Developing Spousal Support Guidelines in Canada: Beginning the Discussion
IV. MODELS FOR SPOUSAL SUPPORT GUIDELINES
This part of the paper moves from theory to practice. It examines existing attempts to craft workable spousal support guidelines. The focus will be on the American experience with spousal support guidelines. While in the end none of the American guidelines may, in their specific incarnations, be appropriate models for Canadian guidelines because of differences between American and Canadian understandings about the nature and role of spousal support, they may at the very least offer some general guidance on possible ways of structuring guidelines.
Of particular interest are the ALI proposals, given their thoughtful and comprehensive treatment of the issue. More complex than any of the other guidelines examined, the ALI proposals attempt to recognize diverse bases for the spousal support obligation and as well try to craft formulas that are more responsive than many other guidelines to factual variations in types of marriages. Specifically, one significant feature of ALI proposals is reliance upon what is called a "durational factor" that renders the quantum of awards sensitive to the length of the marriage. These are important features, given our recognition in Canada of multiple bases for spousal support and the concerns of critics that spousal support guidelines are too rigid and cannot adequately respond the diversity of fact situations. Given the importance of the ALI proposals, they receive an extended analysis.
One Canadian guideline, proposed by Linda Silver Dranoff and used by some lawyers in Ontario, will also be examined. The Dranoff formula is of interest because it is inspired by decisions such as Andrews and Adams, discussed in Part II above, which have no counterparts in American spousal support law or guidelines.
While not widespread, spousal support guidelines have been adopted in some American jurisdictions, and in some cases have been in existence for more than a decade. The guidelines were typically developed on a local basis as a result of initiatives by bench and bar committees of local bar associations. They were thus intended to operate within the parameters established by state legislation governing spousal support, with the primary purpose of the guidelines being to set a framework for negotiation and discussion. More recently, the influential American Law Institute, as part of its ambitious project to rethink the principles of family dissolution, has endorsed a new set of principles for spousal support which include a significant formulaic component. Unlike earlier versions of American spousal support guidelines, the proposed ALI guidelines are best viewed not simply as a reflection of current practice, but as a more ambitious attempt to reshape the law and offer a blue-print for legislative reform.
In reviewing the American guidelines it will be important to keep in mind the context in which these guidelines were created, both to understand their structure and to assess their applicability in Canada. With the exception of the ALI proposals, the American guidelines are all reflections of current practice under existing legislative regimes. Although generalization is risky when you are talking about spousal support regimes in 50 different states, spousal support is a much more limited obligation in the United States than in Canada. Much state legislation and current practice was influenced, either directly or indirectly by the general principles articulated in the 1970 Uniform Marriage and Divorce Act, which understood property division to be the main vehicle of financial redistribution upon divorce. Entitlement to spousal support was restricted to cases where a spouse lacked sufficient property to provide for his or her reasonable needs and was unable to support himself or herself through appropriate employment or was the custodian of a child whose condition or circumstances made it appropriate that the custodian not be required to seek employment outside the home. As well, even when eligibility for spousal support was established, the UMDA contemplated only transitional awards.
Some state legislatures which initially endorsed this "rehabilitative" or "clean break" model of spousal support have in recent years reformed their spousal support laws to allow for the possibility of permanent spousal support in marriages of long duration. However, the American law of spousal support still continues to place a fairly heavy emphasis on values of individualism and self-sufficiency after divorce. Spouses who are employed rarely obtain spousal support and durational limits on spousal support still have wide acceptance. Even the ALI proposals, which are an attempt to reshape and expand the law of spousal support, still reflect these values to some degree.
As a result of the contexts in which they were generated, many of the American guidelines actually play a relatively limited role in the over-all determination of spousal support. (The ALI proposals are an exception, offering a comprehensive blue-print for the reconfiguration of the law of spousal support.) In many cases the guidelines are not applicable until entitlement to support is first established, and the basis of entitlement is often fairly restrictive.
Some of the guidelines only govern applications for interim or temporary spousal support (in the American terminology, alimony "pendente lite"), the purpose of which is to create a "holding pattern" until a final determination of support can be made in the context of the divorce and property division. At that point the guidelines no longer necessarily dictate outcomes, and other considerations, such as the need to promote self-sufficiency, are allowed to come into play in determining issues of long-term support.
Other guidelines, while intended to generate determinations of quantum for final orders, operate in conjunction with fairly stringent durational limits, including automatic termination of support upon remarriage. The durational limits are in many cases not found in the guidelines, which deal only with quantum, but are determined by means of judicial interpretation of the existing legislation. In some cases, however, and this seems particularly true of the more recently developed and more ambitious guidelines, the guidelines themselves also contain a formula for determining duration of the support obligation.
In Canada, given the way our spousal support law has evolved, it is questionable whether any scheme of spousal support guidelines relying either upon rigid durational limits or limited bases of entitlement would be acceptable. Perhaps the main lessons that can be taken from the American guidelines are with respect to their methodologies for determining quantum. There is a danger of distortion, however, in examining these determinations of quantum apart from the durational limits which operate in conjunction with them and determine the ultimate amount of spousal support being transferred, and apart from the restrictions on entitlement which limit the number of cases in which the guidelines are applicable.
The striking structural feature of all of the American spousal support guidelines is the determination of the amount of spousal support to be paid to the lower income spouse by applying a percentage to the difference between the spousal incomes. The guidelines thus redistribute some portion of that income differential, thereby reducing the extent of the gap between the lower and higher income spouse. Put simply, they implement a form of income-sharing. As will be seen in the more detailed discussion of some specific guidelines which will follow, some guidelines use net income figures and some use gross. The main determination in the structuring of the guideline is the percentage to be applied to the income differential, and whether the percentage will vary to reflect different circumstances. The percentage may be related, for example, to the length of marriage, or the presence or absence of children. Some of the guidelines also have formulas for determining the duration of support, using length of marriage as the primary determinant of duration.
