Spousal Support Advisory Guidelines: The Revised User's Guide

18 Self-sufficiency and Termination

The issue of “self-sufficiency” comes up in almost every spousal support case, apart from cases where the recipient is disabled or aged. There is constant reference in the case law to s. 15.2(6)(d) of the Divorce Act, that fourth objective: “in so far as practicable, promote the economic self-sufficiency of each spouse within a reasonable period of time.”

Self-sufficiency is not “a SSAG issue”, strictly speaking. Self-sufficiency requires an individualized determination of the position and prospects of the recipient, an exercise not amenable to guidelines. It requires careful analysis of this particular relationship, this payor and this recipient at this point in time. The law of self-sufficiency is canvassed in Chapter 13 of the SSAG and there is little new to add here. We offer a few new cases, but only as examples, as the case law is substantial, with about 260 reported decisions a year mentioning self-sufficiency.

Self-sufficiency is only one of the four objectives stated in s. 15.2(6), said the Supreme Court of Canada in Leskun v. Leskun, 2006 SCC 25, and a qualified one at that. There is no absolute “duty” on a former spouse to become self-sufficient.

We should note here at the beginning that “self-sufficiency” can mean different things in different contexts. These many different meanings of “self-sufficiency” can confuse the analysis. Sometimes it is simply a conclusion about entitlement and outcome, i.e. spousal support should terminate and the recipient will have to be “self-sufficient”, relying only upon her or his own resources. Sometimes it is used as part of the compensatory analysis, i.e. the recipient has overcome her or his economic disadvantage and has returned to where the recipient would have been in the paid labour market. Sometimes it is used in a non-compensatory fashion, i.e. the recipient is now able to meet her or his own needs and achieve the appropriate standard of living. For an excellent review of self-sufficiency and its different meanings see Fisher v. Fisher, 2008 ONCA 11.

There are two central issues within “self-sufficiency” which we will examine in turn:

(a) Reasonable efforts to achieve self-sufficiency

Moge reminded us all of some important lessons about self-sufficiency: courts must be realistic about self-sufficiency; courts must not underestimate the labour market disadvantages faced by recipients returning to work; and courts should not be too quick to “deem” or “predict” that recipients will achieve self-sufficiency in future. Recent appellate decisions have demonstrated this flexible approach towards self-sufficiency: Remillard v. Remillard, 2014 MBCA 304 (trial judge setting 5 year time limit and imputing income after 11-year marriage with special needs child; overturned on appeal; trial judge over-emphasizing self-sufficiency, unrealistic to expect wife to work or to achieve self-sufficiency in 5 years); Reisman v. Reisman, 2014 ONCA 109 (20-year marriage; insufficient efforts by wife, trial judge low end of range, income imputed, and 10 year time limit; time limit overturned on appeal, support indefinite, actually high end of range for first ten years, low end after); Jendruck v. Jendruck, 2014 BCCA 320 (34-year marriage, discussion of obligation to earn some income even if full self-sufficiency not attainable; half of minimum wage imputed to wife); and K.D. v. N.D., 2011 BCCA 513 (impact of post-separation events on wife’s self-sufficiency efforts).

In Chapter 13 of the SSAG, we canvassed the common methods of encouraging self-sufficiency. (And here we use the term “self-sufficiency” in the sense of the obligation on the recipient spouse to make reasonable efforts to contribute to his or her own support, either through earned income or use of assets.) The most common, and most flexible, method is imputing income to the recipient, with the other methods used less often, more tailored to specific situations.

There can be dangers in using multiple methods to encourage self-sufficiency, for example if you impute a substantial income and also go low in the range or order a step-down, both of which imply an ability to earn more income.

(b) Self-sufficiency and termination of support

Once the recipient has become “self-sufficient”, then spousal support can be terminated. Most often the issue of termination arises on variation or review. But in some cases under the without child support formula and the custodial payor formula initial orders can be time-limited, reflecting a judgement about self-sufficiency. The reported case law is full of applications to vary or review where the payor seeks the termination of spousal support on the basis that the recipient has become self-sufficient or would be self-sufficient if reasonable efforts had been made.

In some cases there may be an immediate termination; more often the court will decide “not yet”, but the amount of support may be reduced (as income is imputed to the recipient) or termination will be set at some future date by way of a time limit (perhaps combined with a step-down) to provide a defined period of time for the final transition to self-sufficiency. In some cases where spouses have made insufficient efforts towards self-sufficiency, support will be terminated on the basis that sufficient time has been allowed for self-sufficiency to be achieved: see Aspe v. Aspe, 2010 BCCA 508 and Bosanac v. Bosanac, 2014 ONSC 7467. Decisions about termination involve individualized, fact-based determinations of duration within the durational ranges set by the Advisory Guidelines, which do contemplate an eventual termination of support in many cases.

