Difference between revisions of "Spousal Support"

}}Spousal support is a payment made by one spouse, the ''payor'', to the other spouse, the ''recipient'', to help with their day-to-day living expenses or to compensate the recipient for the financial choices the spouses made during the relationship.  

*people who are married to each other,

*people who have lived together in a ''marriage-like relationship'' for at least two years,

*people who lived together in a marriage-like relationship for less two years and have a child together, and

*former spouses.

(Incidentally, the law in British Columbia doesn't talk about people who are ''common-law spouses'' and never has. Once upon a time, people could marry each other and create a legal relationship simply by agreeing to marry, without getting a licence from the government or having a particular kind of ceremony. Because the rights between the spouses came from common law principles, these were known as ''common-law marriages''. Common-law marriages were valid in England until the ''Marriage Act'' of 1753, better known by its full flowery name, ''An Act for the Better Preventing of Clandestine Marriage''. Please don't use the term common-law marriage. It doesn't mean what most people think it means and is two-and-a-half centuries out of date.)

There is no limitation period for bringing a claim for spousal support under the ''Divorce Act''.  It can be brought before or after an order of divorce.  Nonetheless, the longer a spouse or former spouse waits, the less likely they will succeed.

 

The limitation period under the ''Family Law Act'' is two years from the date of separation for unmarried spouses and two years from the date of divorce for legally married spouses. Unmarried spouses used to have a one year limitation period under the former ''Family Relations Act'', which did catch some people out.  Even at two years, the limitation period can be deceptively short, especially if there is some dispute about when the parties separated.

There are some — though limited — circumstances where the limitation period can be extended. These circumstances include where the parties enter into formal ''[[Family_Law_Act_Basics#Out-of-court_processes | family dispute resolution]]'' as defined in the ''Family Law Act'', or where the paying spouse acts or speaks in such a way as to lead the recipient spouse to believe that they will not be relying on the limitation period.

There is no automatic obligation to pay spousal support the way there is for child support. As a result, the entitlement of a spouse to receive spousal support will be decided on the particular circumstances of that person and their relationship with the other spouse. In general, the court will take into consideration the following factors, among many others:

Once a spouse has established that they are entitled to receive spousal support, the question becomes how much support the spouse ought to get.  

The amount of spousal support payments is now generally calculated using the [[Spousal Support Advisory Guidelines]]. The Advisory Guidelines is an academic paper released by the federal Department of Justice which describes a number of mathematical formulas that calculate the amount of spousal support payments based on each person's income, the length of their relationship and the age of their children, and other factors. You can find the Guidelines in a separate section of this chapter.

The amount of spousal support is also calculated by looking at the disposable income of the payor and the reasonable needs of the recipient. If a payor has a gross income of, say, $2,000 per month, and of that money $1,500 is spent on taxes, child support, housing costs, utilities and other basic living expenses, the payor's disposable income will be $500 per month. Spousal support will usually be paid out of that remaining $500 per month if it's payable at all. Although spouses usually share in the financial consequences of the end of their relationship, the court will not force someone into bankruptcy to provide support for the other spouse. There certainly are times, however, when a support order will result in the payor racking up debt.

There are a number of different ways that an order or agreement for spousal support can deal with the issue of time:

The collection of spousal support payments for people on social assistance is run by the [http://www2.gov.bc.ca/gov/content/governments/policies-for-government/bcea-policy-and-procedure-manual/general-supplements-and-programs/family-maintenance-services Family Maintenance Program] (FMP). (This is a completely different organization than the program which enforces child support payments between spouses, the [http://www.fmep.gov.bc.ca Family Maintenance Enforcement Program].) FMP has the authority to begin court proceedings for spousal support and can apply for new orders for spousal support, or apply to change old orders for spousal support. It will do this as it sees fit without much involvement on the part of the recipient at all.

FMP will make their application whether you like it or not, and they can require that you cooperate in their application. On the other hand, FMP will be responsible for managing any court applications they begin. You will not have to worry about going to court and arguing the application yourself.

You may be allowed to keep some of the support money that the ministry collects on top of your social assistance payments. The ministry worker will tell you how much.

You may have an understanding with your spouse that no spousal support will be payable; you might not have even seen them for several years. Nevertheless, if your spouse applies for social assistance, you may find yourself being served with an application for an order that you pay spousal support. This is not something that your spouse may have any control over, so try not to be too mad about it.

A spouse who pays support on a periodic basis is entitled to claim the whole amount of their payments as a deduction against their taxable income, just like an RRSP contribution. The recipient is obliged to claim the support they have received as taxable income, just like employment income, and the recipient will wind up owing money to the government at tax time each year.

If you want to ensure that the money you are paying as spousal support is deductible, there are a couple of important points you must pay attention to in order to satisfy the tax department:

*'''Court Orders:''' The order must clearly state a fixed, periodic sum that is being paid, and this fixed sum must be described as ''spousal support''.

*'''Separation Agreements:''' In addition to a term describing a fixed, periodic sum as spousal support, the agreement must also state that the parties have been separated since a certain date and intend to continue to live separate from each other. Payments for child support and spousal support should never be expressed as a single amount.

*'''Unwritten Agreements:''' In general, the tax department will not recognize anything other than a written separation agreement or a court order. There are some exceptions to this rule, but you really should arrange your support payments in a formal fashion.

You do not have to wait for tax time. You can arrange through your payroll department and the [http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/spprtpymnts/ddctn-eng.html Canada Revenue Agency] for approval of an adjustment to your source deductions for income tax, so your new take-home pay reflects both the payment of spousal support and the deduction for tax purposes.

A recipient of support may also be subject to other tax consequences that aren't so obvious. One of the more common ways this can happen is if the payor is making the payments indirectly, through a company they own. For example, say that Bob, the owner of Bob's Brewery, writes his spousal support cheques on the company bank <span class="noglossary">account</span> of Bob's Brewery instead of from his personal chequing <span class="noglossary">account</span>. In a case like this, the recipient risks having the payor declare the money to have been paid as a corporate dividend or as salary as if the recipient were a shareholder or employee of the company.  

#the payor could simply pay the tax owing by the recipient when the recipient files their tax return.

When someone pays more support, the recipient must put the extra amount aside for tax time, or their bill to the Canada Revenue Agency will just be that much higher. Since it can be a bit difficult to figure out how much money the recipient will have to pay in taxes, you might want to talk to an accountant to get the number right.

When someone agrees to pay the taxes owing on account of the spousal support and the recipient has other sources of income, it can be very difficult to figure out exactly how much of the recipient's tax bill results from their receipt of spousal support. This is another good time to hire an accountant.

To claim these deductions, the lawyer must write a letter to the CRA setting out what portion of their fees were attributable to advancing a spousal support claim. If you intend to ask your lawyer for a letter like this, you must tell your lawyer as soon as possible, preferably the moment the lawyer takes your case. It may be impossible to winnow out the portions of an account spent on spousal support after the fact.

There is no limitation period to apply for continuation, but as a practical matter, the recipient would have to apply soon. Otherwise, they risk the estate being wound up and paid out.

If the support order already provided for support to continue past the death of the payor, their estate can apply to have the support reduced or ended.

If the recipient dies, obviously support ends. But what if there were arrears owing? Does the estate of the recipient get to collect them? The answer is not always clear. It seems to depend in part on whether the recipient had been actively pursuing them, or whether they had spent their own savings (estate) to make up the difference.