The Legislative Framework

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Divorce Act

Federal Legislation

Last Revised 1985

Also Provincial Legislation

Much overlap between federal and provincial/territorial support laws

The Legislative Framework – Divorce Act

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recognize any economic advantages or disadvantages to the spouses arising from the marriage or its breakdown;

The Legislative Framework – Divorce Act

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apportion between the spouses any financial consequences arising from the care of any child of the marriage over and above the obligation apportioned between the spouses pursuant to subsection (8) [i.e. through child support];

The Legislative Framework – Divorce Act

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relieve any economic hardship of the spouses arising from the break-down of the marriage; and

The Legislative Framework – Divorce Act

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in so far as practicable, promote the economic self-sufficiency of each spouse within a reasonable period of time.

The Legislative Framework – Divorce Act

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In making an order … the court shall take into consideration the condition, means, needs and other circumstances of each spouse including

The Legislative Framework – Divorce Act

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(a) the length of time the spouses cohabited;

(b) the functions performed by the spouse during cohabitation; and

(c) any order, agreement or arrangement relating to support of the spouse or child.

The Legislative Framework – Divorce Act

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In making an order [for spousal support or an interim order] the court shall not take into consideration any misconduct of a spouse in relation to the marriage.

Spousal Support Advisory Guidelines (SSAG)

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What are Spousal Support Advisory Guidelines (SSAG) ?

An academic paper

Released by the Federal Department of Justic

Draft 2005, Final 2008

A variety of mathematic formulas

To determine spousal support amounts

How long spousal support should be paid

The Advisory Guidelines are not law.

Spousal Support Advisory Guidelines (SSAG)

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Why have Spousal Support Advisory Guidelines ?

Generally, the uncertainty and unpredictability that pervaded the law of spousal support was undermining the legitimacy of the spousal support obligation.

The widely differing understandings of the nature of the spousal support obligation generated concerns about unfair outcomes at both ends of the spectrum.

In some cases awards were perceived as too low, in others as unjustifiably high

Core Concepts of SSAGs

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Income Sharing

Personal Budgets play a diminished role

Primarily based on incomes of both parties

Mathematical formula to determine the portion of spousal incomes to be shared.

Does not mean equal sharing.

SSAGs the Formulas

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Two basic formulas

1) Without child support formula

2) With child support formula

Both formulas use income sharing

Determining income is the Starting Point.

SSAGs - Without child support formula

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Relies heavily upon length of marriage

Including pre-marital cohabitation

Amount and duration increase with the length of the relationship

Concept of merger over time

Both compensatory & non-compensatory

Compensatory Support

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Redress the economic loss from:

Missed out on career opportunities,

Pasted up opportunity to earn an income,

Missed promotions, benefits, stock options, medical/dental coverage

Helped the spouse promote their career or business.

Loss from stay home parent or care giver

Sometimes a lump sum payment

Non - Compensatory Support

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Based on need.

Economic hardship

Significant decline in standard of living

Reflects the economic interdependency that develops as a result of a shared life,

Elements of reliance and expectation

SSAGs – With child support formula

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Concept of Parental Partnership Principle

Child support, priority over Spousal Support

Differential tax treatment of child and spousal support must be taken into account

After the SSAG Formulas Have Been Applied

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Still much room for flexibility to respond to the facts of particular cases

Amounts and durations within the ranges generated by the formulas

Ability to Restructure amount vs duration

After the SSAG Formulas Have Been Applied

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Using the SSAG Ranges

Precise amount or duration within the SSAG ranges will be driven by the factors on the handouts.

After the SSAG Formulas Have Been Applied

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Restructuring

Restructuring can be used in three ways:

1) to front-end load support by increasing the amount beyond the formulas’ ranges and shortening duration;

2) to extend duration beyond the formulas’ ranges by lowering the monthly amount; and

3) to formulate a lump sum payment by combining amount and duration

Applying Spousal Support Advisory Guidelines

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Income - The Starting Point

Two incomes are in issue, Payor & Recipient

Accurate determination of spousal incomes is critical to the proper application of the SSAGs

Income may need to be imputed to a payor spouse, but in addition a spousal support case may also require that an income be imputed to the recipient spouse, because of self-sufficiency issues.

Applying Spousal Support Advisory Guidelines

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Income continued….

Adjustments to Income for: Untaxed or Non-Taxable income

The Child Tax Benefit

Canadian Child Tax Benefit

National Child Benefit Supplement

The GST-HST credit

Child Disability Benefit

Universal Child Care Benefit

Various provincial benefit and credit schemes

Refundable medical expense credit

Applying Spousal Support Advisory Guidelines

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Income…is income from all sources

Pattern of Income: the court may have regard to the spouse’s income over the last three

years and determine an amount that is fair and reasonable in light of any pattern of income.

Self - Sufficiency

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Even in long traditional marriages, self-sufficiency remains a consideration

Real encouragement for self-sufficiency is not found in:

Spousal support law

Advisory Guidelines

But in the harsh economic reality facing most separated or divorced spouses.

Recipient must find more income in order to avoid a drop in her or his standard of living

Spousal support is limited by the payor’s ability to pay

Self – Sufficiency & Imputing Income

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Imputing Income what is it ?

Imputing income simply means that the court treats the payor or recipient's spouse’s income as if it is more than what the spouse is

actually earning.

Why Impute Income: A spouse is unemployed, underemployed or earning less than what

he or she was previously earning to affect an increase or decrease in support payments

Recipient spouse who has failed to maximize earning capacity.

Courts believe, imputing income provides a ready means of assessing

and encouraging self-sufficiency.

Steps Taken to arrive at Support Amount

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1) Establish Income & Means

2) Run SSAG Report in DivorceMate to establish range of spousal support

3) Review SSAG Considerations in to establish where within the range support should be.

4) Develop Lifestyle Analysis to address effects on Lifestyle.

5) Run CDFA projections if required

6) Mediate final amount

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Mediation Services

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