However these issues are resolved, the guidelines dramatically reduce the factors that are relevant to the determination of support quantum. There is no detailed examination of the past history of the relationship or the way in which it was structured. The main focus is on factors that are readily known and obvious at the point of divorce—most obviously the relative income positions of the spouses—with some guidelines also making relevant the length of the marriage and the presence of minor children. The use of budgets to determine either the recipient's needs and the payor's ability to pay is eliminated. The support recipient is simply allocated a percentage share of the income differential.
The effect of the American spousal support guidelines is thus similar to what we have already experienced in Canada with the child support guidelines, which have moved us away from an individualized, budget-based, cost-sharing approach to a percentage-of-income approach. What is somewhat radical about the adoption of an income-sharing approach in the spousal support context is the elimination of any consideration of the past history of the relationship, of the ways in which the spouses structured their roles, and of the origin and nature of a spouse's economic needs–factors which have conventionally been understood to be relevant to determining both the existence and extent of the spousal support obligation. To the extent that the guidelines attempt to differentiate between marriages, length of marriage is typically the only factor considered. It is important to remember however, that a broader range of factors than those encompassed by the guidelines might still come into play in determinations both of entitlement and duration.
What follows is a more detailed review of some of the American spousal support guidelines. The review will begin with the earliest guidelines developed in California, but which are limited in that they deal only with interim support. This will be followed by a discussion of fairly long-standing guidelines developed in Pennsylvania and Kansas. The Pennsylvania guidelines, although applicable only to temporary support applications, are notable for being the only state-wide legislated guidelines. The Kansas guidelines are notable for their application to the determination of permanent (i.e., post-divorce) support. The review will end with an examination of the more complex guidelines proposed by the American Law Institute and the Maricopa County guidelines in Arizona that have attempted to incorporate a simplified version of the ALI proposals.
In the American context the first spousal support formulas were developed in California in the 1970s at the initiative of the family law committees of local bar associations with the support of local judges. Now over half of the counties in California use spousal support guidelines. All of the California guidelines are expressly understood to be for the purpose of establishing interim (or in American terminology "temporary") support and are intended to maintain the parties' living conditions and standards as close as possible to the status quo pending trial and division of their assets. In terms of crafting Canadian guidelines for permanent support, the California formulas may be appropriate for certain kinds of marriages—the most compelling cases for spousal support where there has been a significant merger of economic lives over a lengthy period of time such that equal sharing of income, or something approaching that, is seen to be appropriate on a permanent basis.
One example of the California guidelines are those in Santa Clara County, south of San Francisco, which are actually incorporated into the local rules of court.  The temporary support formula provides that support will "generally" be calculated by taking 40% of the higher earner's net income minus 50% of the lower earner's net income, adjusted for tax consequences. Thus, in a case where the support claimant has no income, the formula would provide for a maximum transfer of 40% of the payor's net income. In cases where the support claimant has some income, the amount transferred under the formula will be somewhat less than 40% of the income difference. When contrasted with other American guidelines, it will become apparent that the Santa Clara formula transfers fairly generous spousal support awards in cases of significant income gaps. This is not surprising given that the objective of the guidelines is to preserve the pre-breakdown economic status quo between the parties until trial. But even these guidelines do not wb-eqht net incomes; they maintain some income differential between the spouses, the rationale being the need to maintain incentives for the payor to continue earning. In other California counties the percentages are somewhat lower, with formulas based, for example on 35% of the higher earner's net income minus 50% of the lower earner's income.
In cases where child support is also being paid, the formula provides that spousal support is to be calculated after child support on the basis of net income not allocated to child support. In this way, the formula operates in much the same way as the methodology which endorsed by the Ontario Court of Appeal in Andrews.
While the Santa Clara guidelines, like all of the California guidelines, are expressly applicable only to the calculation of temporary support, in practice they also influence the quantum of "permanent" support awards at trial. However, determinations of permanent support involve difficult questions about the duration of the support obligation. Duration remains a serious issue in California despite recognition of the ability of courts to impose permanent support obligations in cases involving lengthy marriages.
California attorney, George Norton, who was involved in drafting the Santa Clara guidelines, has proposed their adoption for the calculation of permanent support awards with the addition of guidelines to establish duration of support. Norton's guideline would impose an "arbitrary" limitation on spousal support with a rule that in no case would the obligation to support a party last for a period of time greater than the period of time the parties were married or lived together. As well remarriage would, with some limited exceptions, terminate spousal support. Norton's proposal also makes provision for reductions and terminations of spousal support to deal with changing circumstances over time, such as the actual or anticipated earnings of the payee and the retirement of the payor. It should be noted, however, that Norton's model does not contemplate increases in the support amount based on increases in the payor's income; other American guidelines that will be reviewed share a similar assumption. Finally, time limits or drop-downs based on anticipated changes in the income or earning capacity of the payee would be allowed in initial orders, but such orders would have to remain open to modification for a period of time correlated to the length of the marriage. Norton's proposals are, of course, a theoretical guideline model that has not yet been implemented, but they offer some interesting ideas about how to incorporate subsequent variation into a guideline model, which most of the American guidelines do not.
