Our highly regarded Vancouver Income Increase Support Lawyers deal with hundreds of medium to high net worth financial disputes when parties in BC and Calgary divorce or separate. Today, we tackle the thorny issue of post-separation increase in income where spousal support is involved. Our firm is Vancouver’s Top Choice Awards winner once again for 2016 as Vancouver’s Best Family Law Firm* and we have family law offices in Vancouver, Calgary, Surrey, Richmond, Kelowna and Fort St John BC. Call us toll free at 1-877-602-9900.
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If you’re paying spousal support and your income increases post-separation, is your former spouse entitled to a share of the increase?
Vancouver Income Increase Support Lawyers
BC spousal support cases involving a post-separation increase in the payor’s income raise entitlement issues –that is, whether there is a compensatory or non-compensatory basis for the payee to share in the post-separation increase.
Our Vancouver Income Increase Support Lawyers note the case law suggests that to share in post-separation increases in payor income, the recipient must demonstrate that he or she contributed to the payor’s post-separation income increase. Our top rated* Vancouver Income Increase Support Lawyers also know that the basis for the spousal support claim is important. Specifically, where the claim for spousal support is largely non-compensatory, which is based on the standard of living during the marriage, the courts have generally not used the increase as a basis for increased support. For example, in Kelly v. Kelly, 2007 BCSC 227, where the entitlement to support was based on need (marital standard of living), the post-separation increases to the payor’s income were not used as a basis for ongoing spousal support.
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Vancouver Income Increase Support Lawyers Know Courts Focus On Basis For Support
Where the spousal support claim is largely compensatory and, for example, the recipient made sacrifices for the sake of the family and the payor benefited from these sacrifices (i.e., in the form of the ability to develop his or her career during the relationship leading to higher earnings following separation), the court may be more likely to consider post-separation income increases of the payor as relevant to quantum of spousal support. The reasoning is that the parties made a joint investment in the payor’s career, so it would be unfair for him or her alone to reap the benefits: see Hartshorne v. Hartshorne, supra at para 117. See also Hausmann v. Klukas, 2011 BCSC 1753, where the court held that the recipient wife’s assumption of childcare duties, before and after separation, had allowed the payor husband to establish and grow his business.
The length of the marriage, the recipient’s age at separation (which is related to his or her ability become self-sufficient), the strength of the compensatory claim and the nature of the recipient’s contributions appear to be the major factors which militate either for or against an entitlement to share in the increased income.
Vancouver Income Increase Support Lawyers List Factors Considered
In Judd v. Judd 2010 BCSC 153 at para 22, the court cited the reference made by the court in Hartshorne v. Hartshorne to the Spousal Support Advisory Guideline at c. 14.3 regarding the factors relevant to determining whether post-separation increases in income should be considered:
Some rough notion of causation is applied to post separation income increases for the payor, in determining both whether the income increase should be reflected in increased spousal support and, if it should by how much. It all depends on the length of the marriage, the roles adopted during the marriage, the time elapsed between the date of separation and the subsequent income increase, and the reason for the income increase (e.g. new job vs. promotion within same employer, or career continuation vs. new venture). The extent of sharing of these post-separation increases involves a complex, fact-based decision.
Career Sacrifice Matters Say Vancouver Income Increase Support Lawyers
In Pendleton v. Pendleton 2010 BCSC 1167, the court determined that there was sufficient connection between the recipient’s contribution to the marriage and the payor’s post-separation pay increase. The recipient had contributed towards husband’s tuition and provided support during period that the husband was upgrading skills. Furthermore, the recipient had sacrificed her career to support moves that allowed the payor to pursue his career.
In Beninger v. Beninger, 2007 BCCA 619 the recipient was entitled to a share in the post-separation increase in the payor’s income. This was because the payor’s increase in income giving rise to the variation application was directly related to the career he embarked on as a result of the education he obtained, in part, during the marriage, and the years of working during the marriage during which he developed his skills. He did so with the benefit the recipient as a full-time homemaker who had given up her own career to fulfill that role.
