Spousal Support Guidelines For Incomes Above $350,000

For those separated and divorcing spouses who are liable for support and earn a gross annual income above $350,000, the Spousal Support Advisory Guidelines (SSAGs) have a special set of rules that apply. (And of course these are in addition to the usual “with child”/”without child” variables that are a fundamental aspect of the SSAGs, as well as the usual means, needs and ability-to-pay factors that are an inherent part of any support determination under Canadian family law).

Here are some of the key conceptual points to know in situations involving these high-income-earning support payor:

• Although they are merely advisory in any case, the SSAGs do not apply when the paying spouse’s annual income exceeds $350,000 (Myers v. Vickar, 2012 ONSC 5004 (Ont. S.C.J.)).
• Rather, the SSAGs can be a starting-point or “comparative tool” for determining a range of spousal support that should be paid in respect of the income above that benchmark, although as always the spouses’ individual circumstances must be considered (Denofrio v. Denofrio (2009), 72 R.F.L. (6th) 52 (Ont. S.C.J.); Berta v. Berta, 2011 ONSC 42 (Ont. S.C.J.); Milton v. Milton, 2008 NBCA 87, 2008 CarswellNB 591).
• If the SSAGs are to be applied by the court, they can be used either prospectively or retrospectively (Hartshorne v. Hartshorne, 2009 BCSC 698, 2009 CarswellBC 1398; reversed 2010 CarswellBC 1618, 2010 BCCA 327; additional reasons at 2011 BCCA 29 (B.C. C.A.)).
• With that said, even when the SSAGs are used as a starting-point, they are not meant to impose any sort of cap on the amount of spousal support that is payable by a spouse earning $350,000 or more (SSAGs, s. 11.3; Elgner v. Elgner, 2010 ONSC 1578 (Ont. Div. Ct.)).
• Nor is it an error in law if the court decides not to consider deviating from what would otherwise be the SSAG-recommended amount ((J.E.) v. H. (P.L.), 2014 CarswellBC 2259, 2014 BCCA 310 (B.C. C.A.)).
• Instead, the judge’s decision whether or not to follow the SSAGs formula is a matter of pure discretion ((J.E.) v. H. (P.L.), 2014 CarswellBC 2259, 2014 BCCA 310 (B.C. C.A.)); the recommended amounts can be used as a guide, but their application as a method for determining how to divide income over the $350,000 mark is not automatic (Cork v. Cork, 2014 CarswellOnt 5516, 2014 ONSC 2488 (Ont. S.C.J.)).

Next, and despite the well-recognized discretion by courts in this area, there are nonetheless two acknowledged judicial approaches to determining the support obligations of payors earning more than $350,000:   1) the “minimum plus” approach, which involves using the SSAGs to determine a minimum amount, with the court topping up as it sees fit in the circumstances; and 2) a “pure discretion” approach, where there is no minimum but merely a dollar amount that takes into account the (often very high) actual child support that is being paid, plus the usual factors including means, needs, and ability to pay (Loesch v. Walji, 2008 BCCA 214, 2008 CarswellBC 982).  Either way, the court may exercise its discretion using the Divorce Act objectives as a guide (M. (S.R.) v. M. (N.G.T.), 2014 CarswellBC 697, 2014 BCSC 442 (B.C. S.C.).

With that conceptual background in place, the manner in which the SSAGs nonetheless influence courts’ spousal support awards is difficult to summarize in a practical sense.  (And it’s worth noting that in one case called Bell v. Bell (2009), 2009 BCCA 280, 2009 CarswellBC 1588, both trial and appeal level courts determined that the SSAGs were not even “useful” in light of the husband’s $650,000 annual income).

A survey of some fairly recent cases reveals that when the payor spouse’s income is close to the $350,000 mark, courts seem somewhat more likely to make an award that is closer to the SSAGs-recommended amount (see for example Marzara v. Marzara (2011), 2011 CarswellBC 742, 2011 BCSC 408 (B.C. S.C.), where the low end of support was ordered given the circumstances and the husband’s $375,000 income; see also Abelson v. Mitra, 2008 BCSC 1197, 2008 CarswellBC 1873, [2008] B.C.J. No. 1672, 59 R.F.L. (6th) 364 (B.C. S.C.).

Conversely, the further from the $350,000 income figure, the less influential the SSAGs appear to be in the courts’ determinations; there seems a willingness to abandon the SSAGs-suggested amounts entirely in favour of an award that – while still proportionate – is better tailored to the individual circumstance but can be on either high or low end of the range.  For example, in Denofrio v. Denofrio (2009), 72 R.F.L. (6th) 52 (Ont. S.C.J.), the husband earned $4.1 million per year and was ordered to pay $15,000 tax-free in monthly interim support, despite the wife’s request for $150,000 per month.   Contrast that to McCain v. McCain, 2012 ONSC 7344, 2012 CarswellOnt 16853 (Ont. S.C.J.), where the husband earned more than $9 million annually, and despite their long-term traditional marriage, the wife was ordered to receive $175,000 in temporary monthly support which was still an amount below the SSAGs range.   Similarly in Elgner v. Elgner, 2010 ONSC 1578 (Ont. Div. Ct.) the husband earned between $2.8 and $3.9 million a year, and was ordered to pay to his wife of 33 years $100,000 per month, which was on the low end of the formula amount as well.

Frankly  — as with all spousal support decisions – the exceptionally high-income-earner cases go in many different directions.  And even discounting the fact that they are relatively few and far between, it may be too early to declare that there is a discernible trend to them.   The courts have been deliberately instilled with considerable discretion, so the path of future cases will continue to develop incrementally, on a case-by-case, decision-by-decision basis.