It is in the termination context that the many different meanings of self-sufficiency that we outlined above become most apparent. Conceptions of self-sufficiency are intertwined with ideas of entitlement. Termination means the end of entitlement. A finding of “self-sufficiency” often reflects a conclusion that there is no continuing entitlement—that disadvantage has been overcome and/or that there is no further “need”. The meanings of “self-sufficiency” can thus vary depending on whether the basis of entitlement is compensatory or non-compensatory. In some contexts “self-sufficiency” will be assessed against the marital standard of living; in other contexts the recipient will be found to be “self-sufficient” despite having a significantly lower income than the payor.

The most extensive discussion of these varying meanings of “self-sufficiency” can be found in the Ontario Court of Appeal’s decision in Fisher v. Fisher, 2008 ONCA 11 at paragraphs 52-55, which were recently summarized as follows in Friesen-Stowe v. Stowe, 2015 ONSC 554:

[25] Paraphrasing our Court of Appeal in Fisher v. Fisher (2008), 88 O.R. (3d) 241, self-sufficiency is a relative concept. It is not achieved simply because a former spouse can meet basic expenses. A determination of self-sufficiency requires consideration of the parties' present and potential income, their standard of living while married, the efficacy of any suggested steps to increase a party's means, the parties' likely post-separation circumstances including the impact of equalization and the duration of cohabitation. Self-sufficiency is often more attainable in short term marriages, particularly ones without children, where the lower income spouse has not become entrenched in a particular lifestyle, or compromised career aspirations. In such situations, the lower income spouse is expected to have the tools to become financially independent or to adjust his or her standard of living. In contrast, in most long term marriages, particularly in traditional long term ones, the parties' merger of economic lifestyles creates a joint standard of living that the lower income spouse cannot hope to replicate, but upon which he or she has become dependent. In such circumstances, the spousal support analysis typically will not give priority to self-sufficiency because it is an objective that simply cannot be attained. (paras 52-55)

Given these multiple meanings of self-sufficiency, it is best to examine the case law on self-sufficiency and termination under the different formulas of the SSAG. Much of the material we address here is also covered in the separate sections of this User's Guide dealing with duration and time limits under each of the formulas and we refer you back there as well.

(i) Time limits and termination under the “without child support” and “custodial payor” formulas

The without child support formula generates time limits for marriages under 20 years in length, with the exception of those that fall under the “rule of 65”. Leaving aside “crossover” cases, which will be discussed below, the cases which engage the time limits will generally be short and medium-length marriages without children where the basis for entitlement is strictly non-compensatory, i.e. based on need and standard of living.

In some cases courts will impose a time limit in an initial order, most often in short marriages.  In these cases the initial time limit sets a period of transition to self-sufficiency. “Self-sufficiency” in this context simply captures the idea that entitlement ends. At the end of a relatively short period of time the recipient is expected to be self-reliant and self-sufficient. The purpose of the period of transitional support is to allow the recipient to adjust to the loss of the marital standard of living; see Fisher v. Fisher, 2008 ONCA 11 (front-end loaded support for 7 years after 19-year marriage where basis of entitlement largely non-compensatory and wife had employment; transition to self-sufficiency in this context understood as period of time for wife to adjust her standard of living to her own income).

In cases involving medium-length marriages under the without child support formula, the initial or previous order is often “indefinite”, but as the recipient works toward self-sufficiency, time limits will be considered, e.g. see Gammon v. Gammon, [2008] O.J. No. 603 and [2008] O.J. No. 4252 (S.C.J.) (15-year relationship with no children, separation 2004, initial order no duration specified, variation application after husband retires, amount reduced using SSAG and termination date set 10 years after separation in 2014) and Lawder v. Windsor, 2013 ONSC 5948 (16-year relationship with no children, initial order indefinite, wife finds steady work and achieves self-sufficiency, termination after 16 years support). In these cases “self-sufficiency” carries a double meaning. Recipients are given time to improve their earning capacity and overcome disadvantage from the breakdown of the marriage and the loss of the marital standard of living. But the time limits reflect an understanding that at some point entitlement ends, and recipients will be found to be “self-sufficient” at the standard of living they can sustain on their own resources. As Fisher shows, entitlement to non-compensatory support does not involve a permanent guarantee of the marital standard of living in these medium -ength marriage cases. See also Rezansoff v. Rezansoff, 2007 SKQB 32.

The custodial payor formula uses the same time limits as the without child support formula and similar approaches to self-sufficiency and termination apply: see Aspe v. Aspe, 2010 BCCA 508 (12-year marriage, 3 children, custodial payor, wife had received support for 16 years, insufficient efforts toward self-sufficiency, 2 more years). However, some cases of short and medium length marriages under the custodial payor formula may involve compensatory claims as well as non-compensatory, which will shape the meaning of self-sufficiency and the duration of support.

