Barrie Hayes, Partner
In my previous blog I described the formulaic calculation used by the Spousal Support Advisory Guidelines (“ SSAG”) to determine spousal support in circumstances where the parties had no children.
In this article I will focus on the SSAG formulaic calculation to determine spousal support in circumstances where the parties have dependent children.
The formula utilized by the SSAG in the circumstances is called the ‘with child’ support formula. The ‘with child’ support formula has different considerations from the ‘without child’ support formula in that priority at law is given to fixing child-support first and there are particular tax and other financial benefit issues that relate to the children. The approach to spousal support differs in that where there are dependent children the primary rationale for the entitlement for spousal support is compensatory. In fixing spousal support based on compensatory principles the focus is not on the length of the marriage, or financial interdependency but rather the presence of dependent children in the family unit and the need to provide for the material needs for those children.
The three main differences between the two formulaic support calculations are as follows;
- The ‘with child’ support formula uses the net incomes of the spouses, not their gross incomes;
- The ‘with child’ support formula divides the pool of combined net incomes between the two spouses, not the gross income difference;
- The upper and lower percentage limits of net income division in the ‘with child’ support formula do not vary with the length of the marriage of the spouses.
Basic to the ‘with child’ support formula is the concept of individual net disposable income (“ INDI”) of each spouse. Individual net disposable income isolates an amount of net disposable income available after adjustment for each of the spouses child-support obligation. This is done by deducting the spouses respective contributions to child-support.
Determining the payor spouse’s INDI involves establishing guidelines income minus child-support minus taxes and deductions.
Determining the support recipient spouse’s INDI involves establishing guidelines income minus notional child-support minus taxes and deductions plus government benefits and credits.
The INDIs for the spouses are then added together and a range of spousal support amount projections which would leave the lower income recipient spouse with between 40 and 46% of the combined INDI is utilized.
Needless to say the calculation of the spouses’ INDI requires computer software assistance.
Initial orders for support are indefinite in duration subject to the usual process of reviewing variation. The formula does, however, provide a durational range which is intended to structure the process for reviewing variation and to limit the cumulative duration of spousal support. There are two tests for duration and whichever produces the longer duration at each end of the range is to be employed.
The first is the length of marriage test which is modeled on the duration under the without child support formula i.e. one half to one year of support for every year of marriage
The second is the age of children test. The lower end of the durational range is until the youngest child starts full-time school. The upper end of the durational range is until the last or youngest child finishes high school.