Spousal Support Agreements or Orders
Couples may make an agreement about spousal support without going to court. An agreement would state the amount of the support agreed upon, and might also contain when the payments will be made. An agreement for spousal support can be filed in Provincial or Supreme Court. Like child support orders, spousal agreements can be enforced through the Family Maintenance Agency (FMA).
Details to Workout
Regardless of the type of payments that are to be made, there are some details that should be worked out when you make an agreement.
- Date payments are made: If they are made periodically (such as monthly or bimonthly) then specify which date every period they are payable and what date the payments are to start.
- Date payments are end : If there is an end date make sure to specify it.
- Circumstances that end support: Parties can agree that when an event occurs such as one party starts receiving pension or remarries, spousal support payments end.
- How payments are made: This could be anything you agree to together such as post-dated cheques, cash, or e-transfers.
- Annual exchange of financial information: You can agree to share copies of your income tax returns for the previous year by a specific date each year.
- Reviewable: If you want to review the terms you should set out when those reviews are to occur. E.g. review to be done every June 1st.
DIY
Take a moment to fill in the Spousal Support Worksheet
Resources
If you have a pre-marital, marriage, or cohabitation agreement, be sure to know what it says about spousal support. These agreements can limit your entitlement to spousal support. If you signed an agreement that waives your right to spousal support, you won’t be able to claim it without showing the agreement is invalid. Consult a lawyer if you have concerns about these agreements.
Changing Orders or Agreements
It is almost always possible to apply to change an order for spousal support or to renegotiate a separation agreement as long as there has been a change in circumstances since the order or agreement was made.
Recipients might want to change an order or an agreement:
- If their spousal support payments are going to end but their financial situation hasn't improved,
- If their financial situation has worsened and they need more support than they did before, or
- If something unexpected has happened, like an illness or an accident, that causes them to need support.
Payors usually want to change things:
- Their financial situation unexpectedly worsens,
- If the recipient finds work or gets better-paying work,
- If the recipient enters a new spousal relationship,
- If the recipient's financial situation unexpectedly improves, or
- If they have a new legal obligation to support someone else.
If the parties can't agree about if or how a support order should be changed, they will usually have to make an application in court to vary the order. Couples with an agreement often try to negotiate a change and only go to court if they can't agree on the change.
Both parties want to know when spousal support will end. The FLA says that agreements and orders for spousal support can be reviewable. It can specify the event that will trigger the review, the dispute resolution process that will be used for the review and the factors that will be considered at the review. The FLA also says that a review can be triggered when someone begins to receive a pension even if the original order did not call for a review.
Spousal Support and Taxes
Spousal support payments are included in the recipient’s total income reported for income tax purposes. Recipients should put some money aside to pay their taxes. A spouse who pays support on a periodic basis is entitled to claim the whole amount of their payments as a deduction against their taxable income.
If a paying spouse wishes to ensure that they can claim spousal support payments as a tax deduction, the court order or written agreement which addresses spousal support must clearly state that the payments are for spousal support and the payments must be periodic rather than paid in a lump sum; otherwise the federal Income Tax Act requires the payment to be treated as child support payments. Also all payments for child support must be fully paid for the current or previous year.
Self-Rep’s Tips
Speak to a financial advisor or an accountant to discuss how spousal support affects your tax obligations.
Third Party Payments
Sometimes spouses negotiate third-party payments, where payments are made directly to a third party instead of the spouse. Examples would be mortgage or car payments made on behalf of the eligible spouse. Third-party payments may be deductible to the payor, and taxable to the recipient, in the year of payment if certain conditions are met.
After Payor’s Death
The parties can agree and the court can order that the payor’s obligation to pay spousal support will continue after the payor’s death and that it be paid from the estate. If the payor has a life insurance policy then the parties can agree and the court can order that it be kept up to date and that the recipient be named as the beneficiary of the policy so that support can continue if the payor dies.
Get Independent Legal Advice Before Signing an Agreement
Spousal support can get complicated when a separating couple is in conflict. Even when there is no conflict, it is a good idea to get legal advice before you sign an agreement – especially an agreement that will impact your standard of living for years to come. The Resources section provides information about getting legal help.
Attention
You may ask the court for temporary spousal support with an Interim Order. Financial support may be necessary for the time before you get to court if you are facing a long wait before your trial date.
