HIGH INCOME AND SPOUSAL SUPPORT

If you are diligent and fortunate enough to earn a very high income, then the question of how much spousal support you may have to pay your spouse on separation or divorce will be of key concern to you (assuming you have not addressed this issue by way of a separation agreement or other marital contract).

Leaving aside the related question of how your family assets may have to be divided, the question you may ask yourself is this:

Should I have to pay unusuallyhigh levels of spousal support merely because I can afford to pay?

Canadian courts have repeatedly stated that the task of setting spousal support amounts is highly fact-based, individualized, and discretionary. Fortunately, there is some level of guidance in the form of the Spousal Support Advisory Guidelines (SSAGs) which – while not technically legislation that must be followed – provides a court with a “formula” for setting initial support amounts (once your spouse’s entitlement to some support has otherwise been confirmed).

Technically, the SSAGs apply to both average and high-income earners, and are designed to advise courts (and lawyers and their clients, for that matter) on a reasonable range and duration of spousal support in various circumstances. They do include a “ceiling” at the $350,000 income level – meaning the formula stops at that figure – but there is no hard “cap” on the amount of support that can be ordered in high income cases.

For example, if you earn more than $350,000 per year the court may still order you to pay additional support above the formula amount, calculated by way of percentage increase, and after taking into account your budget, assets, and other income, as well as your spouse’s level of need. This adds to the list of factors at play in any given scenario.

On this point, the fact that the SSAGs are not mandatory means that they still leave substantial room for a court to consider all of the usual legislated factors, such as need and ability to pay as mandated by the federal Divorce Act, together with a host of other more esoteric considerations such as whether:

* the support amounts will allow your former spouse to maintain the standard of living to which he or she was accustomed;

* any post-separation increases in your (already high) income should be taken into account in setting spousal support levels for the first time; and

* your spouse’s request for support is actually an improper attempt to redistribute your capital in the guise of support.

The bottom line is this: if you are a high income earner, then your spousal support obligations will be governed by particularly complex considerations, and getting good legal advice is essential because there is a lot at stake.