(ii) Time limits and termination under the “with child support” formula and in crossover cases

Time limits under the with child support formula are “softer”, with initial orders “indefinite” and time limits coming later through variation or review, perhaps not until a “crossover” to the other formula. Under this formula concepts of “self-sufficiency” will be shaped by the strongly compensatory nature of many of the claims. For marriages shorter than 20 years, it is anticipated that at some point the economic disadvantages of the recipient will be fully compensated and, if there is no non-compensatory claim left, a time limit will be imposed and spousal support terminated. At that point the recipient will be seen as “self-sufficient” on the basis of his or her own income: see Tadayon v. Mohtashami, 2015 ONCA 777 (16-year marriage with two children, crossover, application to vary agreement, wife intentionally underemployed, 2 year time limit imposed, 16 years total; husband earning over $350,000 and wife imputed at $48,000).

As Tadayon shows, many cases under this formula or those that “cross-over” to the without child support formula involve significant compensatory claims and, as a result, duration ends up at the longer end of the durational ranges generated by this formula: see also Bosanac v. Bosanac, 2014 ONSC 7467 (14.5-year marriage, crossover, support had been paid for 17 years, wife making insufficient efforts, income imputed, two more years, step-down).

Many payor requests to time-limit or terminate support under this formula on the basis of self-sufficiency are denied because it is too soon: see Bockhold v. Bockhold, 2010 BCSC 214 (17-year marriage; review 10 years after separation, crossover, wife not making reasonable efforts, minimum wage imputed, support continued, unlikely wife would be self-sufficient in foreseeable future given 17 years out of labour force combined with disability) and Remillard v. Remillard, 2014 MBCA 304 (trial judge setting 5 year time limit and imputing income after 11-year marriage with special needs child; overturned on appeal; trial judge over-emphasizing self-sufficiency, unrealistic to expect wife to work and to achieve self-sufficiency in 5 years).

But in some cases, support has been terminated at a point well short of the longer end of the durational range because the wife was found to have become self-sufficient: see Mills v. Elgin, 2009 BCSC 1607 (15-year relationship with 3 children; spousal support terminated on variation application 6 years after separation when husband earning $100,000 and wife earning $46,000); Price v. Price, 2010 BCCA 452 (13-year marriage with 3 children, spousal support terminated on variation 8 years after separation, husband earning $145,000 and wife earning $54,000 as business manager); and Holman v. Holman, 2015 ONCA 552 (termination 11.5 years after 19-year marriage with three children; husband earning $130,000 and wife $60,000 plus her $300,000 inheritance). In principle, these should be cases where recipients have suffered less disadvantage and leave the marriage with marketable skills and good employment prospects.

 (iii) Self-sufficiency and termination in long marriages or cases covered by the “rule of 65”

For marriages of 20 years or longer or cases caught by the “rule of 65” the Advisory Guidelines provide that support will be “indefinite (duration not specified)”. But the Advisory Guidelines stress that even in these cases “indefinite” does not necessarily mean “permanent”. Support may not only be reduced to take into account the recipient’s efforts towards self-sufficiency, but also terminated if self-sufficiency is attained. On particular facts, entitlement may end, even in these cases: see LeBlanc v Yeo 2011 ONSC 2741  (termination 20 years after 20-year marriage where wife very young at separation and had made no efforts towards self-sufficiency); Ludmer v. Ludmer 2013 ONSC 784, upheld at 2014 ONCA 827 (10 to 11 years of support after 20-year marriage, wife worked at profession throughout marriage, earning $84,000); Friedl v. Friedl, 2012 ONSC 6337 (10 years of support after 25-year marriage; wife worked as teacher throughout marriage, earning $102,522, husband dentist earning $277,000); and Lalonde v. Lalonde, 2014 ONSC 4925 (support terminated 10 years after 25-year marriage with 3 children, husband $160,000, wife $33,000 but repartnered).

However, following Moge and Leskun, courts recognize that in many of these long marriage cases (or cases involving older recipients) complete self-sufficiency will not be attainable. In the words of Leskun, there is no “duty” to become self-sufficient. The obligation on the recipient is to make reasonable efforts to contribute to his or her own support (or have income imputed), but then top-up support will often still be in order. In long marriage cases where there were children, support will be awarded on both compensatory and non-compensatory grounds. Often there will be significant economic disadvantage that will be difficult to overcome completely. As well, in these long marriage cases with a long history of interdependence, “need” (and hence self-sufficiency) will be measured against the marital standard of living (see Fisher v. Fisher, 2008 ONCA 11).

For a nice example of a long marriage case at the trial level where the court found that the wife was not yet self-sufficient, see Brown v. Brown, 2013 NBQB 369 (29-year marriage, variation application 11 years after separation, wife had found employment earning $40,000, husband’s income $80,000, support reduced but not terminated, extensive discussion of meaning of self-sufficiency). For cases at the appeal level, see Reisman v. Reisman, 2014 ONCA 109 (20-year marriage; insufficient efforts by wife, trial judge low end of range, income imputed, and ten year time limit; time limit overturned on appeal, support indefinite; actually high end of range for first ten years, low end after) and Jendruck v. Jendruck, 2014 BCCA 320 (34-year marriage, discussion of obligation to earn some income even if full self-sufficiency not attainable; half of minimum wage imputed to wife).