Spousal Support Advisory Guidelines: The Revised User's Guide
2 Common Errors to Avoid
After more than ten years, errors are still being made in the use of the SSAG, some major, some minor, and some with a disturbing frequency. In this edition of the User’s Guide, we decided to gather these “common errors” in one place, at the beginning, as a handy checklist of “what not to do”. Many of these are discussed in more detail in the relevant sections of this User’s Guide. Here we are just identifying and listing them, framed in positive, encouraging terms wherever possible.
(a) Know your inputs and assumptions. Be transparent! Too often lawyers have calculations done by others: by law clerks, assistants, articled clerks or junior lawyers. Lawyers need to know the input data, and the assumptions used, to generate the SSAG ranges and other numbers, whether in negotiations, mediations, judicial settlement conferences or hearings and trials. Think of this as part of the family law lawyer’s duty to colleagues and courts, to know the law and to be forthright about it.
(b) Remember entitlement. We can’t say this too often: the SSAG only deal with amount and duration, after there has been a finding or agreement on entitlement to spousal support. It is wrong to “just run the numbers”.
(c) Use the correct incomes. In the course of negotiation or hearing, there may be a different conclusion on the incomes to be used than the assumptions that underpinned the original SSAG calculations. Be sure that the SSAG calculations are based on the correct incomes.
(d) Social assistance should NOT be treated as income for spousal support purposes. This error continues to appear in decided cases, especially in determining the income of the recipient. It is complicated by provinces like Ontario calling social assistance “ODSP” (Ontario Disability Support Program) or “Ontario Works” or Alberta calling it “AISH” (Assured Income for the Severely Handicapped). Including social assistance in the recipient’s income will result in the underpayment of spousal support.
(e) Be alert to non-taxable income issues. Non-taxable incomes need to be grossed up under the without child support formula or the custodial payor formula. There is also an exception for spousal support paid by a payor whose income is mostly or all non-taxable.
(f) Use the right formula. The dividing line between the two main formulas is clear: either with child support or without child support. The with child support formula is actually a collection of formulas, depending upon the custodial and child support arrangements. Often missed is the custodial payor formula or adult child formula.
(g) It is the length of cohabitation that must be used in determining amount or duration, not the length of marriage alone, under the without child support formula and the formulas that are built around it—the custodial payor and adult child formulas.
(h) Section 7 expenses must be taken into account under the with child support formula. This continues to be the single most common and most significant mistake under the SSAG. The failure to consider s. 7 contributions will inevitably lead to the payor paying too much spousal support, possibly way too much if the s. 7 expenses are substantial.
(i) The custodial payor formula must be adjusted if child support is not paid by the spousal support recipient to the custodial payor. Quite often the higher-income payor of spousal support will not claim child support from the lower-income recipient of spousal support. You need to know whether the lower-income recipient of spousal support is or is not paying child support. If he or she is not, but no adjustment is made, the payor will be paying too much spousal support.
(j) Don’t just state the ranges, suggest a location on amount, and duration. The SSAG ranges are fairly wide. It is the task of the lawyer (or a party) to justify a location for amount or duration. A straight positional approach is also an error, e.g. the claimant spouse argues for the high end on amount for the longest duration possible, without explanation, while the payor spouse just seeks the low end of the ranges.
(k) Remember duration. Too often the focus is only on the amount of support. In some cases, the SSAG will suggest “indefinite (duration not specified)”. But in many cases, either initially or on variation and review, duration will be in issue.
(l) Lump sum spousal support must be discounted for tax. A lump sum, whether as part of a final settlement or for retroactive spousal support, will not be tax deductible for the payor or tax payable for the recipient, and thus any lump sum amount determined using the SSAG ranges for periodic amounts must be discounted or reduced to reflect that tax fact.
(m) Remember the exceptions. The SSAG formulas were developed to deal with typical cases. There will be cases where the formula outcomes just don’t seem right. We have identified 11 such exceptions in Chapter 12 of the SSAG. But these exceptions do not exhaust the circumstances in which departures from the formula ranges might take place. Unusual facts may justify going beyond the listed exceptions.
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