Spousal Support Basics for High Income Earners
As mentioned last week, in this first month of 2022 we will be focusing on issues that arise in divorce between affluent couples. We will start with the “rules” and principles relating to spousal support for high-income-earning spouses, specifically those who earn over $350,000 per year.
As a general starting-point: The higher the support-payor’s income, the higher the spousal support that must be paid. But for those who earn over this $350,000 threshold, there is special guidance found in the federal government-endorsed Spousal Support Advisory Guidelines (SSAGs), which guide the Family Courts in these scenarios. (Those SSAGs prescribe graduated support amounts according to various factors, which include the incomes – at all levels – of each of the now-former spouses.)
Since the SSAGs are inherently advisory in nature, the courts are free to deviate from the suggested amounts where the circumstances warrant. However, for situations involving high income-earners in particular, there have been a series of rulings from across Canada that help guide the courts even further in setting the proper support amount. Here is a summary of those rules:
- For those earning over $350,000, the SSAGs do not apply presumptively or automatically. Instead, the SSAGs are merely a starting point for setting the range of support, and is a springboard for the court’s application of an individualized, fact-specific analysis.
- Once a payor earns $350,000, this does not mean the court will cast aside the SSAG suggestions; those guidelines can still be used for incomes over that threshold.
- The $350,000 ceiling is merely a starting-point for calculating support – it is neither an absolute “ceiling”, nor a hard “cap”. Spousal support usually increases when the payor’s income rises above that amount.
- For those who are close to earning $350,000, the courts can still rely on the suggested range of SSAG amounts. For those who earn very far above it (e. millions per year), the support obligations do not necessarily rise commensurately.
In setting the range, the courts can apply one of two approaches:
- The “minimum plus” approach: The SSAGs point to an initial, minimum support amount at the $350,000 income level (taking into account all of the usual factors). Then, the court uses its discretion to top-up that initial amount.
- The “pure discretion” approach: There is no initial minimum; instead the court solely applies a discretionary approach after looking at all the usual support-calculation factors.
As with any kind of ruling by a trial judge on spousal support, it will be afforded deference by a later appeal court that is asked to review it. This is even more true in cases involving support payors who earn over $350,000, since the SSAGs themselves suggest “pure discretion” by the judge as one of the possible approaches to setting the right amount.
What should be clear from these “rules” is that – perhaps ironically – they are somewhat flexible. This was emphasized very recently by the Ontario court in a high-income case called Hourtovenko v. Hourtovenko, where the court said:
At the end of the day, the court has an overriding discretion in deciding whether an award of spousal support is appropriate and, if so, in what amount. The exercise of such discretion will depend on the particular facts of each case, having regard to the factors and objectives established in the governing legislation.
For a copy of the Spousal Support Advisory Guidelines, see: Spousal Support Advisory Guidelines (Department of Justice, Canada).
For the full text of some of the pertinent decisions that contain a summary of the Canadian law, see:
- Hourtovenko v. Hourtovenko, 2021 ONSC 7377
- Potzus v. Potzus, 2017 SKCA 15
- Berta v. Berta, 2017 ONCA 874
- E.H. v. P.L.H., 2014 BCCA 310, leave to appeal to SCC refused  S.C.C.A. No. 412
See our previous introductory coverage of this topic here: https://familyllb.com/2020/03/03/earn-over-350000-a-year-heres-what-you-need-to-know-about-spousal-support/