How to Draft a Fair Spousal Support Clause in Ontario

Understanding Spousal Support in Ontario

When drafting a spousal support clause in Ontario, it is important to understand the purpose and the legal framework that guides these obligations. Spousal support is not simply about providing financial assistance—it is about fairness and ensuring that both spouses can move forward on stable ground after a separation or divorce.

Purpose of Spousal Support

Spousal support in Ontario serves several purposes:

• Compensatory Support – To address any economic disadvantages suffered by one spouse as a result of the marriage or its breakdown. For example, a spouse who left the workforce to raise children may be entitled to support.
• Contractual Support – Where spouses have agreed to terms in a marriage contract, separation agreement, or cohabitation agreement, spousal support may be based on those commitments.
• Needs-Based Support – To ensure that a spouse who cannot meet their reasonable needs due to the marriage breakdown receives financial assistance, particularly when there is a large income gap between spouses.

Legal Framework

Spousal support in Ontario is governed by two key statutes:

• Ontario Family Law Act (FLA) – This applies to both married and common-law couples living in Ontario. It outlines when support may be ordered and how courts determine entitlement.
• Divorce Act (Canada) – This federal law applies to legally married couples who are seeking a divorce. It sets out similar principles but provides the legal framework for cases involving marriage dissolution at the federal level.

Both statutes emphasize fairness and the need to prevent economic hardship caused by the breakdown of a relationship. Courts often use the Spousal Support Advisory Guidelines (SSAGs) as a practical tool for calculating support amounts and duration, though these are not legally binding.

Eligibility

Not every spouse automatically qualifies for spousal support. Eligibility depends on the circumstances, including:

• Married Spouses – A legally married spouse can claim support under both the Divorce Act and the Ontario Family Law Act.
• Common-Law Spouses – In Ontario, a common-law partner may be entitled to spousal support if they lived together for at least three years or were in a relationship of some permanence and had a child together.
• Factors Considered – Courts assess the length of the relationship, roles during the marriage or partnership, financial need, and the other spouse’s ability to pay.

Using the Spousal Support Advisory Guidelines (SSAGs)

Determining Amount

The SSAGs use mathematical formulas that consider the income of both spouses and, where applicable, child support obligations. These formulas generate a suggested range of monthly payments, providing a low, mid, and high figure. For example, in cases where one spouse earns significantly more, the formula ensures that the lower-income spouse receives adequate support without creating an undue burden on the higher-income spouse.

Duration of Support

The length of time spousal support should be paid depends on several factors outlined in the SSAGs:

• Length of the Marriage or Relationship – Longer relationships typically result in longer support obligations.
• Presence of Children – If the recipient spouse is caring for young children, support may be extended to help maintain stability.
• Financial Independence – The duration may be reduced if the recipient is likely to become self-sufficient sooner through employment, education, or retraining.

In some cases—especially after long marriages—support may even be indefinite, subject to future review.

Range vs. Negotiated Amount

While the SSAGs provide a helpful framework, they are not rigid rules. The actual spousal support figure included in an agreement may differ from the SSAG mid-point for several reasons:

• Unique Circumstances – Health issues, career sacrifices, or unusual financial arrangements may justify a higher or lower amount.
• Negotiation Between Parties – Spouses may agree to an amount that falls outside the guideline range if it better fits their situation.
• Judicial Discretion – Courts retain the power to order support amounts that reflect fairness, even if those amounts deviate from the SSAG formula.

Key Elements to Include in a Spousal Support Clause

Amount and Payment Frequency

The clause should specify whether support will be paid as monthly payments or as a lump-sum amount.

• Monthly Payments – This is the most common arrangement, providing the recipient spouse with ongoing financial stability. The clause should clearly state the exact amount due each month and the payment method (e.g., direct deposit, cheque, or through the Family Responsibility Office).
• Lump-Sum Payment – In some cases, a single payment may be preferable, especially when both spouses wish to sever financial ties quickly.

Duration and Review Dates

The clause should outline how long support will continue and include review dates to reassess the arrangement.

• Defined Term – For shorter marriages or situations where the recipient spouse is expected to become self-sufficient, support may be set for a fixed number of years.
• Indefinite Term – For long-term marriages or cases involving ongoing health or caregiving responsibilities, support may continue until a significant event triggers review.
• Review Triggers – Built-in review dates (e.g., every three years) help ensure the arrangement remains fair in light of changing circumstances such as employment, retirement, or shifts in financial needs.

