What is Spousal Support (Alimony)?
Spousal support, sometimes called alimony, is the payment made by one spouse to the other spouse for their maintenance and support. Unmarried spouses can also apply for support under the Family Law Act. This is called partner support.
How Does Spousal Support Work?
Spousal support may be paid monthly, or as a lump sum. Unlike child support, a spouse is not automatically entitled to support. Instead, the spouse claiming spousal support must prove entitlement. In other words, they must show the Court why they deserve support. There are three kinds of entitlement:
- Compensatory – To prove compensatory entitlement for spousal support, the spouse must show that they made career sacrifices for the benefit of their spouse’s career or the family. For example, if the wife quits her job in Edmonton so that her husband can take a new job in Fort McMurray, she may be entitled to support to compensate her for this career sacrifice.
- Non-Compensatory – To apply for “needs-based” support, the spouse must show that they are struggling financially, and that this struggle is because of the marriage’s breakdown. For example, if the husband is the breadwinner in the relationship, and the wife was a stay-at-home mother with no job experience, she may receive support until she can support herself.
- Contractual – Sometimes Prenuptial Agreements will include clauses stating that one spouse is entitled to spousal support if the marriage breaks down. If this is the case, then entitlement will be a given.
In determining entitlement for spousal support, the courts consider the spouse’s “condition, means, needs and other circumstances” which may include factors like:
- Length of time the spouses lived together or were married;
- The domestic roles and responsibilities performed by each spouse during the relationship;
- The economic circumstances arising from the relationship or its breakdown;
- Whether there are other sources of support, for example, child support;
- The ability of the spouses to become self-sufficient.
How is Spousal Support Calculated?
Once entitlement is found, then spouses must consider the “quantum” (amount) and “duration” (length of time) of spousal support.
Quantum – Quantum is “how much” will need to be paid in spousal support. Unlike child support, there is no fixed amount of spousal support based upon the payor’s income. Instead, the discretion to award child support rests with the spouses themselves (if they can reach an agreement), or with the court.
The Spousal Support Advisory Guidelines provide a broad range of possible spousal support outcomes. Where you fall in this range will depend upon a number of factors, including the length of the marriage, the income difference between the spouses, and the age when the spouses separated.
To be clear, the Guidelines are not binding in Court. Instead, the Court will set a number which it deems to be fair and reasonable, having considered the factors and objectives contained in Section 15.2 of the Divorce Act. These include the following factors:
(4) In making an [spousal support order] the court shall take into consideration the condition, means, needs and other circumstances of each spouse, including
(a) the length of time the spouses cohabited;
(b) the functions performed by each spouse during cohabitation; and
(c) any order, agreement or arrangement relating to support of either spouse.
In addition to these factors, the Court will consider the following objectives in making its decision:
(6) An order [for spousal support] should
(a) recognize any economic advantages or disadvantages to the spouses arising from the marriage or its breakdown;
(b) 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;
(c) relieve any economic hardship of the spouses arising from the breakdown of the marriage; and
(d) in so far as practicable, promote the economic self-sufficiency of each spouse within a reasonable period of time.
Generally speaking, more spousal support will be awarded in marriages in which: the spouses lived together for a long time, one spouse was a stay-at-home parent, or there is a big difference between the spouses incomes at the end of the marriage.
On the other hand, short term marriages, relationship where both spouses worked, or they earn similar incomes, will not usually result in a large spousal support award.
How Long is Spousal Support Paid?
In addition to setting a quantum (amount) of partner support, the Court will also consider the duration (length of time spousal support must be paid).
Duration – Spousal support may be paid on a monthly basis, or it may be paid as a lump sum. If support is paid on a monthly basis, then the Court may award support for a specific number of months, or it may be indefinite.
Indefinite spousal support means that there is no built-in expiration date. Instead, support must be paid until a specific event occurs, or until a Court makes a new order. Often, indefinite support will continue until there has been a “material change in circumstances” which mitigate the need for spousal support, or prevent the payor from making support payments.
Common reasons for recalculating spousal support obligations include:
- The payor spouse’s income has changed. For example, they started a new job that pays much more (or less), they lost their job due to an economic downturn or injury, or they have simply retired.
- The recipient spouse’s income has change. For example, they could have started a new career in which they earn more than the payor spouse, or they may have received a large inheritance.
- Either parties’ personal expenses have changed. For example, one of the spouses is remarried and now has the benefit of dual incomes.
Spousal support can also be paid as a lump sum. In that case, the total amount will often be discounted to account for inflation and interest.
Is Spousal Support Tax-Deductible?
