Grey Divorce Support Early Retirement is affecting more and more couples who divorce later in life. Will spousal support change or stop when the payor retires? What happens to spousal support if the payor tries to retire early? In today’s blog senior downtown Vancouver family lawyer Jonathan Wai explains grey divorce support early retirement issues.
The recent BC Supreme Court case of McPherson v. McPherson 2019 BCSC 933 is a good example of the issues arising in a Grey Divorce Support Early Retirement dispute. In today’s blog, senior lawyer Jonathan Wai of MacLean Law’s Vancouver office explains the case and the implications for early retirement on spousal support.
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In McPherson, the parties were married for nearly 20 years and divorced in 2005. There was a court Order that Mr. McPherson pay $1,200 per month in spousal support, without an end date specified, though Mr. McPherson could bring a review in 2007. He indeed brought an application to terminate spousal support at that time. Both that and Ms. McPherson’s cross-application to increase spousal support were dismissed. As such, Mr. McPherson continued to pay the $1,200.
So what are the rules in Grey Divorce Support Early Retirement Disputes?
In 2019, having paid spousal support for 12 years, Mr. McPherson at age 60 decided to retire. He again applied to terminate spousal support. Ms. McPherson, also 60 years old, opposed the application and argued that she should continue to receive the same amount of spousal support until she was at least age 65, and started receiving her Canada Pension Plan payments. These are common considerations for spouses in a Grey Divorce Early Retirement situation.
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The court first noted the objectives of spousal support in the Divorce Act, as follows:
(a) recognize any economic advantages or disadvantages to the former spouses arising from the marriage or its breakdown;
(b) apportion between the former spouses any financial consequences arising from the care of any child of the marriage over and above any obligation for the support of any child of the marriage;
(c) relieve any economic hardship of the former spouses arising from the breakdown of the marriage; and
(d) in so far as practicable, promote the economic self-sufficiency of each former spouse within a reasonable period of time.
The court then considered the factual history of the parties’ relationship, which included that:
- The parties’ marriage was more or less a traditional one. The respondent [Mr. McPherson] worked outside the home and earned most of the family income while the claimant [Ms. McPherson] was the primary caregiver for the children. (para 7)
- The claimant was 46 years old when the marriage broke down. Since separation, she has continued working as a hairdresser and has held down other jobs from time to time. Her earning power has never been great and spousal support has made up a substantial portion of her income year on year. Her present-day employment income is exceedingly modest, partially due to the development of certain medical problems that limit her physical capacity to work …(para 8)
- When the parties met the respondent was an undischarged bankrupt. I find as a fact that the claimant helped him get back on his feet financially. She assisted him in the establishment of an eaves trough installation business. Her father bought him the necessary supplies and a trailer to get started. In 1987 the respondent established a residential construction company and operated it with the claimant’s support and assistance. In 1991 the respondent parlayed his construction experience into secure and remunerative employment as a building inspector. (para 9)
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In short, the divorce order was made after the breakdown of a long, traditional, rule of 65-compliant marriage during which the claimant made economic sacrifices that enhanced the respondent’s career prospects and earning power. (para 10)
The court also noted that the amount of spousal support had not increased over the years, even though there were arguments for that, based on inflation, or because of Mr. McPherson’s income increases, given that Ms. McPherson helped create his career (para 11).
Mr. McPherson, on the other hand, argued that his retirement at age 60 was not “early”, as he had worked for 24 years at his job, and was eligible for an unreduced pension. As well, he noted that the court order dividing property provided that Ms. McPherson was entitled to a portion of that very same pension (the portion attributable to contributions during the marriage). He argued he should not have to give her the share of the pension, and spousal support sometimes called “double-dipping”.
Both of these perspectives are not uncommon for couples facing a Grey Divorce Early Retirement. The court thus posed the question, quoting Professors Rogerson and Thompson:
When will a retirement be described as “early”? The courts are not always clear. For our purposes, an “early” retirement is either a retirement on a reduced pension or a retirement on a full or unreduced pension before 65 years of age, in the absence of health issues or other special circumstances. If the court sees the early retirement as “voluntary” and not necessary or reasonable, then it is likely that spousal support will not be changed. (para 27)
In the McPherson case, the court noted that the underlying reasons for spousal support were largely “compensatory”, meaning to compensate Ms. McPherson for the many years she spent raising the children during the marriage, at cost of her own career. As well, the court found that Mr. McPherson’s retirement was not the result of corporate restructuring, dismissal or layoff, or by declining physical or mental health.
Ex-Husband ordered to keep paying Spousal Support
In dismissing Mr. McPherson’s application to terminate spousal support, the court stated:
I conclude that he must continue paying in accordance with the divorce order. Whether he does this by returning to work, or paying over his pension income, or a combination of the two, is entirely up to him.
The court also noted two secondary arguments from Mr. McPherson, which are not uncommon in Grey Divorce Early Retirement cases: Ms. McPherson had after divorce received a $400,000 inheritance, and had for brief time re-partnered. The court here stated that, because the spousal support was “compensatory” and thus related to the sacrifices she made during the marriage, as opposed to her circumstances afterward, the inheritance did not affect Mr. McPherson’s obligation to pay spousal support. The brief re-partnering similarly had no bearing for this reason, never mind that Ms. McPherson did not receive much if any benefit from it in any case as the former partner had minimal income and no assets.
Takeaway From Case
As you can see, there are a variety of factors to consider regarding spousal support in Grey Divorce Support Early Retirement cases. At MacLean Law, we can advise you about spousal support and retirement, whether you are just starting a divorce or separation, or have obtained one already and retirement is coming up, to ensure you know all aspects of your rights and obligations. Click here for more free information.
We have offices in Vancouver, Surrey, Richmond, Kelowna, Fort St. John and Calgary to serve you. Call us toll-free at 1 877 602 9900 to understand how retirement affects your support case.
