Paying and Receiving Spousal Support in Alberta
Spousal support refers to the money paid from one spouse to another when they divorce. This generally occurs when there is a large difference in income between the parties, but is not guaranteed. Meaning, the lower income earner is not always entitled to receive spousal support. When determining support the Judge will take into consideration the current financial position of each party. In the event spousal support is ordered, our skilled team of Calgary divorce lawyers provide insight into different payment options.
This refers to a set monthly amount, indefinite, subject to review and variation as circumstance change. No set end date.
With this method, your lawyer will use an income-based percentage formula which will be adjusted annually. This will take into account changes in income, for example major increases or decreases in salary. This formula may be indefinite on a fixed term. Additionally, this formula is usually based on percentage difference between gross annual income adjusted for child support payable, if any.
Fixed Term, Fixed Amount
For this option, a client will received $X monthly for Y months until the agreement is terminated or reviewed.
This indicates a one time lump sum payment in exchange for a waiver of any future support. This option can also be combined with monthly payments, usually to reduce the monthly amount. Lump sum support is paid in after-tax dollars. As such, the amount of the lump sum takes into account the tax that would be saved/ paid if the support were paid on a monthly basis.
Reservation of Spousal Support
This means that no support is currently payable, but may be open to future review at a predetermined set-date, or when circumstances change.
Waiving of Support
It is possible that one, or both, parties will opt to waive their entitlements to support.
There are, of course, pros and cons to each option. Locking-in (per option 3 or 4 above) has the advantage of certainty and finality but the disadvantage that it may operate unfairly in the event someone’s income (or expenses) change significantly. Lump sum offers the cleanest break approach, as it severs the tie to the other party moving forward. Variable support is likely the fairest way to approach support in that the amount will change as circumstances change. However, it has the disadvantage of people being forced to address support again in the future and incur the stress and legal fees associated with that.
If you are considering separation or divorce, our team of Calgary divorce lawyers can help. Connect with us to set up an initial consultation today.