The Spousal Support Advisory Guidelines: A New and Improved User's Guide to the Final Version
When determining duration, even if the relationship is under 20 years in length, indefinite support may be appropriate under the “rule of 65”. Duration under the without child support formula will be indefinite (duration not specified) even if the relationship is shorter than 20 years, if the length of the relationship in years plus the recipient's age at the date of separation equals or exceeds 65.
There is often no explicit reference to the “rule of 65” even when indefinite support is ordered (see Busse v. Gadd,  S.J. No. 438, 2009 SKQB 99; Robertson v. Williams,  O.J. No. 5451 (S.C.J.)). And in some cases a time limit is imposed when the “rule of 65” would have suggested indefinite support: see Hayes v. Hanrieder,  O.J No. 421 (S.C.J.).
- Not applicable to short marriages. Note that the “rule of 65” for indefinite (duration not specified) support is not applicable in short marriages (under 5 years).
- Age at the date of separation. Remember that the calculation under the “rule of 65” requires the recipient's age at the date of separation, not his or her age at the date of trial or application (for cases that made this error seeDomirti v. Domirti, 2009 BCSC 749 and Smith v. Smith,  B.C.J. No. 530, 2008 BCSC 363).
In one subset of cases under the without child support formula one or both parties may be retired. In some cases retirement has occurred prior to separation, while in other cases it will occur post-separation and may be the basis for an application for variation or review.
Spousal support cases involving retirement may raise complex issues of entitlement and income determination. As well, the circumstances of illness and low income that are often experienced by the elderly may require consideration of exceptions to the SSAG. For an excellent overview see Marie Gordon, “Back to Boston: Spousal Support After Retirement” C.F.L.Q. 125.
Particular issues to watch out for in retirement cases include:
- Material change:
If the payor's retirement and consequent drop in income is the basis for a variation application, there may be an issue of whether retirement constitutes a material change in circumstances. Thus early retirement may not count as a material change, unless for health reasons, and if it does, courts may impute additional income that can be earned; seeFrancis v. Logan,  BCSC 1028 and Gajdzik v. Gajdzik, 2008 BCSC 160. As well, there may be issues of whether the payor's retirement was “foreseen” or “foreseeable” in the sense of having been taken into account when the initial/agreement was made; see Templeton v. Templeton, 2005 ABCA, 14 R.F.L. (6th) 161 and Fishlock v. Fishlock(2007), 46 R.F.L. (6th) 254 (Ont.S.C.J.).
- Retirement incentives:
There may be an issue of whether any retirement incentive received in the year of retirement will be treated as income for that year. Typically the answer has been “no”: see Hurst v. Hurst,  O.J. No. 3800 (S.C.J.) and Gammon v. Gammon, 2008 CarswellOnt 6349 (S.C.J.).
- Boston and “double-dipping”:
The Advisory Guidelines do not change the law from Boston v. Boston,  2 S.C.R. 413, which governs “double-dipping” in respect of pension division and spousal support. That law can best be understood as relating to entitlement, entitlement to share in the already-divided portion of the payor's pension income. Under the Advisory Guidelines,Boston is recognized as the basis of an “exception” (FV 12.6.3), discussed below under “Exceptions”.
Boston articulates a general rule against “double-dipping”, i.e. that spousal support should not be paid out of pension income from a pension that has already been divided as part of the property division between the spouses. But Bostonthen goes on to recognize exceptions to the rule, exceptions which have been discussed at length in the appeal cases of Meiklejohn v. Meiklejohn,  O.J. No. 3911 (C.A.); Chamberlain v. Chamberlain, 2003 NBCA 34, 36 R.F.L. (5th) 241; and Cymbalisty v. Cymbalisty, 2003 MBCA 138, 44 R.F.L. (5th) 27. The most common exceptions to the rule against “double-dipping” are based upon hardship and need.