The Pennsylvania support guidelines are unique in being statewide, legislated guidelines found in the Pennsylvania Rules of Civil Procedure. The origins of the Pennsylvia guidelines are in a formula created in Allegheny County in the 1980s by a bar/bench committee to guide determinations of child and spousal support in cases which were diverted out of the court system to hearings before domestic relations officers. In 1989 the Allegheny guidelines were legislated state wide. In so far as they deal with spousal support, the Pennsylvania guidelines are, like the California guidelines, applicable only to applications for alimony pendente lite, or temporary support. Once an entitlement to support has been determined under the Domestic Relations Act, the guidelines create a "rebuttable presumption" that the amount of the award determined under the guidelines is the correct amount of support to be awarded. Deviations from the presumption require a written finding by the trier of fact that the guidelines amount would be "unjust or inappropriate". These guidelines thus have more force than either the Santa Clara guidelines discussed above or the advisory status of the Kansas county guidelines which will be discussed below.
Like California, Pennsylvania uses net rather than gross income figures. However, the Pennsylvania guidelines create a separate formula for cases with minor children. If there are no minor children, spousal support is 40% of the difference in the parties' net incomes. The percentage is thus somewhat higher than under the Santa Clara guidelines. If there are minor children, as under the Santa Clara guidelines, child support is to be calculated first, and spousal support determined on the basis of net income figures after the deduction of child support from the payor's income. But the Pennsylvania formula also uses a different (lower) percentage to calculate spousal support in these cases: 30% of the difference in net incomes, rather than 40%.
While the Pennsylvania guidelines apply only to temporary orders, in practice they often influence the quantum of final support orders as well. But final orders are subject to durational limits determined under the state spousal support legislation and thus open to on-going debates about the appropriateness of permanent versus rehabilitative support.  The Pennsylvania guideline does not offer any formula for determining duration.
In Kansas, as in California, spousal support guidelines have been created on a local (i.e. county) basis by the family law bench bar committees of county bar associations as one part of more comprehensive "family law guidelines" which also cover custody and parenting arrangements, property division and valuation. The committees are composed of lawyers, judges and mental health professionals. The first such guidelines, which were created in Johnson county (which encompasses suburbs of Kansas City) in the late 1970s, will be described here. Two other Kansas counties have subsequently followed suit: Wyandotte (also the suburbs of Kansas City) and Shawnee (Topeka). Unlike the California and Pennsylvania guidelines, the Kansas guidelines are not confined to temporary support calculations and apply to final maintenance arrangements.
The Johnson County Family Law Guidelines are published, but have not been incorporated as a local court rule. They are presented as a helpful framework for negotiation, but are clearly stated to be advisory rather than binding. The guidelines include the caution that "individual circumstances require individual analysis and may require amounts and terms of maintenance that are greater or less than suggested by these guidelines."
The Johnson County Guidelines are interesting in that they address the purpose of spousal support. While recognizing that the maintenance legislation and judicial decisions under it encompass a wide range of factors, the guidelines are crafted on the assumption that "[g]enerally, the purpose of maintenance is to rectify an economic imbalance in earning power and standard of living in light of the particular facts of each case, with the primary factors to be considered being the needs of one spouse and the other spouse's ability to pay." In general, the drafters of the guidelines believed that the parties, their lawyers, and the court were better served by dealing with "the objective current economic situation"—i.e., the relative incomes of the parties—rather than such "subjective" considerations as each party's relative economic contribution to the marriage.
The formula offered by the guidelines for the calculation of spousal support distinguishes between marriages in which there are minor children (and a concurrent child support obligation), and those in which there are not. For marriages without minor children, the guidelines provide that support should be determined by calculating 25% of the difference between the gross incomes of the parties. Under this guideline, the percentage of income shared is thus significantly lower than under the Santa Clara or Pennsylvania guidelines. It is a very crude formula that is not responsive to differing lengths of marriages, and it would not provide anything close to equalization of income even after very lengthy, traditional marriages.
In cases where there are minor children, spousal support is to be calculated before the calculation of child support, using a formula of 20% of the difference in gross incomes. This way of dealing with cases involving minor children differs from that adopted in the Santa Clara and Pennsylvania guidelines, where spousal support is calculated on the basis of net incomes after child support amounts are withdrawn. The Johnston County solution is mandated by the Kansas child support guidelines, which use an income-shares formula that requires that spousal support be calculated before the calculation of child support. This way of dealing with cases involving minor children would not be transferable to the Canadian context, where child support calculations are done first and are based on the payor's income prior to payment of spousal support.
The Johnston County maintenance guidelines also address the duration of support by means of a formula based upon length of marriage. This feature of the guidelines reflects the fixed durational limits imposed by the state support legislation. For marriages under 5 years, duration is to be calculated by dividing the length of the marriage by 2.5. For marriages over 5 years, the formula is two (5 divided by 2.5) plus the number of years in excess of 5 divided by 3. Thus a four year marriage would generate a support duration of 1.6 years or 19 months. A 17 year marriage would generate a duration of 2 years plus 4 years (17 years-5 years=12 years, then divide by 3), for a total of six years. A 30 year marriage would generate a durational period of 10.33 years or 124 months. The durational periods of support are relatively short when compared to current Canadian practice. Maintenance is also terminated by the remarriage or cohabitation of the payee.
The American Law Institute has been engaged in an ambitious project of rethinking the principles which should govern the law of family dissolution in the hope that its recommendations will guide the on-going development and reform of the law by state legislatures. Its recommendations with respect to spousal support, found in chapter 5 of the Principles of the Law of Family Dissolution, represent an attempt to reshape (and not simply reflect) existing American practice based upon emerging trends in the law. Unlike existing American guidelines, the ALI guidelines deal with spousal support in a comprehensive way; and would determine entitlement and duration as well as quantum.
