What is Spousal Support?
Spousal support (sometimes referred to as alimony) is money paid from one spouse to the other after they separate or divorce.
In Ontario, the law views spousal relationships as an economic partnership. When couples separate or divorce, if one spouse has a higher income then the other, they may be ordered to financially support the other after separation.
Spousal support can be ordered in situations where couples were married, living together as a couple for at least 3 years, or were in a relationship and had a child together.
Spousal Support is not an automatic right, and the spouse who is claiming spousal support must prove they are entitled to receive it.
What is the purpose of spousal support?
Spousal Support is intended to help a spouse become financially independent
help share the financial costs of raising the children
Prevent a spouse from experiencing financial hardship after the breakdown of a relationship
Compensate one spouse for being financially disadvantaged during the relationship (For example, if one spouse gave up their career to stay home and care for the children)
Factors that are considered in determining if spousal support should be awarded and for how long:
Length of relationship- This includes time living together before the marriage
Financial circumstance of each spouse- During the relationship and after separation
The roles performed by each spouse during the relationship
The financial repercussions of one or both spouses in caring for each other or any children of the relationship
The ability for each spouse to support themselves
The age of each spouse
The income of each spouse
The physical and mental wellness of each spouse
Available employment opportunities and ability of one spouse to re-enter the workforce
The couple’s standard of living before the separation
How is Spousal Support calculated in Ontario?
Once eligibility is determined, the amount of spousal support that should be paid can be complicated to calculate. Unlike child support, there is not a set guideline amount.
The Spousal Support Advisory Guidelines (SSAG’s) are a helpful tool that are often used by lawyers, judges, and mediators to determine a range of appropriate amount and duration.
The amount is based on a formula that considers the ages, incomes, length of relationship, and whether the parties have children. The guidelines calculate a low, middle, and high range of spousal support amounts, as well as a range for length of time that spousal support should be paid. The SSAG’s also show the tax implications for both parties if spousal support is paid.
The SSAG’s are not legally binding and should only be used as a guide.
Spousal Support and Income Taxes
In most situations, Spousal Support is taxable as income for the support recipient and a deduction from the income of the support payor. This means that the person who is receiving spousal support must declare it as income on their taxes, and the spouse who is paying it can deduct it off their income.
For income tax purposes, spousal support must be written into a separation agreement or court order, which must include the date of separation, the terms and amount of spousal support, and the commencement date for the support payments.
Typically, lump sum spousal support, informal spousal support and indirect spousal support payments are not considered spousal support for tax purposes.
The discussion around spousal support is often one of the most difficult, unpleasant, and contentious. As mentioned above, the basis for determining entitlement and calculating spousal support is complex and nuanced. Working with an experienced family mediator who has extensive family law training in divorce finances can help you to reach a fair and equitable settlement.