In today’s blog we will be digging deeper into spousal support, specifically where one spouse retires.
Why does retirement matter where spousal support is being paid?
Very briefly, spousal support can be changed in one of 2 ways – either by doing a “review” of support, or a “variation” of support.
In the context of retirement, spousal support could be “reviewed” if the court order or agreement actually states that support is to be reviewed when one spouse retires. So essentially, it’s provided for in the documentation.
For a “variation”, the applicant wanting the change would have to prove that there’s been a “material change of circumstances” since the original order was made or agreement was reached. Retirement could certainly be considered such a material change of circumstances depending on the facts.
I thought this would be an interesting topic given that there’s a 2022 decision from the Court of Queen’s Bench of Alberta called Kelly v Gammon which addresses this very topic of the impact of retirement on support.
How do you know if retirement is actually a “material change of circumstances”
The opening question in the decision in Kelly v Gammon 2022 ABQB 57 is exactly this – the court had to decide whether retirement was reasonable in the circumstances so as to result in a material change warranting a change to spousal support. The answer here was yes. Allow me to explain.
In this case, the paying spouse’s income at the time of the original order was $186,000, and at the time of the original order it had been contemplated that retirement was on the horizon and that this event happening would meet the materiality test.
The question then became: was the timing and the circumstances of the retirement defensible, or was it done to circumvent his spousal support obligation.
What goes into that defensibility of retirement?
There’s a number of cases that go into this question of defensibility. I thought I would give a few examples of where the court has accepted retirement as reasonable:
- A payor’s lifelong plans for retirement – the court said in the case of Lewis v Lewis 2009 ABQB 539 that ““[t]he decision of when to retire from a life-long career is a personal matter into which the Court should not interfere without exceptional circumstances” (para 13).
- Evidence that the payor qualified to take their full pension – On the flip side to this, depending on the circumstances the choice to take early retirement could work against the payor looking to change support.
- The discussions during the relationship as to retirement plans – The court in Kelly v Gammon states (para 32) that it’s not reasonable to have had plans during the relationship to retire at a certain age, then argue that those plans are no longer reasonable post-separation.
If retirement is a “material change of circumstances” then what?
If so, then the question then becomes what to do with the support award – reduce it? terminate it? Put a limitation on it? There are a few options of course.
The question really comes down to whether the court will accept that retirement is reasonable and justified in the circumstances.
If so, the question is what is the income of the paying spouse post-retirement, and then how much, if anything, will be payable going forward.
If not, then the court can set an income level that it deems as reasonable for the purpose of spousal support, pretending as if the paying spouse was not retired. The calculations for the future of spousal support can then be done.
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