The ALI proposals are of interest to anyone who is trying to think through the conceptual basis of spousal support and develop practical and easily-administered legal rules to implement those concepts. Those involved in the ALI project were very conscious of the value of clear and predictable rules to guide settlement, and their recommendations with respect to spousal support have a significant formulaic component. The ALI drafters, while visionary, were conscious of not making recommendations that strayed so far from existing practice that there was little hope that they could ever be implemented. In the end, their proposals may still reflect aspects of current American practice that are inappropriate for Canada.
On the conceptual level, the ALI recommendations break new ground, at least in the American context, by replacing "need" as the basic justificatory principle for spousal support with the principle of "compensation" for financial losses which are incurred or realized upon dissolution of the spousal relationship. This conceptual shift is reflected in a change in terminology, from "alimony" to "compensatory spousal payments." For Canadians, who experienced a shift to a compensatory framework after Moge, the reconceptualization will not appear so radical, and it is interesting to note that Justice L'Heureux-Dubé is listed as one of the advisors on the project. As will be shown below, however, the concept of compensation utilized by the ALI is very broad and covers much of what we in Canada have started to label non-compensatory support.
Having established "loss" rather than "need" as the basis for entitlement to spousal support, the Principles go on to specify five "compensable losses":
- In a marriage of significant duration, the loss in living standard experienced at dissolution by the spouse who has less wealth or earning capacity.
- An earning capacity loss incurred during marriage but continuing after dissolution and arising from one spouse's disproportionate share, during marriage, of the care of marital children.
- An earning capacity loss incurred during marriage but continuing after dissolution and arising from the care provided by one spouse to a sick, elderly, or disabled third party, in fulfillment of a moral obligation of the other spouse or of both spouses jointly.
- The loss either spouse incurs when the marriage is dissolved before that spouse realizes a fair return from his or her investment in the other spouse's earning capacity.
- An unfairly disproportionate disparity between the spouses in their respective abilities to recover their pre-marital living standard after a short marriage.
The Principles would allow claims to be made on multiple bases and "stacked," although there are provisions precluding double recovery and setting limits on the level of aggregate recovery.
The first and second kinds of losses—generating what are referred to respectively as the "marital duration" claim and the "primary care-giver" claim—will be the focus here, both because they are the kinds of claims implicated in the majority of typical spousal support cases and because it is for these kinds of claims that the Principles develop some presumptive guidelines to create certainty and predictability. The third type of loss is essentially a variant of the primary care-giver claim.
The last two losses (4 and 5), which will typically arise in short marriages, are intended to be dealt with on an individual basis. They are recognized as exceptions to the general principle animating the ALI Principles that compensable losses increase with the length of the marriage, and that in general short marriages will generate very limited or no spousal support claims. The fourth type of loss covers "reimbursement alimony," essentially a restitutionary claim in cases where marriage breakdown occurs shortly after one spouse attained an educational degree with the other's support. The fifth type of loss covers situations where one spouse may have given up employment or moved to facilitate what turned out to be a very short marriage, thus experiencing significant losses that will not be captured by the claim based on marital duration. It allows for an individualized, fact-specific compensatory analysis.
Both the "marital duration" and the "primary care-giver" claims are triggered by the disparate financial circumstances of the spouses after divorce—put simply, by significant disparities in spousal incomes after divorce. For both claims, the Principles devise a "presumptive" income-sharing formula based upon the application of specified percentages to the difference in spousal incomes, with the percentages increasing with the length of the marriage. A formula is also devised to determine the duration of awards such that they correlate with the length of the marriage (or the length of the child-rearing period.) What makes the Principles unique among American guidelines is their attempt to delineate two separate bases for claims to post-divorce income-sharing, which may be combined. Each of these two bases will now be examined in somewhat more detail.
The "marital duration" claim is based on loss of the marital standard of living in marriages of significant duration. While labelled "compensatory" by the Principles, this kind of claim corresponds, at least in part, to what we in Canada would, post-Bracklow, refer to as non-compensatory support based on financial interdependency during marriage. The theory offered by the Principles for this claim is neither loss of earning capacity by the lower-income spouse due to marriage nor contribution by the lower-earner to the higher earner's earning capacity. While recognizing that some marriages might give rise to such claims, the Principles offer a more general rationale based upon a principle of merger of economic lives over time, which also entails significant elements of reliance and expectation. Stephen Sugarman's theory of "merger over time," which has been discussed above in Part III, is explicitly drawn upon. Claims on this basis could be brought whenever there is a significant difference in spousal incomes after divorce, including childless marriages and those where both spouses were employed during the marriage but earning very different incomes for any number of reasons. As conceptualized, the claim is strongly influenced by the length of the marriage, with the claims intensifying the longer the duration of the marriage.
The rule created to implement the principle of compensation for loss of marital standard of living would grant an entitlement to support on this basis whenever a marriage has lasted a significant duration and there is a substantial disparity in expected spousal incomes after dissolution. States would be required to establish the requisite marital duration and degree of income disparity. The Principles offer the example of a rule establishing, for example, a minimum duration of 5 years and a situation where the income of the higher earner is at least 25% greater than that of the lower earner.
Quantum would be determined by applying a specified percentage to the difference between the incomes the spouses are expected to have after dissolution. The specified percentage is referred to as the durational factor and is intended to increase proportionately with the duration of the marriage up to a stated maximum. States are given discretion as to how they establish a durational factor As an example, the durational factor could be determined by multiplying the years of the marriage by .01. Under such a formula a 10 year marriage would generate a durational factor of .1 (10 times .01), which would mean a spousal support award of 10% of the income difference; a 20 year marriage would generate a durational factor of .2 (20 times .01) which would mean a spousal support award of 20% of the income difference. If .015 were chosen instead of .01, a 10 year marriage would result in a durational factor of .15 (15% of income difference) and a 20 year marriage a durational factor of .3 (30%).
