Effect of High Income on Spousal Support

By July 11, 2019 October 21st, 2019 No Comments

Wondering how a recent divorce may impact your income? If you’re a high-income earner, your separation agreement may require you to pay out spousal support, or financial support to your spouse after a separation or divorce. Keep reading to learn more about how spousal support is determined and whether it’ll impact you.

What is spousal support?

While spousal support is a financial obligation under a legal contract, its real intention is to ensure that financial stability can be maintained among the parties undergoing separation and divorce. It can be a monthly support payment (like child support) or a lump sum payment if both parties agree. The latter is sometimes used in cases where no children are involved and both individuals seek closure. You can also pay or receive spousal support if you’re in a common law relationship – not just a marriage.

How is spousal support determined?

Spousal support is determined through a variety of factors. The difference in income between parties, the length of the marriage, the ability of the recipient to regain financial independent just to name a few. Fortunately and unfortunately, in Canada, spousal support amounts are highly individualized and discretionary. This means that you won’t have a set way of knowing exactly what you might pay out if you’re a high-income earner.

The Spousal Support Advisory Guidelines (SSAGs) does provide a formula that courts can use in ordering initial support amounts. The formula stops at $350,000, but courts can also opt to place additional support payments on the recommended payment for this income, so there is no true “cap” on spousal support. 

How can my high income be impacted by spousal support?

There’s no easy answer as to how your high income could be impacted by a separation or divorce. If you’re the high-income earner in your relationship, you could very well be subject to pay out spousal support unless your partner waives it. Your spousal support obligations will ultimately be determined by a variety of complex factors and your ruling court.

Here’s a full list of factors that the court can take into consideration:

  • Calculations according to the SSAG
  • Length of marriage or cohabitation
  • Difference in incomes
  • Whether the recipient has taken time off from work or school to provide care to the party paying spousal support or children in the union
  • Support payments allowing a former spouse to maintain their standard of living
  • Ability to regain financial independence
  • Post-separation increases to your (already high) income
  • Age of recipient, relative to how long they have been out of work
  • Ability of the party paying spousal support to provide support payments
  • The way household costs were paid
  • The best interest of children involved
  • Your former spouse attempting to redistribute your capital under the guise of support

Final thoughts

Looking for more on spousal support and other legal support related to divorce and separation? Tailor Law is dedicated to helping you resolve your family disputes during tense times. For all the help you need, visit here for more information or call us at 905-366-0202.

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