Do I Have to Pay Spousal Support When I Retire?

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As more and more “baby boomers” approach or enter retirement, the question of whether or not spousal support payments must continue after retirement is crossing the desk of every family lawyer in Canada. As with most family law matters, the answer to this question is—it depends. There are multiple factors that influence whether or not an individual will have to continue making full or reduced spousal support payments once he/she has retired.

Calculating and awarding spousal support is a complex matter, as is determining whether payments should continue following major life changes. Let’s start by pointing out one very important fact—retirement alone is not enough to automatically stop or reduce spousal support payments. Every situation is unique, and the outcome of your particular case will largely depend on the reason for retirement, whether or not you or your ex-spouse has re-partnered, the paying spouse’s ability to continue making payments, and a laundry list of other factors.

Does the Retirement Constitute a ‘Material’ Change?

Under the Divorce Act, requests to changes in spousal support arrangements must be due to a “material change in the means, needs, conditions, or other circumstances of either party.” The burden to prove that a “material” change exists is placed on the person seeking the change in payment.

If an individual is approaching retirement, he/she may apply to have spousal support payments reduced or stopped, prior to the actual retirement date. However, timing is important; having an actual date and being able to show that retirement is a certainty and not speculative is necessary for a successful application. Giving the receiving spouse advance notice and being considerate of his/her financial situation will also positively frame the application in the court’s eyes.

Reason for Retirement

The number one question when it comes to the topic of support payments following retirement is whether the retirement was voluntary or forced. Let’s say Gretchen and Larry divorced six years ago and Gretchen has a court order to pay Larry $2,000 per month in spousal support. At 62, Gretchen is at the height of her career but wants to fulfill a lifelong dream of moving to the Seychelles, writing poetry, and trying her hand at organic farming. Does Gretchen have to continue making $2,000 monthly spousal support payments to Larry?

In Canada, the courts will analyze each unique situation to determine whether the retirement is forced or voluntary, whether the payor can seek new employment, and whether the retirement is solely the means to an end of support payments. In the scenario above, it seems unlikely that Gretchen’s early retirement will justify an end to support payments, but there are too many unknowns to say for certain. Is she suffering from such high stress that her therapist advised her to quit working immediately, lest she suffer a mental breakdown or stroke? With regard to spousal support, the devil is in the details. 

Is the Retirement Voluntary or Forced?

When someone chooses to retire, rather than being forced out, spousal support payments are less likely to be stopped or reduced. When it comes to certain financial obligations, people can’t just retire because they feel like it. This is especially true if the court believes the retirement is motivated by a desire to stop paying spousal support.

Is the Retiree Suffering from Health Problems?

When a medical condition negatively impacts an individual’s ability to perform the duties of his/her job or another position for which they are qualified, spousal support payments may be reduced or stopped. But this will be decided on a case by case basis and won’t occur automatically. Anyone wanting to stop support payments due to health-related retirement will need to provide documentation, including diagnosis and long-term prognosis, as well as the expected impact on his/her ability to continue working.

The Big Picture

In addition to the reason for retirement, courts will consider factors such as whether or not the paying spouse has re-partnered, and the financial situations of both the payor and recipient of spousal support. Basically, it comes down to the ability to pay. The courts are tasked with analyzing all circumstances of each request for a change in support payments. Income and assets, including that of a new partner, will likely be considered.

If the individual responsible for paying support has re-partnered with someone of financial means, this may result in an order to continue full or partial payments, even after retirement. In fact, a high-net worth partner may result in the decision to increase payments. If, however, the new partner has little to no income or assets, this may bode well for the payor’s desire to stop or reduce support payments.

Seek Experienced Legal Counsel

Regardless of the situation, a request to change spousal support should not be attempted without the help of an experienced family lawyer, such as the team from Vogel LLP. There are so many variables to consider, and a skilled lawyer will understand how to position you for the best possible outcome. The same is true if you wish to challenge your ex’s application to stop or reduce support payments on which you depend.

August 6, 2020 · Tim Kevan · Comments Closed
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