The formula would require the establishment of a maximum durational factor which would apply to the lengthiest marriages. Here, while once again leaving the determination to the states, the Principles suggest that it should fall somewhere between .4 (requiring transfer of 40% of income difference) and .5 (requiring transfer of 50% of income difference, or income equalization). While recognizing the appropriateness of income equalization in some cases involving the lengthiest of marriages, the Principles are reluctant to require it on the grounds that in some cases income equalization would transfer more funds than would be required to compensate for the loss of the marital standard of living. (The conclusion is also supported by the finding that income equalization is rarely achieved in existing case law, even in cases of long-term marriages.)
Duration of the award would be proportional to the length of the marriage. It would be determined by a formula that would multiply the length of the marriage by a "specified factor" to be established by legislation. As an example, a specified factor of .5 would result in a presumption of one year of support for every two years of marriage. The term of the award would presumptively be indefinite when the age of the recipient and the duration of the marriage were above certain specified minimums, for example 50 years of age and 20 years of marriage.
The Principles establish a separate claim for earning capacity loss related to one spouse's disproportionate assumption of child-rearing responsibilities. The conceptual justification for this claim requires little explanation. It is the paradigmatic compensatory claim and, as discussed above in Part III, has been widely adopted as a legitimate justification for the imposition of a spousal support obligation.
The significant conceptual move in the Principles is the method chosen to quantify such claims of loss. In theory quantification of such claims should be based on what the claimant's earning capacity would have been without child-care responsibilities. The marital standard of living or the other spouse's post-divorce earnings should be irrelevant. Recognizing the practical difficulties with measuring earning capacity loss, the Principles choose as a "proxy" measure of earning capacity loss the income disparity between the spouses at the point of dissolution in conjunction with the length of the child-rearing period.
In justifying the use of the higher earner's post-marital income as a baseline for measuring earning capacity loss, the Principles rely on the questionable assumption that "most people choose mates of similar socioeconomic status." This explanation is bolstered by the argument that the primary caregiver would likely have incurred an earning capacity loss in the expectation of sharing in their spouse's future income. Perhaps recognizing that these explanations might not prove satisfactory, the drafters offered an alternative explanation--that the disproportionate assumption of child-rearing responsibilities by the primary care-giver has facilitated the other spouse's ability to maintain his earning capacity as well as enjoying the benefit of having children.
Under the rule crafted by the Principles to capture earning capacity loss, entitlement would be presumptively established if the marriage was one with children and the claimant's earning capacity at dissolution is substantially less than that of the other spouse. As with the marital duration claim, the main factor triggering entitlement is a disparity in spousal incomes. The Principles would allow the presumption of entitlement to be rebutted by a determination that the claimant was not in fact the primary care-giver (i.e., did not provide more than substantially half of the total care that both spouses). However, assuming that the claimant was a primary care-giver, the structure of the entitlement provisions creates an irrebuttable presumption that the disparity in spousal incomes reflects an earning capacity loss because of the disproportionate assumption of child-care responsibilities. Thus, claims for earning capacity loss can be brought not only by primary care-givers who are unemployed or working part-time at the point of dissolution, but also by secondary earners in full-time employment.
The Principles attempt to create an easily-administered rule that obviates the necessity of any complex, individualized, factual analysis of causal links between the claimant's disproportionate assumption of child-rearing responsibilities and her earning capacity. The Principles rely instead upon social science evidence establishing that, in general, responsibility for the care of children has a significant impact on earning capacity.
In cases of earning capacity loss, quantum would be calculated, as in cases based on loss of marital standard of living, by applying a specified percentage to the income difference between the parties. In this case, the specified percentage would be a child care duration factor which would attempt to correlate the amount of the award to the duration of the child care period during the marriage. This provision is based upon the assumption that the longer the period during which the claimant's market opportunities are impeded by child rearing responsibilities, the larger the resulting earning capacity loss is likely to be. As an example of the operation of this rule, the child care durational factor could be set at the length of the child care period multiplied by .15. In the case of a 10 year marriage with an 8 year child care period, this would yield a child care duration factor of .12 (which translates into a 12% share of the difference in spousal incomes).
The primary-care-giver claim only attempts to compensate for earning-capacity losses because of child-rearing responsibilities during the period of the marriage (and even here it does not provide full compensation). It does not purport to deal at all with earning-capacity losses because of post-divorce child-rearing responsibilities. This claim thus does not draw on a full parental partnership theory as outlined in Part III, above. The Principles attempt to deal with some of the earning-capacity losses resulting from post-divorce child care through child support rather than spousal support.
- Stacking claims:
The Principles would allow primary care-giver claims based on earning capacity loss to be combined with marital duration claims for loss of the marital standard of living, but would impose a cap on the total percentage of the income difference that can be claimed, that cap being the maximum percentage established for the marital duration claim. Thus combined claims would be capped at somewhere between 40 to 50% of the income difference, but that maximum value would be attained sooner in marriages with children than without.
Following the model of the rules adopted for determining duration of claims for loss of marital standard of living, the duration of primary care-giver claims for earning capacity loss would be determined by means of a formula that multiplied the years of the child care period by a specified factor, such as, for example, .5.
Some other structural features of the ALI guidelines, which apply to both the marital duration and primary care-giver claims, are worth noting:
- First, the awards would be subject to modification or termination if the financial capacity of either or both of the parties is substantially different from that upon which the original award was based, as a result, for example, of improvements in the recipient's financial position or a decrease in the financial capacity of the payor. Notably, however, increases in the financial capacity of the payor would not constitute a basis for modification, a result justified by the conceptual framework which measures loss against the marital standard of living at the time of dissolution.
- Second, all obligations to make periodic payments would presumptively terminate with upon the remarriage of the claimant, and also in certain cases upon cohabitation.
