Compensatory Vs Non-Compensatory Spousal Support in BC

In the domain of family law, spousal support is nuanced in its application and varies widely across jurisdictions.

In British Columbia, there are two primary categories of spousal support: compensatory and non-compensatory. While the former aims to rectify financial imbalances caused by marital sacrifices, the latter is primarily concerned with the economic needs and means of the parties involved.

Let us unpack the intricacies of these two distinct yet interrelated forms of spousal support, and answer the intriguing questions that arise about their practical implications.

Key Takeaways

• Compensatory spousal support in BC compensates a spouse for sacrifices made during the marriage, often in long-term marriages.
• Non-compensatory spousal support is based on the recipient’s needs and the payor’s means, regardless of marriage length.
• Both compensatory and non-compensatory support are subject to the Spousal Support Advisory Guidelines.¹
• The types and amounts of spousal support awarded are influenced by factors such as the length of the cohabitation, roles during the relationship, and any existing support orders.

Considerations for Spousal Support

Understanding the key considerations for spousal support is important when working through the complexities of this financial provision, which is designed to balance economic disparities resulting from marriage or its dissolution. Foremost among these considerations is the length of the cohabitation. The length of the cohabitation can considerably impact the amount and duration of the spousal support order.

Additionally, the roles performed during the cohabitation are evaluated. The court ascertains if one spouse has made considerable sacrifices, such as career opportunities, for the welfare of the family. Such sacrifices can warrant compensatory support to rectify the economic disadvantages they now suffer.

Existing support-related orders or agreements also influence spousal support decisions. These may include pre-existing child support orders or marital contracts stipulating spousal support parameters, such as a pre-nuptial agreement.

Purpose and Origin of Compensatory Support

Building on the importance of spousal support considerations, examining the specific purpose and origin of compensatory support is pertinent. This type of support is designed to rectify economic disadvantages experienced by the lower-income spouse during and after the marriage. It acknowledges sacrifices made, particularly in relation to career and earning power, for the welfare and care of the family.

The origin of compensatory support can be traced back to a landmark Supreme Court decision, Moge v Moge, which solidified the concept in Canadian family law. This decision underscored the need to recognize and compensate for marriage-related sacrifices, alleviating economic hardship post-separation.²

Compensatory support is assessed based on the Spousal Support Advisory Guidelines (SSAG) and is often utilized when property division does not sufficiently address one spouse’s economic disadvantage upon the breakdown of the marriage. The purpose is not only to provide temporary relief but also to promote long-term financial independence. This approach ensures that the disadvantaged spouse is not unfairly burdened by the economic consequences of the marriage or its dissolution.

This type of support is designed to ‘compensate’ for the sacrifices one spouse made during the marriage, ensuring they do not now remain economically disadvantaged. However, the orders do not often extend indefinitely, as the court attempts to encourage the economically worse-off party to work toward financial independence.

What is Non-compensatory Support for?

Non-compensatory spousal support, often ordered in the context of shorter marriages, is primarily designed to assist a financially disadvantaged spouse based on their needs and on the paying spouse’s ability to provide support. This form of support is not automatic upon the dissolution of marriage; instead, it arises from a financial necessity which is tied to the means of the paying spouse.

For instance, if a spouse becomes disabled after marriage and requires increased support, the responsibility may be assigned to the other spouse, irrespective of the marriage duration. Such obligations are based on the principle that the ex-spouse should provide the necessary support, not the public or family.

Non-compensatory support is generally time-limited, with its duration and amount often guided by the Spousal Support Advisory Guidelines. Court discretion plays a significant role in deciding the appropriateness of applying the advisory guidelines. Increasingly, courts are adhering to the guideline calculations to determine support ranges.

This ‘needs-based’ support is complex and potentially high-stakes, with significant financial implications. It is rooted in the Divorce Act, which outlines the need to maintain marital and post-separation living standards. However, income disparity alone does not necessarily warrant non-compensatory support.

Types and Characteristics of Spousal Support

British Columbia has three primary types of spousal support – compensatory, non-compensatory, and contractual³ – each possessing distinct characteristics and objectives.

Compensatory spousal support is based on the economic losses or disadvantages one spouse has suffered due to the role they assumed during the marriage. For instance, if one spouse leaves their job to care for children, this type of support intends to compensate for their loss of income or career advancement opportunities.

Non-compensatory support, on the other hand, is needs-based. It is provided to maintain the standard of living achieved during the marriage. It is not necessarily related to the roles spouses played in the marriage, but is more focused on each party’s financial needs and means.

Contractual support is based on a pre-existing agreement between the spouses, such as a marriage or cohabitation agreement. This type of support respects the autonomy of parties to decide the terms of their separation, including the amount and duration of support.

Each type of spousal support aims to guarantee fairness and prevent financial hardship following separation or divorce.

