An SSAG Primer

What Are The Spousal Support Advisory Guidelines and How Do They Apply To Divorcing Canadians?

On Thursday, January 27th, 2005, Professors Carol Rogerson and Rollie Thompson released their Spousal Support Project report titled: “Spousal Support Advisory Guidelines: A Draft Proposal”.  They’re asking for feedback and if you have any comment (plaudits or gripes) they’re reachable at Spousal Support Project, P.O. Box 2310, Station D, Ottawa, Ontario, K1P 5W5.   

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There’s a great Executive Summary and an Introduction which are well worth reading.  But if you don’t do anything else, take a look at the Table of Contents so you’ll know what specific questions they’ve dealt with.  

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This Commentary will deal with matters under these headings:

1. What are the SSAG?

2. Income Sharing as the Basic Structure

3. The Without Child Support Formula Approach

4. The With Child Support Formula Approach

5. Ceilings and Floors

6. Variation, Review, Remarriage, Second Families

7. Other Interesting Parts of the Report

1. What are the SSAG?

They’re 2 formulas (without child support and with child support) designed to produce a figure for spousal support in normal situations for support payors in situations where there is and where there isn’t child support.  The report goes into detail about the without child support formula in Chapter 5 and the with child support in Chapter 6.

They’re “advisory” – not legislated or mandatory.  This means the SSAG are set out for people to look at and decide to adopt or not as they may jointly wish.  Obviously the thinking is that once there’s a formula which is accepted as being reasonable unless there’s some reason for an exception, more and more people will just look at the formula.

The authors take pains to point out that they’re not suggesting something new of different from what we’re already doing in Canada, and they’re not replacing the existing legislation and case law, but that they’re trying to come up with a set of formulas that assist lawyers, judges, and clients in arriving at a fairly uniform result for spousal support without having to go through expensive litigation.  They recognize that this won’t work for everyone, but believe that it will work for lots of divorcing couples. 

Because this is a Federal initiative the suggestions really only apply to married people who are divorcing.  But it’s pretty obvious that once these advisory guidelines begin to be applied for married couples the same lawyer and judges will be looking to them for unmarried couples separating in the same situation.

Go through he report and look at the proposals carefully.  Then ask yourself how they’d apply to various closed cases in your office.  How different would the results be under the appropriate formula from the result negotiated between two lawyers or as determined by the court in any particular file?  And if there would be a difference, ask yourself which of the 2 results is more aligned with your sense of what’s right – as opposed to what was the best deal for your client?  There’s no suggestion in the report that parties can’t continue to proceed as we now do without the SSAG.  But there is the clear suggestion that using the SSAG will bring about greater uniformity of spousal support results, with the ability to reasonably predict the general end-result subject to certain limited adjustments.

2. Income Sharing as the Basic Structure

We’re done with budgets if we use the SSAG.  At least they won’t play a primary role any more because the key consideration will be how to share the income of the parties.  If you don’t like that as a basis approach you won’t like the SSAG.  But it simplifies matters.

Firstly it’s fundamental to realize that “income sharing” doesn’t mean “equal sharing”.  And secondly, it’s important to recognize, as does the report, that the formulas set out are intended to be starting points and that there will be scope for variations, exceptions, and adjustments so that the formula doesn’t become a straightjacket.

3. The Without Child Support Formula Approach

This formula embraces the “merger over time” principle which is that the longer the marriage lasts the economic and non-economic lives of the parties become more deeply merged with each spouse acting and making a variety of decisions based upon, or taking into consideration, the situation of the other spouse.  The authors state that the  “merger over time” concept captures both the compensatory and non-compensatory spousal support objectives set out in the Moge and Bracklow cases.

The Without Child Support Formula therefore is built around 2 key factors:
The difference in gross income of the parties, and
The length of the marriage.

The box set out below is how the report summarizes the formula which is intended as the starting point after which one looks at such things as where in the range any particular case fits, what restructuring should be considered (higher payments for a shorter period of time, lump sum adjustments, etc.) and what exceptions apply.  The formula is advisory only and should be the first step in dealing with the issue of spousal support if there isn’t child support being paid.

When you’re in a situation where the spousal support is being calculated where there aren’t any children, then you use the gross income of the parties and work with the gross income difference.  (1.5% - 2% of the gross income difference for each year of cohabitation up to 25 years.  The range of support remains fixed for marriages 25 years or longer at 37.5% - 50% of the income difference.  There are examples below.) 

This formula also sets out a calculation to fix the duration of the support.  (.5 – 1 times the number of years of marriage but indefinite for marriages of 20 years or longer, or if the marriage and age of the recipient at separation totals 65 of more.  There are examples below.)

However there report suggests that there would be factors affecting the precise amount or duration of the ranges of support produced by the formula.  These include such things as a strong compensatory claim, the recipient’s needs, property division, the needs and limited ability to pay on the part of the payor spouse, and self-sufficiency incentives.

And the report also sets out various methods of “restructuring” so that you can move around the amounts and duration of support to increase one and decrease the other.  Most lawyers do this one way or the other in drafting separation agreements but the report provides some actual examples to assist those who might not otherwise have thought of it.

And it also deals with various “exceptions” or “categories of departures” from the ranges for amounts and duration.  If looking within the suggested ranges doesn’t satisfy the particular case you’re dealing with and restructuring doesn’t lead to the “right” solution, then as a final step you’d want to see how the exceptions can assist in shaping a resolution.  The report sets out several “exceptions” but comments that they anticipate the ones they didn’t set out will create more discussion than those they did. 

4. The With Child Support Formula Approach

This formula recognizes the obvious fact that spousal support in a situation where there is child support being paid is different from where there isn’t any child support obligation.  Child support needs to be paid as a first priority, it isn’t tax deductible or includable, it isn’t a function of the length of the marriage, it needs to take into consideration that both parents – not just the support paying parent – are contributing to the cost of raising the children, it must recognize that most often there are forgone economic advantages resulting from the child raising activity within the marriage.  As well, this formula needs to deal in the after-tax disposable income of the family – not gross incomes.

The box set out below is how the report summarizes the formula which is intended as the starting point after which one looks at such things as where in the range any particular case fits, what restructuring and exceptions might apply.  When there are child support obligations the amount and nature of restructuring will be less relevant but because this report deals with the spousal support piece of the overall support obligations it might well be adjusted once the child support piece has been set because of the particular circumstances of the family.