- Third, the guidelines are intended to generate overall values for the spousal support obligation. Although the rules as presented generate awards of periodic payments that last for fixed or indefinite durations, it is contemplated that they can be replaced, in whole or in part, by a single lump sum payment.
- Fourth, in cases where there are minor children and a concurrent child support claim, it is understood that the spousal support will be calculated first, and that child support will be calculated subsequently based on parental incomes taking spousal support into account.
- Fifth, the Principles' spousal support guidelines are structured to mesh with their proposed principles of child support, which would include within awards of child support amounts to cover some of the indirect costs of post-divorce children-rearing on the earning capacity of the custodial parent.[89a]
Standing back from the detail, what general observations can be made about the ALI guidelines?
In terms of objectives and process, the ALI guidelines are an interesting exercise for those of us in Canada contemplating some sort of guidelines. One of the clear objectives of the ALI was to bring certainty and predictability into an excessively discretionary are of law. Their project involved a clarification of the theoretical bases for spousal support, given the perceived inadequacy of the concept of "need," and then the challenge of crafting practical and easily-administered rules to implement those theoretical constructs. At many points in the discussion of the principles ultimately adopted there is a recognition that the chosen proxies are not perfect. That there is some compromise of theoretical principle is acknowledged, but defended on the basis that the chosen proxies are as close as is "administratively practical."
The ALI Principles are self-consciously an exercise in law reform, but are also an exercise in practical law reform. Throughout, the drafters were conscious of the need to find some anchorage for their recommendations in current practice. The Principles may best be viewed as an exercise in identifying and clarifying emerging trends or best practices, and then building on those. Viewing the ALI Principles as a normative exercise of law reform, some have criticized them for their undue conservatism. The ALI methodology may, however, be a useful template for the Canadian guidelines project, which is directed not at legislative reform, but at the creation of informal guidelines that will reflect current practice.
Structurally the ALI guidelines are interesting for their complexity. Certain types of atypical cases, the short marriages involving significant losses, are expressly excluded and left to individualized decision-making. The income-sharing guidelines are clearly crafted to deal with the range of typical spousal support claims. The guidelines themselves, unlike other American guidelines, delineate two separate bases for claims to income-sharing—financial interdependency that increases with marital duration and earning capacity loss by primary caregivers. This complexity, although theoretically appealing, may ultimately be a deterrent to their adoption. As well, unlike other guideline models, the ALI model makes the quantum of awards sensitive to the duration of the marriage. Patterns in current awards would suggest such a correlation, although it is often not expressly articulated. Making quantum sensitive to marital duration may be of particular importance in Canada, where courts are generally uncomfortable with the use of rigid durational limits, and quantum is the only area where differences in the nature and extent of support claims can be reflected.
Given the structure of the ALI guidelines, the general pattern of support outcomes produced will be:
- very limited or negligible claims in short marriages;
- fairly significant claims in intermediate length and long marriages with children; and
- significant claims in childless marriages only where the marriages have been lengthy.
Beyond these general reflections, what can be said more specifically? In the United States, the ALI proposals are now beginning to generate extensive commentary and debate. Generally, they have been praised by all for their attempt to bring consistency and predictability into an excessively discretionary area of law. Assessing the actual impact of the Principles is difficult given that a number of crucial policy determinations, which will significantly affect the actual amount and duration of awards, are left to states in the implementation of the proposals. However, commentators are in general agreement that the Principles will result in an increase in the number of support awards as measured against current American practice. In particular, it is recognized that granting awards to primary care-givers in intermediate duration marriages, who may well be employed but earning significantly less than their spouses, would be a departure from current American practice. Beyond this, opinion splits.
The most thoughtful analysis of the ALI proposals is provided by June Carbone.[92a] Carbone believes that restitution for lost career opportunities and other marital contributions is the only theoretically justifiable basis for spousal support. She acknowledges all the problematic ways in which the ALI proposals depart from that theoretical framework, despite their attempt to convert alimony into a set of "compensatory payments." However, she concludes, generously, that theoretical coherence may not be the appropriate objective for an exercise in practical law reform, and that the ALI principles offer an appropriate basis for compromise about irreconcilable positions. Other are more critical.
For one group of critics, who believe that compensation for career loss due to marital roles is the only justifiable basis for imposing a support obligation, the ALI proposals have unjustifiably expanded the basis for spousal support. They criticize the ALI proposals both for allowing claims for loss of the marital standard of living unconnected to earning capacity loss and for failing to tie the claim for earning capacity loss more closely to cases where an actual loss has been demonstrated, such as where the primary care-giver is not employed full-time. From this perspective, the ALI proposals are viewed as attaching too many obligations to the status of marriage itself or to some notion of marital commitment. They are seen as too much of an infusion of communitarian norms into the spousal relationship; too much of a departure from norms of individualism.
For another group of critics, the expansion of spousal support entailed by the ALI proposals is a move in the right direction, but a modest one which does not go far enough and will not do enough to alleviate the financial distress experienced by women and children after divorce. The Principles have been criticized for a tendency to mimic current decisional patterns rather than proposing the more radical reforms needed for improvement, and for delegating crucial policy decisions to the state legislatures, which exhibit little enthusiasm for expanding spousal support. On the basis of the examples offered, the levels of support generated by the ALI guidelines have been criticized for being too low, with suggestions being made for the application of higher percentages which would more quickly reach norms of income equalization.
From a theoretical and structural perspective, the Principles have been criticized for basing the marital duration claim on the concept of loss instead of on concepts of contribution and partnership which would view the higher earner spouse's income as a product of the joint efforts of the spouses and thus justify more generous sharing principles. The marital duration claim has also been criticized for its exclusion of marriages of shorter duration (although this is not a real problem given provisions for transitional support and interim support).