Termination Events

It is equally important to set out the events that will bring spousal support to an end. Common termination clauses include:

• Remarriage or Cohabitation – If the recipient spouse enters into a new marriage or long-term partnership, support may be terminated or reduced.
• Death of Either Party – The obligation to pay or the right to receive support ends upon death, unless life insurance or other arrangements are specified in the agreement.
• Significant Income Change – A material increase or decrease in either spouse’s income can trigger a review or termination of support.

Ensuring Fairness for Both Parties

Full Financial Disclosure

A fair spousal support agreement begins with complete and honest financial disclosure. Both spouses must provide accurate information about their income, assets, debts, and expenses. Without this step, the agreement could later be set aside by a court on the grounds of incomplete or misleading disclosure. By putting all financial cards on the table, both parties can negotiate support terms based on a true understanding of their circumstances.

Considering Tax Implications

Tax treatment can significantly affect how fair a spousal support arrangement feels to each spouse. In many cases:

• Payor Spouse – Spousal support paid monthly is generally tax-deductible, which can reduce the financial burden.
• Recipient Spouse – Monthly payments are typically taxable income, meaning the actual benefit may be less than the gross amount received.

Lump-sum spousal support, however, is usually not deductible for the payor and not taxable for the recipient. Including a clause that acknowledges these tax implications ensures that both parties understand the net impact of the agreement.

Balancing Needs and Ability to Pay

Perhaps the most critical element of fairness is ensuring that support balances the needs of the recipient with the ability of the payor to provide. Courts in Ontario are guided by principles of fairness and reasonableness rather than hardship for one side. A clause should take into account:

• The standard of living enjoyed during the relationship.
• The recipient’s need for financial stability and time to achieve independence.
• The payor’s ongoing financial obligations, including child support and personal expenses.

Independent Legal Advice and Validity

ILA Requirement

Each spouse should obtain independent legal advice from their own lawyer before finalizing the agreement. This step serves several purposes:

• It confirms that each spouse fully understands the terms of the spousal support clause and the legal consequences of signing it.
• It prevents one spouse from later arguing that they were misled, pressured, or unaware of their rights.
• It provides written confirmation (usually in the form of a lawyer’s certificate) that legal advice was given, which strengthens the enforceability of the agreement in court.

Without ILA, a spousal support clause may be vulnerable to challenges on the grounds of unfairness, duress, or lack of informed consent.

Proper Execution

For a spousal support clause to be valid, it must also be executed properly in accordance with Ontario law:

• Signing – Both spouses must sign the agreement voluntarily and without coercion.
• Witnessing – A witness, typically a lawyer or another qualified professional, should be present to confirm the authenticity of the signatures.
• Secure Storage – Once signed, the agreement should be stored safely, with each spouse retaining a copy. Some couples also choose to file their agreement with the court for added enforceability.

Modifying the Clause if Circumstances Change

Material Change in Circumstances

A material change in circumstances is one of the most common reasons for modifying spousal support. Examples include:

• Job Loss or Significant Income Reduction – If the payor loses their job or experiences a major decrease in earnings, continuing the same level of support may no longer be reasonable.
• Illness or Disability – Either spouse developing a serious health condition may create new financial needs or limit earning capacity.
• Retirement – When the payor retires, especially at a normal retirement age, support obligations may need to be reassessed to reflect reduced income.

A clause that acknowledges these scenarios makes it easier to revisit support without unnecessary conflict.

Court Variations

If spouses cannot agree on changes, the courts have the authority to vary or terminate a spousal support order or agreement under the Divorce Act or the Family Law Act. Courts typically require proof of a genuine material change before intervening.

Built-In Review Mechanism

A proactive way to manage future changes is to include a review mechanism directly in the spousal support clause. This might involve:

• Scheduled Reviews – For example, every three years, or when a specific event occurs, such as the recipient completing retraining or a child finishing school.
• Negotiation Requirement – Requiring both parties to attempt good-faith negotiation or mediation before going to court.
• Clear Triggers – Identifying specific events that will automatically prompt a review, such as a significant income increase or new cohabitation.