Case Study: Laurain v Clarke

The case of Laurain v Clarke⁴ provides a practical illustration of compensatory spousal support in British Columbia. Here, Ms. Laurain was awarded compensatory support due to her substantial sacrifices during the marriage, primarily concerning her career and economic opportunities, in favour of family welfare.

This case demonstrates the application of the compensatory model in the following ways:

1. Recognition of Sacrifice: The court acknowledged Ms. Laurain’s contributions to the family, which limited her earning capacity and career growth.
2. Assessment of Benefit: It was determined that Mr. Clarke greatly benefited from Ms. Laurain’s sacrifices, as it allowed him to focus on his career.
3. Following the SSAG: The Spousal Support Advisory Guidelines were used to guide the court in coming up with a compensatory support amount within an appropriate range.
4. Outcome: Ms. Laurain was granted spousal support to compensate for the economic disadvantages she experienced due to the sacrifices she made during their marriage.

Determining Spousal Support Amounts

Establishing the appropriate amount for spousal support involves a complex evaluation of numerous factors, including the length of the marriage, the roles each spouse played, and the financial circumstances of both parties.⁵ The SSAGs provide a suggested range for support amounts based on these and other variables, such as the age of the spouses and the number of children involved.

The marital standard of living is another significant factor when determining the amount of spousal support. This refers to the lifestyle that the spouses were accustomed to during the marriage. The aim is to prevent a drastic decrease in living standards for the lower-income spouse after the dissolution of the marriage.

In addition, the court considers the ability of the paying spouse to contribute without suffering undue hardship. However, it’s important to note that the court is not obligated to ensure that the spouses maintain an equal standard of living post-separation. Instead, the focus is on fairness and the financial independence of both parties in the long term. Consequently, each spousal support case is unique, with individual factors significantly influencing the final support amount.

It is also important to remember that, in marriages that bore children, child support has primacy, which means that the any spousal support order will only be enforced after a child support order is fully met. As per the SSAGs, spousal support is designed to leave the recipient spouse with 40-46% of the spouses’ net incomes after child support has been taken out.

Case Law for Two Approaches to Spousal Support

Building on the understanding of how spousal support amounts are determined, we now turn our attention to the interpretation of these principles in real-life scenarios, as demonstrated in the case law for the two approaches to spousal support: compensatory and non-compensatory.

1. Compensatory Spousal Support: The landmark case of Moge v Moge set a precedent for compensatory spousal support. That case made clear that compensatory support aims to rectify economic imbalances arising from sacrifices made by one spouse for the welfare of the family. The case of Laurain v Clarke further illustrates this approach, where Ms. Laurain was awarded compensatory support within the Spousal Support Advisory Guidelines (SSAG) range.
2. Non-Compensatory Spousal Support: This approach is based on the recipient’s financial needs and the other spouse’s paying capacity. It often proves applicable in both short and long-term marriages.
3. Case Law Interpretation: The courts in BC apply these principles by considering the length of cohabitation, roles during the relationship, and the objectives of spousal support orders.
4. Legal Guidance: It is important to receive guidance from experienced family lawyers to provide insightful guidance on spousal support matters.

Frequently Asked Questions

How Can a Spouse Apply for Compensatory Spousal Support in BC?

To apply for compensatory spousal support in BC, a spouse must file an application in court detailing the sacrifices made during the marriage, such as career opportunities or contributions to the other’s career. Legal counsel is beneficial.

Can the Amount of Compensatory Spousal Support Be Modified Over Time?

Yes, the amount of compensatory spousal support can be modified over time. Changes in circumstances, such as income fluctuations, can lead to a revision of the support amount through a court order or agreement.

How Is the Duration of Compensatory Spousal Support Determined in BC?

In BC, the duration of compensatory spousal support is determined by factors such as the length of the marriage, the recipient’s ability to become self-sufficient, and the extent of the economic disadvantage caused by the marriage.

Are There Any Tax Implications for the Recipient or Payer of Compensatory Spousal Support?

There are tax implications for both parties involved in compensatory spousal support. The payer can deduct the support from their income, while the recipient must report it as taxable income on their tax return.

Can Compensatory Spousal Support Be Waived in a Prenuptial Agreement in BC?

Yes, compensatory spousal support can potentially be waived in a prenuptial agreement in BC. However, the court retains the discretion to override such agreements if it deems them unconscionable or unjust.

References

1. Rogerson & Thompson (2008), Spousal Support Advisory Guidelines ↩︎
2. Moge v Moge, (1992) 3 SCR 813 (CanLII)
   https://canlii.ca/t/1fs7v ↩︎
3. Bracklow v Bracklow, (1999) 1 SCR 420 (CanLII)
   https://canlii.ca/t/dlq ↩︎
4. Laurain v Clarke, (2013) ONSC 726 (CanLII)
   https://canlii.ca/t/fwrth ↩︎
5. Divorce Act, RSC 1985, c 3, s 15.2(4)
   https://laws-lois.justice.gc.ca/eng/acts/d-3.4/FullText.html
   ↩︎

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