Although there are some exceptions, those who favour an expansion of spousal support generally welcome the ALI's explicit recognition of a separate principle of earning capacity loss for primary caregivers, which would extend to working mothers who are secondary earners. However, the structure of the provision and the ways in which it limits the awards have been criticized. For some the problem is the provision's failure to recognize the significant earning capacity loss which primary caregivers who leave the labour force can experience even in short marriages. They would support much more generous transitional awards for all primary caregivers, whatever the length of the marriage, at a level which would wb-eqht living standards for the duration of the transitional period. For others, the problem lies in the failure to recognize the consequences of post-divorce child rearing. From this perspective, support payments are needed to cover the entire child-rearing period, if not beyond, given the unlikelihood that women who compromise workforce participation will ever recover from the loss of earning capacity.
Finally, in terms reminiscent of Canadian debates, the question has been posed of why, if the payments proposed by the ALI are conceptualized as an "entitlement" based on compensation for losses, they should automatically terminate upon remarriage.
From a Canadian perspective, the most relevant features of the ALI Principles are the theoretical and structural ones. If the ALI award levels are too low when judged against Canadian standards, it would be a simple matter to increase percentages. But the prior question is whether the basic structure is an appropriate one. Is eliminating an individualized assessment of the economic impact of a particular marriage and instead simply looking at post-divorce disparities in earning capacity as the basis for entitlement an attractive concept? Is it appropriate to measure earning capacity loss by disparities in post-divorce income? Is the basic distinction between marriages with and without children an appropriate one? Is the basic idea that the amount of awards should increase with the length of the marriage or the child-rearing period a good one?
Some of the critiques of the structure of the primary-caregiver claim would likely resonate in Canada, particularly the failure to take into account earning capacity losses due to post-dissolution child care responsibilities. The ALI sought to deal with these through child support, but in Canada a conscious policy choice was made in the drafting of the child support guidelines to exclude the so-called "indirect" costs of child-rearing from child support and leave them to spousal support.[103a] Thus reliance on the length of the marriage (or the child-care period during marriage) to determine the extent of the spousal support claim may not be appropriate for us in cases where there are still minor children. We need a way to recognize that there can be significant post-dissolution losses even in short marriages with children.
Another striking feature of ALI scheme is its reliance on rigid durational limits. The structure the drafters saw themselves as putting in place was one with generous awards (the generosity of the awards is of course open to debate), but which are limited in duration except in exceptional cases. Such a structure would not appear to be easily transferable to Canada where, as reviewed in Part II above, time-limited orders arbitrarily setting the duration of the support obligation have, to a large, extent, become unacceptable. In Canada it is likely that any system of guidelines would have to retain a significant role for permanent orders and indefinite orders open to subsequent review or variation for reduction or termination of the support obligation. But a clearer sense of appropriate levels of quantum generated by guidelines might assist in determinations of when a support entitlement no longer exists or can be reduced.
The ALI's solutions to the thorny issues of sharing post-divorce increases in income (i.e., no sharing) and the impact of remarriage on support obligations (i.e., automatic termination) would likely be contentious in Canada given the way our law currently deals with these issues.
Finally, in cases where child support is also being sought, the ALI methodology would be inappropriate in Canada given the structure of our child support guidelines. The ALI looks to gross income and calculates spousal support prior to the determination of child support in order to determine parental income levels. Any Canadian spousal support guidelines would need to determine child support first, and then allocate spousal support on the basis of parental incomes not allocated to child support.
In April, 2000 spousal support guidelines were adopted in Maricopa County, Arizona (which encompasses Phoenix and the surrounding areas.) by a local committee attempting to create advisory guidelines that would reflect current practice. What makes the Maricopa county guidelines interesting is that they that are based to some degree on ALI proposals, the conduit for this influence being the presence on the committee of Ira Ellman, who was chief reporter on the ALI project.
The guidelines are not incorporated into any rule of court, and clearly state that they are intended to be advisory only. They aim to "provide the court and parties with a starting point for discussion, negotiation or decision-making" and are explicitly stated not to constitute a presumption. They apply only after entitlement to support has been established under the Arizona legislation, which offers a fairly restrictive basis for support. The Maricopa guidelines thus differ from the ALI proposals, where disparity in income in and of itself would trigger an entitlement to spousal support. The guidelines also apply only to marriages that have lasted longer than five years and where the recipient's gross income is less than 75% of the payor's gross income.
The Maricopa guidelines implement a "simplified" variant of the ALI proposals in that no distinction is made between marriages with and without children, and there is no separate computation for a compensatory payment for primary care-givers. The failure to make such a distinction will likely result in higher awards for childless couples than under the ALI recommendations and lower awards for couples with children.
Otherwise, the basic methodology proposed by the ALI is followed. The guideline amount of support is determined by applying a percentage which reflects the length of the marriage (the durational factor) to the difference in the parties' gross incomes at the time of dissolution. The durational factor selected by the drafters of the Maricopa guidelines was the duration of the marriage multiplied by a factor of 0.015. Thus a twenty year marriage would yield a durational factor of .30, yielding a spousal support award of 30% of the difference between the parties' gross incomes. The durational factor cannot exceed 0.50, which means a cap on awards at 50% of the difference in spousal incomes. Child support is calculated separately, under an income shares formula, after the calculation of spousal support.
Following the ALI proposals, the Maricopa guidelines also offer a formula for determining duration of the awards. Here ,however, the formula generates a range rather than a fixed figure: the length of the marriage multiplied by 0.3 to 0.5. The high end of the range would thus represent one year of support for every two years of marriage, or a duration of half the length of the marriage. Under this formula a twenty year marriage would generate an award with a duration of between 6 to 10 years. The guideline goes on to provide that when the duration of the marriage is twenty years or more and the support recipient is 50 years of age or older at the time of the dissolution the award should be of indefinite duration.
