Family Law Veterans Pension and spousal support cases are arising more frequently in BC Courts. Should the veteran’s pension income be included or excluded in spousal and child support cases? In today’s blog by Audra Bayer and Karsten Erzinger, explore this interesting topic of Veterans Pension and spousal support. Our firm handles all types of spousal and child support cases. It is important to note that the income tax return for a spouse is often not a true indicator of proper income to be used for spousal and child support.
ALERT – Tax Returns Are Often Not Accurate For Spousal and Child Income Calculations
Business owners and professionals, as well as those with capital gains income, or cash income need to have their incomes scrutinized closely so their true income is used and grossed up. For those who work less than capacity imputation will often occur.
Our national spousal support lawyers act across CANADA have set records for the highest interim, permanent, exceeding $100,000 a month (YES A MONTH!) and multi-million dollar lump-sum awards Our wins have generated front-page news.
Veterans Pension and Spousal Support
1 877 602 9900
Spousal support and child support issues range from straight forward to contentious and complicated. When there is a live support claim in a family law case, the courts will begin by referring to a party’s filed tax returns for the best evidence of their income. However, there all sources of income must be considered but this does not mean that all sources of income are relied upon to determine income. The courts have discretion under various laws including the Divorce Act and the Family Law Act to consider various factors and income, also, to simply what a person reports on their tax return determining the support payable. One such source of income is the Veterans Affairs Pension.
A recent decision from the BC Supreme Court tackles the issue of Veterans Affairs Pension and how it is to be considered when determining Veterans Pension and spousal support.
Veterans Pension and Spousal Support
1 877 602 9900
In TC v LA, 2020 BCSC 1313, the court had to consider if a payor’s VA Pension income should be included in his overall income when calculating how much he should pay in spousal support.
The payor father received a monthly disability pension from Veterans Affairs Canada for “physical and stress-related injuries incurred at work” as an RCMP Constable. He received approximately $1,749.77 per month for his disability pension in non-taxable funds, which was the equivalent of receiving $34,771 annually in taxable income.
The court ruled that the mother had an entitlement to compensatory and needs-based spousal support. She argued at trial that the VA Pension ought to be added into the father’s annual income, grossed up to reflect its tax-free status, and the amount of spousal support ordered should reflect that income. The father argued that the VA Pension was compensation for personal losses and that it should not be considered as income.
The issue of VA Pension had been considered in other cases before this, though there is consistent finding on this issue. In the final result concerning the issue of spousal support, the court declined to include the VA Pension directly in the father’s income for the latter term payable noting at paragraph 61 that:
The father should not be punished for his generous use of the VA Pension for the benefit of the family rather than his own therapeutic uses. It is clearly tied to and designed to compensate him personally for his specific work injuries, regardless of actual use. Those physical and psychological injuries are ongoing and will likely be long-term. Finally, the fact that the father is the primary custodian, and will for practical purposes likely contribute more to the expenses of the children, inclines the Court to follow the tenor of the British Columbia cases pre-Lozinski and not include it to the credit of the mother and detriment of the injured father. Instead, I will consider the availability of those funds to the father in general terms, below, in the overall consideration of the appropriate quantum and duration of spousal support.
The important bit of that paragraph is the last sentence. As noted earlier in the decision, the court has broad discretion to consider “the condition, means, needs and other circumstances of each spouse” in making a support order, per Section 15.2(4) of the Divorce Act. Rather than directly impute the income to the father, Justice Crerar chose to use that discretion differently. Ultimately, the court ordered 14 years of spousal support for the recipient mother, with the first 4 years being paid at a higher level with half of the father’s VA Pension income. For the second term of spousal support, the father’s VA Pension income was not included in his overall income and the amount of support ordered was lower as a result.
Call Our National Family Lawyers Across Canada Today 1 877 602 9900
To summarize: income is not necessarily what is on a person’s tax return. In situations where a party receives a VA Disability pension, the facts of a particular case will be of even greater importance due to the court’s broad discretion under the law.
