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In a recent case, an Ontario court considered the interesting question of how much spousal support should be awarded to a wife whose husband earned approximately $2,090,000 per year.
The Parties’ Story
The parties began to cohabit in December 2001, married in June 2006 and separated in May 2017.
While the husband was a very successful businessman, the wife had not worked outside of the home for the past 11 years.
Following the parties’ separation, the husband provided a total of $1,759,702 to the wife ($407,250 of which he paid as temporary without prejudice spousal support).
The Relevant Legal Principles
The Divorce Act allows the court to order periodic and/or lump sum spousal support payments. The Act also enables the court to make interim spousal support orders. A spousal support order may be made for definite or indefinite periods, or until a specified event occurs. The court can also impose any terms, conditions or restrictions on the order that it sees fit.
The Act requires the court to take the “condition, means, needs and other circumstances” of each spouse into account when making an order for support, including:
- the length of time the spouses cohabited;
- the functions performed by each spouse during cohabitation; and
- any order, agreement or arrangement relating to the support of either spouse.
Furthermore, any order for spousal support should meet the following objectives:
- recognize any economic advantages or disadvantages to the spouses arising from the marriage or its breakdown;
- apportion between the spouses any financial consequences arising from the care of any child of the marriage over and above any obligation for the support of any child of the marriage;
- relieve any economic hardship of the spouses arising from the breakdown of the marriage; and
- in so far as practicable, promote the economic self-sufficiency of each spouse within a reasonable period of time.
As the Supreme Court of Canada outlined, a spouse may be entitled to support on three potential grounds: compensatory, non-compensatory and contractual.
There are certain considerations that apply when a payor spouse’s income exceeds the $350,000 Spousal Support Advisory Guidelines (SSAG) “ceiling.” These include:
- The formulas for amount are no longer presumptive once the payor’s income exceeds the “ceiling.”
- The ceiling is not an absolute or hard “cap,” as spousal support can and usually does increase for payor incomes above $350,000.
- The formulas are not to be applied automatically above the ceiling, although the formulas may provide an appropriate method of determining spousal support in an individual case, depending on the facts.
- Above the ceiling, spousal support cases require an individualized, fact-specific analysis. It is not an error, however, to fix an amount in the SSAG range.
- Where the payor’s income is not too far above the ceiling, the formula ranges will often be used to determine the amount of spousal support, with outcomes falling in the low-to mid-range for amount.
- Once the payor’s income is “far” above the ceiling, then the amount of support ordered will usually be below the low end of the SSAG range, but SSAG ranges are still calculated and sometimes the outcome will fall within the SSAG range.
The Court’s Decision
In granting the wife’s motion, the court found that she was entitled to non-compensatory support, which the husband did not dispute. It explained that other considerations (as outlined above) applied because the husband’s income was above the $350,000 SSAG “ceiling.”
In considering the length of the relationship, the non-compensatory nature of support entitlement, the equalization already paid and yet to be paid, as well as the relative budgets of the parties, the court concluded that it was reasonable to order the husband to pay the wife interim spousal support in the amount of $30,000 per month.
Lessons Learned
If you’re entitled to spousal support and your spouse earns more than $350,000, calculating the quantum of those payments becomes more complicated. If you have any questions about your rights or obligations, it is wise to speak with a lawyer. At Gelman & Associates, our lawyers provide exceptional legal representation in all family law matters. Our goal is to always empower clients to make informed decisions about their future. We give all prospective clients a comprehensive family law kit during their initial consultation, as well as a copy of our firm’s handbook on separation and divorce. This information is full of resources that will help you understand and navigate the difficult and often complicated separation and divorce process.
With six offices throughout Aurora, Barrie, Downtown Toronto, Mississauga, North York and Scarborough, we are easily accessible by transit and off-highway. Our phone lines are open Monday to Friday from 8:00 a.m. to 8:00 p.m. Call us at 1-844-769-0737, or contact us online to schedule an initial consultation.