The court in Hartshorne v. Hartshorne, supra at para 111 described some situations when a post-separation increase in the payor’s income may not be as relevant to an increase in post-separation support:
Change In Careers May Mean No Sharing Of Increase
The cases where post-separation increases in the payor’s income are not considered, or are only partially considered …involve circumstances where the payor spouse changed positions or employers since separating, often making lifestyle sacrifices to do so [see Chalifoux v. Chalifoux; C. (D.B.); Kelly]; … the payor spouse had been given new career opportunities by virtue of luck or connections [see Fletcher v. Fletcher; Robinson v. Robinson]; the initial increase in income occurred long after the divorce [see Bryant [v. Gordon, 2007 BCSC 946, 45 R.F.L. (6th) 99]; Kelly]; the recipient spouse was employed and/or was supported in her career aspirations by the payor during the relationship [see Bryant; Kelly]; or the recipient spouse had not made reasonable efforts to become self-sufficient[see Bryant; Walsh v. Walsh].
Vancouver Income Increase Support Lawyers Provide Final Summary
The Ontario Supreme Court in Thompson v. Thompson, 2013 ONSC 5500 provided a list of principles to guide treatment of post-separation increases in a payor’s income. Although the analysis in Thompson v. Thompson includes numerous B.C. cases, note that as the Spousal Support Advisory Guidelines are national guidelines, out of provinces decisions can be important:
The recipient spouse may be permitted to share in post-separation increases in earnings if they can demonstrate that they made contributions that can be directly linked to the payor’s post-separation success. The nature of the contributions does not have to be explicit, such as contribution to the payor’s education or training: Judd v. Judd 2010 BCSC 153; Marinangeli v. Marinangeli 2003 CanLII 27673 (ON CA); A.A.M. v. R.P.K. [2010] O.J. No. 807 (S.C.).
A spousal support award is more likely to take into account post-separation income increases where the relationship was long-term, the parties’ personal and financial affairs became completely integrated during the course of the marriage and the recipient’s sacrifices and contributions for the sake of the family and resulting benefits to the payor have been longstanding and significant: Hartshorne v. Hartshorne, supra; Farnum v. Farnum 2010 ONCJ 378.
When this type of long history of contribution and sacrifice by a recipient spouse exists, the court will be more likely to find a connection between the recipient spouse’s role in the relationship and the payor’s ability to achieve higher earnings following the separation: Thompson v. Thompson, supra.
In determining whether the contributions of the recipient were sufficient, the court should consider such factors as whether the parties divided their family responsibilities in a manner that indicated they were making a joint investment in one career, and whether there was a temporal link between the marriage and the income increase with no intervening change in the payor’s career: Hartshorne v. Hartshorne supra; Judd v. Judd, supra; Sawchuk v. Sawchuk, 2010 ABQB 5.
If the skills and credentials that led to the post-separation income increase were obtained and developed during the relationship while the recipient spouse was subordinating their career for the sake of the family, there is a greater likelihood of the recipient deriving the benefit of post-separation income increases: Judd v. Judd, Supra
By contrast, the likelihood of sharing in such increases lessens if the evidence indicates that the payor spouse acquired and developed the skills and credentials that led to the increase in income during the post-separation period, or if the income increase is related to an event that occurred during the post separation period: Judd v. Judd, Supra.
Assuming primary responsibility for child care and household duties, without any evidence of having sacrificed personal educational or career plans, will likely not be sufficient to ground an entitlement to benefit from post-separation income increases: Sawchuk v. Sawchuk, supra.
Where the payor’s post-separation advancement is related primarily to luck or connections which they made on his own, rather than on contributions from the recipient, the claim for a share in post-separation income increases will be more difficult. Hartshorne v. Hartshorne, Supra.; Fletcher v. Fletcher, 2003 ABQB 890 (CanLII), 2003 ABQB 890 (Q. B.); Robinson v. Robinson, 1993 CarswellOnt 349 (C.A.).
Evidence that the payor also made contributions to the recipient’s career advancement, or that the recipient has not made reasonable steps towards achieving self-sufficiency are also factors that may preclude an award that takes into account post separation income increases. Bryant v. Gordon, 2007 BCSC 946 (CanLII), 2007 BCSC 946 (S.C.). Walsh v. Walsh (2006), 2006 CanLII 20857 (ON SC), 29 R.F.L. (6th) 164 (Ont. S.C.J.).
If you have a post-separation income increase spousal support dispute call founder Lorne N. MacLean, QC or any of our lawyers in BC and Calgary.
