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Spousal Support Guidelines When Your Income is Above $350,000

By July 16, 2019 July 19th, 2019 No Comments

It’s almost a decade into the Spousal Support Advisory Guidelines (“SSAG”) era, we are coming to terms with the guidelines. Courts are using SSAG fairly routinely and thereby providing more predictability to parties although the suggested support ranges are not always met with enthusiasm by recipients or payors. SSAG have seen to raised average spousal support awards in some communities and lowered them in others. Anecdotally, SSAGs have increased marginal support awards where pre SSAG no support would likely have been agreed to or, possibly, even asked for. After initial doubt in Ontario, since the Court of Appeal decision in Fisher v. Fisher, courts have increasingly applied SSAG as a matter of course. The remaining areas of contention are the outlying situations highlighted by the devisors of SSAG in the initial statement of the proposal, such as variations and high income families. The latter is the subject of this paper. SSAG set broad income limits from nil to $350,000/year over which warnings are programmed to appear on the Divorcemate software. It is intriguing that years after the introduction of the Federal Child Support Guidelines which at first the bar believed to have a hard limit of $150,000 (that did not survive the first remarkable high income case, Francis v. Baker) that the SSAG drafters should have chosen to impose an income limit at all and that it should be at a higher level than child support. Following Francis v. Bakerand a cluster of high income cases a rough rule of thumb that no court would interfere with table child support for annual income at or under $1 million/year has settled into practice. Is there an equivalent order thumb for SSAG high income cases?

The Spousal Support Advisory Guidelines sets out the intentions of the drafters for high income spousal support cases. The drafters set a ceiling of $350,000 while emphasizing that “ceiling” is not meant to be a hard cap but rather a point at which the formula is capable of adjustment. In the words of the report: 

The shorthand term “ceiling” may be misleading. Under the Federal Child Support Guidelines, there is no absolute ceiling, just an income level above which the standard fixed-percentage-of-income formula can be varied, to generate a lesser percentage of income above that level. We propose a similar approach here.The ceiling is a gross annual payor income of $350,000. After the payor’s gross income reaches the ceiling of $350,000, the formulas should no longer be automatically applied to divide income beyond that threshold. But the $350,000 is not a “cap” either, as spousal support can and often will increase for income above that ceiling, on a case-by-case basis.

There is now a reasonably deep jurisprudence that has evolved across the country on SSAG making it possible to identify a direction.

1. $350,000 may be a “ceiling” but it’s not a hard cap. 

This may seem a clear point given that the drafters took pains to explain that ceiling did not mean “cap.” Courts have affirmed this on numerous occasions. In every case, the courts considered the SSAG figure and ordered a lower monthly amount.

2. Budgets matter

Budgets are still very important in high income spousal support cases.  In cases in which courts withdraw from the guidelines, whether child or spousal, the inability to justify the guideline amounts based on a realistic budget may result in a lower award. In K.R.M. v. F.B.M, Tindale J. ordered child support of $10,000/month and spousal support of $8000/month on an income of $895,898/year. This is much less than the child support table amount of $14,513/month and the SSAG range of $18,555 -$21,843/month. The support recipient, however,  stated she had direct child related expenses of only $4,420/month on her budget and the court found her personal expenses claimed to be excessive. Similarly in Maskobi v. Maskobi, McGee J.ordered spousal support of $12,500/month although the payor’s income of $955,000/year generated SSAG in the range of $18,500 -$24,193. The claimant had a “low” budget (“low” being a relative concept). Even so, the monthly support award go beyond the budget but McGee J. assumed that the support claimant would require funds to relocate and pay legal costs. Where a support claimant did prove“need” of $21,000/month in Jackson v. Boyle-Jackson, Festeryga J. ordered spousal support of $18,900 from within the SSAG ranges. In an appropriate case,  the SSAG ranges may be too low even in a high income family. In Loesch v. Walji, the British Columbia Court of Appeal affirmed a lower court decision imposing interim spousal support of $50,000/month where the SSAG ranges were “only” $30-35,000/month. The court had evidence of need and of the payor’s ability to pay in the greater amount. The appeal court marked this result as one of “pure discretion” in which the payor’s stated income appeared vastly less than his expenses and lifestyle would suggest.

3. The theoretical contest between “economic merger” and “transfer of capital” plays a role

After a long term marriage, the concept of “economic merger” or equalizing incomes may come into action. In Cork v. Cork, ̧ Warkentin J. commented that the objective of equalizing incomes after a long term marriage has less force in high-income cases. Nor is a long term marriage with children enough to support an SSAG award if there is no evidence led to a high lifestyle during the marriage or ongoing need. The higher the income, the higher the monthly awards generated by the SSAG calculation. Even after a long term marriage with children, the amounts may seem little more than a wealth shift.

4. Applying SSAG is more than running the numbers.

There are cases in which the courts simply apply the mid-range SSAG figure to incomes over the $350,000 ceiling. In Gibson v. Gibson, Quinlan J. ordered spousal support at the mid-range on the income of $696,838/year with the quantum of support to be recalculated each year along with child support in accordance with the payor’s income. This decision may be the exception that demonstrates the rule. In most of the reported high-income SSAG decisions the court considers the length of the marriage, lifestyle during the marriage and the budget of the applicant considers the SSAG ranges and then orders an amount that is somewhat less than those ranges.

Are courts applying SSAG to high-income cases? If by this question we really mean need counsel dono more than input the income and push enter on the support calculation software, then the answer is no. Yet SSAG is almost invariably referenced by the courts. The decisions that stand for the concept SSAG is of no use are far and few between. In the high-income cases, the SSAG calculations and concepts are almost invariably considered but are used a little more subtly, perhaps, than in the lower income ranges to provide a cross check to the quantum of support the court considers appropriate. Where budgets and lifestyle are carefully proven at a high level, the SSAG ranges provide reassurance to a court that a significant spousal support award is appropriate, albeit possibly in an amount somewhat short of the actual ranges.

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