Before finalizing the guidelines, the committee wanted to ensure that the guideline awards reflected current practice and thus conducted extensive empirical research comparing the results under their proposed guideline with awards in a sample of actual cases. With respect to the amount of the awards, the committee found a strong correlation between actual awards and the guideline awards using their proposed factor of 0.015 of the marital duration. With respect to duration of awards, however, their originally proposed factor of 0.60 of the marital duration yielded a very low correlation, hence the downward adjustment to the range of 0.3 to 0.5. Once again, the message is the stringent durational limits on support that are typical of current American practice.
Linda Silver Dranoff, a Toronto family law practitioner, has suggested a spousal support formula that is apparently being used by some lawyers in Ontario.  Her suggested formula loosely draws its inspiration from the Ontario Court of Appeal decision in Andrews, discussed in Part II above. That decision endorsed an award of spousal support that, when combined with child support, left the wife, the residential parent, with 60% of the parties' net disposable income. Rather than "bundling" child and spousal support and dealing with global allocations of household income on a 60/40 basis, which is the "formula" that actually appears to be utilized in Andrews, Dranoff's suggested formula separates out child support first, and then deals with the spousal support claim as a separate claim between the spouses themselves with respect to income not allocated to child support.
Dranoff's formula works with gross income figures. Child support is calculated first and grossed up to reflect the tax consequences. The grossed up amount of child support is then deducted from the payor's income. After child support is removed, remaining spousal incomes are combined and totaled, including the recipient spouse's income from other sources. The formula then divides this income between the spouses according to a specified percentage. The applicable percentage would be determined by "negotiation and give-and-take" or by the court's discretion.
Dranoff uses 50% as an example, but recognizes that discretion comes into play in determining the proportion of income to be shared, creating opportunities to factor in many variables. She suggests for example, that in a long term marriage with several children still at home, 50 or even 60% of the income available after child support is the right proportion, but that where there are no children, or in the case of a second marriage lasting 10 years, the appropriate percentage might be 30%. Using an analysis based on her formula, Dranoff found that the wife in Andrews was left with 39% of the income available after payment of child support. It should be noted that unlike the American guidelines, Dranoff's formula does not apply a specified percentage to the income difference between the spouses; instead the percentage is used to determine the appropriate division of the total income remaining after child support between the parties.
Dranoff's formula has been criticized in some quarters. Some of the criticism springs from a hostility to guidelines of any sort; and some is based upon a misreading of the suggested formula as mandating an equalization of spousal income, whereas the proposal expressly recognizes the possibility of a range of applicable percentages. However, the Dranoff proposal can be criticized for its failure to articulate with any specificity the kinds of circumstances in which significant income-sharing is appropriate—whether it is the presence of children that is the relevant factor justifying a norm of equalization or the length of the marriage. It is not put forward, for example, as a formula that is devised for cases where there are minor children or where there has been a very long marriage. The formula thus leaves itself open to the criticism that it is not appropriate in all cases, and reinforces some of the worst fears about guidelines generating highly inappropriate results because of excessive simplification.
On the other hand, the formula offers a methodology which might well be appropriate in certain kinds of cases, particularly cases like Andrews where there are minor children. The Andrews development has no counterpart in American spousal support law, and is therefore not taken into account under current American guidelines, or even under the ALI proposals. If this is seen to be a significant development that should be supported, Canadian guidelines will have to be crafted to reflect it.
Where does this review of different experiments with spousal support guidelines take us in terms of the project at hand?
The challenge in developing guidelines is how to translate basic principles or theories into proxies which generate "average" or "approximate" justice. Most guidelines are structured around income-sharing as a methodology (i.e., a methodology which is based on the post-divorces incomes of the parties and on sharing a specified portion of that income). A crucial threshold issue in any attempt to create guidelines is whether that methodology can be accepted. This involves eliminating budgets as a primary determinant of spousal support outcomes as well as abandoning any focus on individualized estimates of earning capacity loss.
Once income-sharing is accepted as a methodology, the crucial question is what factors will structure income-sharing. The review of existing guideline models in Part IV raises some basic structural issues:
- Should the main structural factor be length of marriage (as in many American guidelines) or should the presence or absence of children also be important?
- If the presence of children in the marriage is to be a relevant "structural" factor, is it relevant because during the marriage one spouse may have assumed disproportionate responsibility for child care? Or is the relevance that there are dependent children at the time of divorce for whom the spouse claiming spousal support has on-going custodial responsibility?
- More generally, to what extent can/should guidelines be structured to respond to diversity of fact situations? Guidelines strive to reduce the number of relevant factors to serve the goals of administrative efficiency. Yet talk of guidelines generates real fears about "one size fits all" formulas. Some fear the reduction of support to the lowest common denominator if we follow American guidelines. Others assume that guidelines inevitably involve an equalization of incomes model across the board. Making children a relevant factor (see (a) and (b) above) is one way of increasing responsiveness to diversity. Another important structural component may be the "durational factor," used in both the ALI proposals and the Maricopa County guidelines, that links quantum of support to the length of the marriage.
- Under the American guidelines durational limits are an important mechanism for structuring the extent of the support obligation in US. Is it possible to contemplate guidelines with durational limits in Canada, or is quantum the only factor that guidelines can realistically address? How do quantum and duration interact? Does uncertainty of duration require some downward adjustment of quantum?
- How will child support be integrated with any guideline? Some American guidelines, for example, calculate spousal support before child support. Those models are inappropriate in the Canadian context.
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