or the date the youngest child starts full time school.  Generally, only the length of the relationship is used and I will continue with that in mind.  We could simplify as follows: length of marriage * 0.5-1.  For Nubia and Malik’s relationship of 12 years, that would be a range from 6-12 years.

All this does is give us another set of ranges to make a decision with.  So how do we know WHERE within the range we should ultimately be?

There are multiple factors that are considered to determine where to fall within the range.  These can include:

  1. Compensatory claims
    1. The recipient needs (limited income earning capacity or age a factor here)
    2. Age, number, needs and standards of living children. Are there any special needs?
  2. Needs and ability to pay of Payor
    1. Consider meaningful access by Payor
  3. Work incentives for Payor
    1. Consider net income and out of pocket costs
  4. Property division and debts
  5. Self-sufficiency incentives
  6. Compelling Financial Circumstances
  7. Debt payment – used where negative net worth and one spouse paying disproportionate share
  8. Prior support obligations
  9. Illness and Disability

For example, if there are no special needs of the children, Malik has no concerns regarding his ability to pay, he has no other support obligations, and Nubia has no significant need for the money, Nubia would likely receive the lower end of support being 6 years.  Again, this is all hypothetical and each situation can vary.  Also, there are different formulas depending on whether there is shared custody, split custody, step children, adult children and more.

 

Without Child Support Formula

This is similar to the with child formula as you start with the same values.  How you calculate the actual payment is different though.  The range here is 1.5-2%, times the income difference between the spouse’s gross income, times the years of cohabitation to a maximum of 50% of that income difference.

Here is what that looks like:

Malik’s Gross income $10,417
Nubia’s Gross Income $4,167
Income Difference $10,417

– $4,167

$6,250

Years of cohabitation 2 years cohabited

10 years married

12 years total cohabitation

Notice here we do not subtract any taxes or any other deductions here.  We now have the numbers we need in order to perform the next step of the calculation (note that this is just one method of doing the calculation):

  • Convert the percentages into decimals: 1.5% = 0.015 and 2% = 0.02
  • Multiply these decimals by the difference in income
    • 0.015 * $6,250 = $94
    • 0.02 * $6,250 = $125
  • Finally, multiply these final numbers by the years of cohabitation:
    • 94 * 12 = $1128
    • 125 * 12 = $1500

This gives you a range of spousal support to be paid from $1128 to $1500 monthly.  Alternatively, you could multiply 1.5-2% by the years of cohabitation then just multiply those numbers by the income difference and you would reach the same result.

Isn’t math fun?

Is the duration or payment different with this formula?

Somewhat.  The duration is 0.5 to 1 for each year of cohabitation only (no child factors to consider here).  Duration is indefinite if the marriage is 20 years or longer, OR if the marriage lasted 5 years or longer when years of marriage and age of support recipient at separation total 65 or more.

So in our example the range is from 6 years to 12 years of support payments.

Otherwise the same factors mentioned above that can affect the duration of support can apply here as well.

Is there a deadline to Apply for Spousal Support?

Under s. 16(1)(c) of the Limitation Act, there is no deadline (or limitation period) to apply for spousal support.  However, need is a prominent factor in determining how much support to award.  If a spouse waits too long and a court deems that they are financially stable enough to not need support, it may not be awarded at all.

If you have any questions or concerns regarding support in your circumstances, give the experts at Rabideau Law a call to see how we can help.