Boston applies in cases where there has not been an in specie or statutory division of the pension, but instead the recipient spouse has received other assets or a lump sum in lieu of the pension. To apply the Boston rule against double-dipping, a court needs evidence of the prior valuation and division of the pension, to determine which portion of the payor's current income has been divided. In some cases the divided portion will be quite small relative to the undivided portion of the payor's pension income and Boston will not have any impact: Leepart v Leepart, 2009 CarswellSask 54, 2009 SKQB 47.
Where a pension is divided at source when it is paid out, as is the case under British Columbia or Nova Scotia legislation, then the problems of Boston can usually be avoided, e.g. Trewern v. Trewern,  B.C.J. No. 343, 2009 BCSC 236. In these cases, both spouses simply include the pension payments in their income and the previously divided portions of the pension effectively cancel each other out.
The application of Boston within the context of the Advisory Guidelines raises complex issues. The Boston exception under the Advisory Guidelines recognizes that some adjustment may need to be made to the application of the SSAG to avoid “double-dipping”, but determining when and how that adjustment is to be made raises difficult issues, in part because of the “fuzziness” of Boston itself.
In two Ontario cases, courts have made a very formulaic adjustment to the Spousal Support Advisory Guidelines to avoid “double-dipping” that may not accurately reflect the Boston ruling. In each case, the court reduced the payor's income by the amount of the divided pension and then calculated the without child support formula range on the reduced payor income: Hurst v. Hurst,  O.J. No. 3800 (S.C.J.) and Gammon v. Gammon,  O.J. No. 4252, 2008 CarswellOnt 6349 (S.C.J.). In both of these cases, the previously-divided pension was a small part of the payor's total income, so the problems were not so obvious. As well, in Hurst this method of adjustment was dictated by the parties' agreement. In other cases, however, this formulaic adjustment of income may be too mechanical and rigid, and may lead to inappropriate results. It not only risks by-passing the analysis of the exceptions that are built into Boston, but may also lead to arbitrary results under the Advisory Guidelines.
To take a simple example, assume the spouses have been married for 20 years and the wife has an income from non-pension sources of $10,000 per year. The payor husband has retired with an annual income of $50,000, of which $30,000 represents the previously-divided pension. If the above Boston adjustment is used, then the SSAG range would be $250?$333/mo. Treating the payor as a person living on $20,000 a year, which is the “floor” for spousal support, could lead to an award at the low end of the range, or even to the elimination of spousal support. This would ignore the payor's base income of $30,000 upon which he can live.
In some recent SSAG cases, courts have taken the full income of the payor into account in calculating the range, relying upon the hardship and need exceptions to the “double-dipping” rule: see Scott v. Scott,  O.J. No. 5279 (S.C.J.). and Jenkins v. Jenkins,  M.J. No. 271, 2009 MBQB 189;
Another aspect of the Boston “double-dipping” rule is the requirement that the recipient spouse convert into income the assets received and “traded off” against the payor's pension in the property division.
In two recent cases, the payor spouse took early retirement and then argued that the recipient wife in her early ‘fifties should be required to access her share of the pension or have income imputed for SSAG purposes, but the courts rejected this “reverse Boston” argument: Szczerbaniwicz v. Szcerbaniewicz,  B.C.J. No. 562, 2010 BCSC 421; and Swales v. Swales,  A.J. No. 297, 2010 ABQB 187.
- Drawing on capital:
After retirement, income alone may not be an accurate indicator of either recipients' or payors' economic circumstances and they may be required to draw on capital for support purposes. This may require some imputation of notional income to determine support under the Advisory Guidelines.
- The “floor”:
Often incomes are low after retirement, so keep in mind that the SSAG floor is a payor income of $20,000, with the additional possibility of an exception to depart when the payor's income is between $20,000 - $30,000. See below under “Ceilings and Floors”.
- “Rule of 65”:
The “rule of 65” may be applicable to extend duration.
- Disability exception:
The disability exception may be relevant in cases involving older spouses and shorter marriages. See below under “Exceptions”.