- an order for spousal support payments, whether, monthly spousal support or periodic spousal support, are tax deductible in the hands of the payor, the person paying support, and taxable in the hands of the recipient, the person receiving spousal support; and
- Legal fees incurred to seek retain child or spousal support are tax deductible.
- Spousal Support Calculator Online
Spousal support is a complex family law issue and the amount of spousal support is not fixed like with child support. When applying for spousal support, reference to the Spousal Support Advisory Guidelines (“SSAG”), which came into effect in approximately 2008, and has since been revised in 2016, together with the Family Law Act, B.C., [SBC 2011] Chapter 25, and the Federal Divorce Act (R.S.C., 1985 c. 3 (2nd Supp.)) are the starting points for any spousal support application. Both married and common law couples (a “marriage like relationship”), the latter being the more appropriate term, may have a claim for spousal support.
Before getting to the first hurdle, one must know that there are two paths to calculate spousal support. The “with child support formula” and the “without child support formula”. The “without child support formula” applies in cases where the parties have no “dependent children”. Which means they also have no child support obligations. The two crucial factors with the “without child support formula” are the gross income difference of the spouses and the length of the marriage or period of cohabitation. The “with child support formula” is as the name suggests, the spouses have dependent children and child support is in pay. The “with child support formula” uses the net incomes of the spouses and divides the pool of combined net incomes between the two spouses, not the difference between the gross incomes.
Now that you have determined whether you are the “with child” or “without child” formula, you are onto the first hurdle, that being the question of entitlement. Which simply means are you entitled to spousal support based on one or more of the grounds? as it is not a guarantee in every case.
The Divorce Act and the Family Law Act, B.C., both outline four objectives. No objective is paramount to any other or overrides any other objective, rather, all are important in any spousal support claim. Income disparity does not mean that there is a defacto entitlement to spousal support. One first has to ask why is there a difference in income?
The three bases for entitlement to support are compensatory, non-compensatory and contractual support, whether under the Divorce Act and the Family Law Act. There can be entitlement under more than one ground.
Compensatory support is intended to address the economic advantages and disadvantages to the parties flowing from the marriage or various roles adopted during the marriage. Typical examples are: where one person stayed home full time or part time with the children of the marriage; where one partner was the secondary income earner of a lengthy marriage; the parties moved to facilitate the hiring come earning spouses career potential; or one of the spouses had the ability to obtain advanced education or training during the relationship which led to higher income.
Non-Compensatory support Is it dependency-based support which is primarily used to address the disparity between parties’ means and needs with the needs being relative to the material standard of living of the individuals. The length of the relationship together with the change in standard of living post separation and any other economic hardships existing are relevant factors to consider in any analysis. Re-partnering and post separation income increases as well as the presence of children are all factors to additionally consider.
Contractual support claims reflect either an express or implied agreement between the parties whether oral or written. As in any situation, whether family or business, it is best to have a written agreement which stipulates the express terms that the parties agree on. The Family Law Act has provisions allowing the court to overturn an agreement where certain elements exist. So when negotiating spousal support payments, it is best if both individuals have counsel or at a minimum seek counsel’s advice prior to signing an Agreement.
In any scenario where spousal support is claimed, it will be critical to review the Spousal Support Advisory Guidelines. However, it is important to understand that these guidelines are not legislated and are only considerations to take into account whether you are seeking an order or negotiating an agreement. With respect to the payment of spousal support it is important to understand that monthly or periodic payments are tax deductible in the hands of the payor and taxable in the hands of the payee, but only where there is an order or agreement (written agreement). This can be rectified by a court order retroactively accounting for past payments but only to the prior calendar year.