Spousal Support and Covid-19
The economic effects of the Covid-19 pandemic have resulted in job losses and income decreases for many people. What happens to a person’s spousal support payments when a payor has been laid off and is collecting Employment Insurance? What if a recipient of spousal support is unable to re-enter the work force as a result of a restricted job market? Should you include CERB benefits in your support calculation? This article will outline some of the issues that spousal support payors and recipients may face and will suggest some possible options to address the issues.
What is spousal support?
Spousal support is money that one spouse may have to pay another spouse upon separation. The spousal support obligation applies to both the breakdown of a marriage and a common-law relationship. There are many factors that are assessed in determining whether spousal support is payable, the amount of the support, and the length of time support is payable. Spousal support terms are usually set out in a Separation Agreement or a court order.
What if I have been laid off a result of Covid-19?
If you are the payor of spousal support due to an agreement or a court order, your obligation to pay spousal support continues until you are able to get an agreement or order changing the spousal support amount. You should contact the recipient immediately and try to come to a new agreement. This can be done directly with the recipient, or through your lawyer. It is important to continue to make the support payments until a new agreement is reached.
If you collect Employment Insurance, you may still be obligated to continue your support payments. You should speak with a lawyer to find out if you remain obligated to pay spousal support at a lower amount, or at all.
What if I receive spousal support and have been laid off?
Recipients of spousal support are often employed and therefore receive employment income. Since the total income of the payor and the recipient are included in the spousal support calculation, a recipient might be entitled to an increased spousal support payment if he or she is laid off. A recipient who has experienced a decrease in their income should contact the payor immediately and try to come to a new agreement. Again, the agreement may be worked out directly between the parties, or with the assistance of lawyers.
What if I have a Family Maintenance and Enforcement Account?
The Family Maintenance and Enforcement Program, or FMEP, is a government service that collects and monitors both child support and spousal support payments. If either party has registered their agreement or court order with FMEP, the agency will take steps to collect the support set out in the agreement. It is very important to let FMEP know if a new support court order or agreement has been made. FMEP will continue taking steps to collect support in accordance with the order or agreement that has been registered and any overdue payments will accrue interest. FMEP can place holds on driver’s licenses and passports, garnish wages, and put a lien on real estate if an account remains in arrears. If you have any concerns about your FMEP account, you should contact a lawyer immediately to discuss your options.
Are my CERB benefits included in my spousal support calculation?
A person collecting Canada Emergency Response Benefit, or CERB, should include these benefits in their income for the purposes of spousal support whether they are the payor or the recipient. Almost every type of income is to be included in a person’s total income in order to calculate spousal support, which is called their Guideline Income. A special set of rules is used to calculate a person’s Guideline Income. This means that the income used to calculate spousal support payments may be different than what the income would be on an income tax return.
In conclusion, it is important to ensure that any changes to spousal support payments are set out in a written agreement or a court order. If you are a payor or recipient of spousal support and your income has changed as a result of Covid-19, contact your lawyer to see if your spousal support payment should be changed.
© Linley Welwood LLP. The contents of this article do not constitute legal advice. Readers should seek legal advice in relation to their own specific circumstances.