The Spousal Support Advisory Guidelines (“SSAG”) era is coming to terms with the guidelines. SSAG have seen to raised average spousal support awards in some communities and lowered them in others. The remaining areas of contention are the outlying situations such as variations and high income families.
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. The inability to justify the guideline amounts based on a realistic budget may result in a lower award. In an appropriate case, the SSAG ranges may be too low even in a high income family.
McGee J. ordered spousal support of $12,500/month but the payor’s income of $955,000/year generated SSAG in the range of $18,500 -$24,193. Even so, the support claimant would require funds to relocate and pay legal costs.
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. To be eligible for an SSAG award, there must be evidence of a high lifestyle during the marriage or an 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 high-income SSAG decisions, the court orders an amount that is somewhat less than the SSAG ranges.
Are courts applying SSAG to high-income cases? No, you do not need any more input than the income to calculate support payments. 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 high-income cases, the calculation of support is considered but done subtly to ensure an appropriate quantum of support. The SSAG ranges provide reassurance to a court that a significant spousal support award is appropriate.
If you have any additional questions or if you would like to discuss your matter with us further, feel free to call our Mississauga family law lawyers at 905-366-0202 to arrange a free consultation. Alternatively, you can reach us via our website here.
