Effect of High Income on Spousal Support

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. 

What is spousal support?

The goal of spousal support is to maintain financial stability among those going through a separation or divorce. It can be a monthly support payment (like child support) or a lump sum payment if both parties agree. Divorce can be used to legally end a marriage when there are no children involved. You can also pay or receive spousal support if you’re in a common law relationship – not just a marriage.

What factors go into determining spousal support?

A number of factors go into determining spousal support. 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. In Canada, the amount of spousal support a person receives is 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 will spousal support affect my high income?

There’s no simple answer to how a divorce or separation might affect your high income. 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. 

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
  • Finally, 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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