Spousal support is the payment of money from one spouse to another after a separation or divorce. The purpose of such support is to financially compensate one party if they are financially disadvantaged by the relationship or if there is a significant disparity between the spouses’ incomes on separation. An obligation to pay spousal support can arise based on the following:
- Compensatory factors: When one spouse is disadvantaged by the relationship for example where he or she leaves the workforce to care for the children of the relationship and has lost opportunities to advance his or her career.
- Non-compensatory or needs based: Where one spouse earns significantly less than the other and requires assistance after separation to get back on his or her feet.
- Contractual basis: This can include situations where one spouse signs a cohabitation agreement agreeing to provide support to the other on the breakdown of the relationship, or where one spouse sponsors another’s immigration and agrees to be financially responsible for him or her.
Spousal support can be complex and depend on several factors. You should contact a lawyer if you believe you may be entitled to spousal support or that you may owe a spousal support obligation to your former spouse.
A common factor that may impact spousal support payments is the early retirement of the payor spouse., In MacDonald Hills v. Hills (2021), 55 R.F.L. (8th) 46 (Ont. S.C.J.), the husband brought a motion to terminate child and spousal support payments. The parties had three children who were all adults at the time of the motion. The parties had originally signed Minutes of Settlement in 2009 settling the issues of child support, spousal support and property. Pursuant to these Minutes, the husband had agreed to transfer his interest in the matrimonial home to the wife for a sum of $25,000.00 and an agreement by the wife to not seek any claim to the husband’s pension. The final order further provided that the husband’s pension income would not be included in any future determination of the husband’s income for support purposes.
The husband was employed as a registered nurse in the mental health department where he worked with patients that suffered from mental illness. His work was demanding and stressful such that it had a negative impact on his health. The husband’s doctor recommended that retire early and address his own mental and physical health issues. As a result, the husband advised the wife of his intention to retire when at 56 years old.
It was the husband’s position that on retirement his spousal support obligation should terminate. The in-contrast wife argued that she was incapable of working as a result of a stroke that caused her memory and word loss, along with rotator cuff and carpel tunnel issues.
Justice Sproat determined that the parties had discussed the husband’s earlier retirement with an unreduced pension during the marriage and the wife understood that this was a possibility when she signed the Minutes of Settlement in 2009. Justice Sproat stated in his decision:
- a) a person who meets the pension criteria for an unreduced pension is not taking an “early retirement”;
- b) 65 is no longer the presumptive retirement date. Many pension plans use retirement dates based on an 80 factor of years and service;
- c) the decision to retire when a person is entitled to an unreduced pension is a foreseeable event that should have been expected by the support recipient; and
- d) the fact the parties had discussed the payor’s intention to retire when qualified for a full pension is a relevant consideration.
Additionally, the husband had been paying spousal support for 14 years and the parties had been married for 14.5 years. Justice Sproat concluded that the husband should not be imputed an employment income and reduced support to $1.00 per month after a brief transition period.
Ultimately, the original Order providing that the husband’s pension would not be included in his income for future support calculations, along with the wife’s understanding during the marriage that early retirement by the husband was likely and the husband’s health concerns resulted in a decision to end support for the recipient, despite her continued health concerns and need.
If you are planning on retiring in the future and want to understand the impact this may have on any spousal support obligation you may have, you should speak to a lawyer and get the appropriate legal advice.