Understanding Income Considerations for Spousal Support Calculations
Key income situations to consider
When navigating spousal support arrangements, there are a few income situations with spousal support that you want to be aware of.
How pensions are treated in Family law
In Family Law, pensions are treated as property to be valued and equalized between spouses. This aspect will be covered in greater detail when discussing property distribution. However, pensions also generate income once they begin paying out.
Avoiding double dipping with pension assets
If you have a pension that's being divided as part of your Separation Agreement, you need to be careful when including pension income in your Spousal Support calculation. This is known as "double dipping" and should be avoided since you will have already divided a portion of your pension as an asset – the part that accrued during your relationship.
When calculating your income, you'll need to remove the proportion of the monthly pension amount that accrued during the relationship and was already divided as an asset. It's always advisable to consult with a lawyer in order to fully understand how the Spousal Support Advisory Guidelines might apply to a pension.
Other asset income considerations
A similar circumstance can arise if you have already divided other types of assets, such as investments, as part of your property distribution and then count the income from those already divided assets back into income for Spousal Support purposes.
Income ceilings and floors in Spousal Support
High-Income thresholds
When considering your income for Spousal Support purposes, be aware that there are established ceilings and floors. The Spousal Support Advisory Guidelines contain a provision stating that where a payer earns more than $350,000, the guidelines shouldn't automatically apply the amounts exceeding $350,000 as income when calculating Spousal Support.
There’s a lot of discretion that can be applied when examining higher incomes, particularly regarding amounts that exceed the $350,000 threshold.
Flexibility in high-income situations
For your agreement purposes, this means there's flexibility and room to negotiate around higher incomes. When dealing with high income situations, you'll be considering the needs, means, and circumstances of each spouse, as well as the standard of living that was maintained during the relationship.
Low-Income Floor
There's also a similar income floor of $20,000, where those who earn less than this amount shouldn't be required to pay Spousal Support.
Different Calculation Formulas
The Spousal Support Advisory Guidelines employ different formulas depending on whether you have children or not. It will use a different calculation to provide a range for the amount of Spousal Support and the range for how long Spousal Support should be paid. The calculations take into account not only whether or not you have children but also your ages, the length of your relationship, and other relevant circumstances that may impact the Spousal Support arrangement.
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Important Disclaimer
Content and videos in The Divii Knowledge Centre provide general information about separation and divorce and is not and should not be considered legal advice. For guidance specific to your situation, it's important to consult with a qualified family lawyer in your area. It's always highly recommended to seek independent legal advice during your separation.