Spousal support has tax implications in Canada, both for the payor and receipt spouse. The tax complications will depend on how the support is paid: is it periodically, as a lump sum, or a combination of the two. It is important to speak with your divorce lawyer, or accountant, to determine the tax complications in your particular case,.
Generally speaking, spousal/partner support is tax deductible for the payor—and taxable income in the hands of the recipient—if it is:
- Paid on a regular, periodic basis;
- Paid pursuant to a separation agreement or a court order; and
- Paid directly to the former spouse, and not through a third party or corporation.
If the support is paid by way of a lump sum payment, then this cannot be deducted for tax purposes by the payor, nor is it taxable income in the hands of the recipient. For this reason, lawyers and the courts will often discount lump sum payments to account for the tax benefits to the recipient spouse.
Am I Entitled to Partner Support/Do I have to Pay Alimony?
As has been discussed in earlier sections, spousal support is an entitlement, not a right. This means that the question of whether or not you will receive or pay support depends on your family’s unique circumstances.
If you and your spouse are separating, it is best to contact a lawyer as soon as possible to determine whether or not support ought to be paid. If not, you risk overpaying or underpaying support, which can result in retroactive spousal support claims against either spouse.
In general you may have to pay support if you were the breadwinner during the relationship, if you currently earn significantly more than your spouse, and if your spouse made career sacrifices from which you benefited. On the other hand, you may be able to claim alimony if you were a stay-at-home spouse, if you were economically disadvantaged by the marriage’s breakdown in some way, or if you signed a contract (such as a prenup) which guarantees you support.
How is Partner Support Enforced?
Although it is possible to take private collections actions against a partner who fails to pay support on time, the easiest course of action is to register your Agreement or Court Order with the Maintenance Enforcement Program (“MEP”). MEP is a government agency which automatically takes collections actions for child support and partner support orders.
Under the Maintenance Enforcement Act, MEP has broad authority to enforce support orders, and may take some or all of the following actions against a spouse who fails to pay support:
- Fine a payor parent, and charge them interest on uncollected support payments.
- Garnish a payor’s wages. In other words, MEP will direct a delinquent payor’s employer to provide a portion of the payor’s wages directly to MEP.
- Seize the balance of a payor’s bank accounts, tax refunds, or retirement savings.
- Suspend a payor’s hunting, fishing, or driver’s licenses.
- Apply to Court to hold the payor parent in contempt. In rare circumstances, this could result in the payor parent being incarcerated.
There are some exceptions regarding what MEP can and cannot enforce. It is best to consult with a divorce lawyer to determine whether or not your Agreement or Order can be enforced by MEP. If not, a lawyer will be able to help you obtain support using an alternative method.
How Do I Terminate Spousal Support?
Spousal support awards often include a built-in termination date. For example, they may be payable for a specific period of time, or they may be one time lump-sum payments. However, if the alimony is for an indefinite duration then you may still be able to terminate your spousal support obligations in certain circumstances. These are the general steps in this process:
- Is there a legal reason for changing the amount of spousal support? Generally, this will involve a review date build into the Separation Agreement. If not, then you will need to show that there has been a “material change in circumstances”. This refers to a change so large, or unexpected, that the Court would have granted a different order had this been the case when the original award was made. Examples of material changes in circumstances include the spouses’ retirement, an injury that prevents a spouse from working, or a recipient spouse greatly increasing their income.
- Provide financial disclosure to your spouse which documents this change in circumstances. The onus is on you to ensure that you have provided your spouse with enough information to determine whether or not you earn enough money to pay support.
- Resolve the matter. It is best to start by negotiating with your spouse. If this does not work, we encourage spouses to attempt formal negotiation or mediation. If nothing else works, then you will need to bring a court application to terminate spousal support.
Contact an Edmonton Spousal Support Lawyer Today
Spousal & partner support can be a very complicated issue because there are a lot of moving parts. This is where a family lawyer comes in. A family lawyer will be able to give you objective, reasonable advice when you need it most, and can estimate what your entitlement or liabilities may be. Feel free to contact a lawyer or mediator at Morrison LLP at 587-758-1099 about your spousal support question. The first 30 minutes of the call is free.
Although we are based in Edmonton, our family & divorce lawyers—and practicing mediators—are proud to serve much of northern Alberta, including the following communities:
- Edmonton & Area – Sherwood Park, Beaumont, Leduc, Fort Saskatchewan, St. Albert, Spruce Grove, Stony Plain.
- North – Athabasca, Morinville, Westlock, Gibbons, Barrhead, Redwater, Peace River, High Level, Fort McMurray.
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- East – Vegreville, St. Paul, Cold Lake, Bonnyville, Vermillion, Wainwright, Tofield.