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Imputing High Income Spousal and Child Support

Calgary Post Separation Support lawyers deal with cases involving changes to spousal support payments after separation. Frequently, Calgary Post Separation Support cases involve large gains in income by the paying spouse after an initial spousal support agreement amount or Court Order has been made. For child support purposes these gains mean child support will likely increase. But Calgary Post Separation Support cases involving spousal support require a different approach. Our Calgary family lawyers handle high net worth spousal support cases on a regular basis. You can book an appointment now by calling us at 403 444 5503.

The Alberta Court of Appeal Calgary Post Separation Support decision in Kohan v. Kohan  set out rules for Alberta cases:

[37]           There is no rule that post-separation increases in income cannot be considered in determining spousal support. Such increases can be a part of the “condition, means, needs and other circumstances of each spouse”. The Spousal Support Advisory Guidelines provide in part:

14.3.   . . . 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.

As explained by Prof. R. Thompson in “To Vary, to Review, Perchance to Change: Changing Spousal Support” (2012), 31 CFLQ 355 at pp. 372-3:

Where a child support payor’s income increases after separation, the child automatically gets to share the full benefit of the parent’s improved income by way of child support. There is no “entitlement” issue there. In the law of spousal support, there is an intervening entitlement question, as one spouse does not automatically get to share in the post-separation good fortune of the other spouse. On variation or review, a recipient may get to share none, some or all of the payor’s post-separation income increase. The SSAG [Spousal Support Advisory Guidelines] cannot simply be applied to the income increase, without more careful analysis.

As noted, there must be some analysis of the connection between the payee spouse’s contribution and the increase. This will particularly be the case with “one-time” bonuses based on anomalous business conditions.

Factors Used For Calgary Post Separation Support Cases 403 444 5503

Peter Graburn, managing associate at our Calgary office provides a great list of Calgary Post Separation Support factors Alberta Courts will look at to decide if the increase in the paying spouse’s salary after separation will be available for increased spousal support:

a)   there is no automatic right to an increase when the paying spouse’s income increases.

b)   needs and means based claims (non-compensatory) are less likely to permit a sharing of the increase compared to compensatory support claims where the strength of any economic disadvantage will be weighed;

c)  sharing the gain in post-separation increases in earnings may occur if the receiving spouse’s marital contributions can be linked to the post separation income increase, such as contribution to the payor’s education or training;

d)  the longer the relationship, the more intertwined the finances of the parties and the presence of children involving sacrifices by the homemaker,  the more likely the court find a connection between the recipient spouse’s role in the relationship and the payor’s ability to achieve higher earnings following the separation.

e)   when looking at recipient contributions, the court should consider  whether the parties divided their family responsibilities in a manner akin to a joint investment in one career, and whether there was a “timing” link between the marriage and the income increase with no intervening change in the payor’s career.

f)   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 sacrificing their career for the sake of the family, then there is greater certainty the recipient will share the benefit of post-separation income increases.

g)   conversely, 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 the chances for sharing the income gain will be minimized or negated.

h)   one of the greatest economic disadvantages justifying a strong compensatory claim occurs when one spouse assumes primary responsibility for child care and household duties and gives up educational or career advancement and increases post separation are likely to be shared on this scenario. In cases of shared parenting and cases where both spouses were able to advance their careers it is less likely the gain will be shared.

i)    post-separation income increases, as a result of a different type of job acquired post-separation, a reorganization of the payor’s employment arrangement with new responsibilities, or that the increase is a result of significant lifestyle changes which the payor has made since the separation may militate against a finding that the recipient should share in the increase.

j)   where the payor’s post-separation advancement is related primarily to luck or connections which he 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.

k)     the longer the time that has passed since separation and the increase occurring the less likely a court will find the gain was causally related to the post-separation income increases and less likley it will be shared.

l)  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.

Tip – Courts Analyze Whether Contribution To Career Skill Set Occurred 403 444 5503

In the Alberta decision of Kohan, the court found the husband’s salary bonuses arose largely from unusual market conditions, unconnected with any contribution of the respondent to the marriage. They also arose many years after the separation, and after both parties had formed new relationships. On these facts, the Court allowed the appeal on the claim the basis the respondent ex-wife did not meet the burden of demonstrating full entitlement to a share of these bonuses.

Calgary Post Separation Support Increase cases involve a thorough analysis of nearly a dozen key factors to ensure a just calculation of spousal support is arrived at. Don’t try to figure this out yourself and don’t procrastinate as the increase in support can be substantial.

Call our Calgary family lawyers today at 403 444 5503