Spousal Support Lawyer in Calgary

What is spousal support?

Spousal support is support that is paid from one spouse to the other based upon the disparity in post-separation income between the parties.

Spousal support is essentially a two-part process. The first part of the process is determining entitlement to support. The second part is determining quantum once entitlement has been established.

Entitlement to Spousal Support

The first part of the test of spousal support is determining whether or not a former spouse is entitled to support. There are three different types of entitlement. They are compensatory entitlement, non-compensatory entitlement, and contractual entitlement.

Compensatory Spousal Support

The compensatory ground for spousal support is based upon the proposition that the party seeking support has endured economic disadvantage as a result of the separation. This is frequently brought up in cases where the division of domestic responsibilities was shared between the parties. Simply put, if the wife worked throughout the marriage and the husband stayed at home and assisted in raising the children, there could be a claim by the husband for “compensatory” spousal support on the basis that after the relationship ends, he is impacted economically due to the role he played during the marriage. It is a relatively low threshold for establishing compensatory spousal support when there is a high disparity in the parties’ incomes. More importantly, if one spouse was the traditional breadwinner in a relationship and the other spouse relied upon those circumstances, it may be relatively easy to establish an entitlement to spousal support. Therefore, even in situations where the spouse seeking spousal support may be self-sufficient, but there is still a significant economic fallout post-separation they are likely still entitled to spousal support.

Non-Compensatory Spousal Support

Non-compensatory spousal support entitlement is established when there is a need. Need is usually established by illness or disability. If following separation one spouse is ill or has a disability that prevents them from working, they may be entitled to spousal support based on a non-compensatory or needs based entitlement.

Contractual Entitlement

Contractual entitlement to spousal support is established when the parties had signed a domestic contract that provided that one spouse would pay to the other spousal support.

How do the Courts calculate Spousal Support?

Once entitlement to spousal support has been established the next step is to determine the amount of support. The Spousal Support Advisory Guidelines contemplate two scenarios for calculating support:

• Without child support formula.
• With child support formula.

Without Child Support

Spousal support calculated on a without child support basis is a relatively straightforward calculation. The calculation is done by taking the difference in the parties’ income and multiplying it by a spousal support percentage commensurate with their relationship details.

Once the calculation has been completed, there are then three different spousal support options to choose from:

• Low.
• Mid.
• High.

The difference in these three periodic support payments is as follows:

• High support equals 2% multiplied by the duration of the parties’ relationship multiplied by the disparity in income.
• Mid support equals 1.75% multiplied by the duration of the parties’ relationship multiplied by the disparity in the parties’ income.
• Low-end support is 1.5% multiplied by the duration of the parties’ relationship multiplied by the disparity in the parties’ income.

Example

After a marriage of 6 years and a cohabitation of 1 year Sally and Mike decide to separate. Sally earns $125,000.00 per year and Mike earns $35,000.00 per annum. The spousal support would be calculated as follows:

Duration of cohabitation and marriage: 7 years

Disparity in income: $90,000

Monthly Support:

High Spousal Support

2% X 7 X $90,000 = 12,600

Annual Spousal Support is $12,600 and Monthly Support is $1,050

Mid Spousal Support

1.75% X 7 X $90,000 = 11,025

Annual Spousal Support is $11,025 and Monthly Support is $918.75

Low Spousal Support

1.5% X 7 X $90,000 = $9,450

Annual Spousal Support is $9,450 and Monthly Support is $787.50

Regardless of the level of support, the Duration of support would be approximately 3-7 years.

Once the parties have this periodic support available to them, they can simply negotiate how much support they wish to pay. Most lawyers will negotiate spousal support somewhere around the mid-level; however, it is up to the parties to determine what type of support they want in their circumstance when putting together a Separation Agreement. Typically, when parties get independent legal advice one of the focal points that a family law lawyer will take you through is whether or not there is an under or over payment of spousal support.

With Child Support

The spousal support calculation for “with child support” is somewhat complicated and usually requires software to calculate. The reason it is complicated is the spousal support in this situation takes into account a number of factors including:

• The parties’ child support payment.
• The recipient’s costs of child care.
• Taxes and deductions that each parent receives.
• Credits and grants given by the government.
• The tax implications of a spousal support payment on both parties.

As a result, the calculation can be somewhat complicated; however, the output of any spousal support calculation with children still includes a low, mid and high percentage breakdown. The difference in the low, mid, and high percentage for a “with child support” calculation contemplates the recipient parent typically having approximately 40% to 46% of the “net disposable income” of the families’ total income.

Lump Sum Spousal Support

In some cases, spouses may opt for a one-time lump-sum payment instead of ongoing periodic spousal support. This arrangement can simplify financial obligations and provide both parties with a sense of closure.

The starting point for negotiating a lump-sum settlement typically involves calculating the net present value of the total periodic support payments that would otherwise be made over time. These calculations are an essential part of any spousal support assessment, including those generated through tools like Our Separation.

The amount of a lump-sum payment can vary significantly depending on several factors, such as the length of the marriage and the income disparity between the spouses. In long-term relationships or situations where one party earns substantially more than the other, these payments can be quite substantial.Spouses who choose a lump-sum settlement can agree on different methods of payment. While some opt for a direct cash transfer, others may fulfill the obligation by rolling over investment assets, such as stocks, bonds, or retirement funds. Each option carries its own financial and tax implications, making it essential to consult with a qualified spousal support lawyer to ensure a fair and legally sound agreement.