Divorcing Dinks (Double Income, No Kids)

No matter their age or how long they’ve been married, all Canadians who decide to divorce are subject to the same laws regarding spousal and child support. For dual income couples in their 20s or 30s who’ve been together a relatively short period of time (i.e. less than seven years) and don’t have any children (aka “DINKs”), this can come as a bit of a surprise.

Obviously, child support payments won’t be an issue.  Shouldn’t the same be true for spousal support if both of you are gainfully employed and working full time?

Not necessarily. Even couples who divorce at a young age after a brief marriage may find themselves negotiating financial support arrangements that last months, or even years, after the relationship ends.

When a couple divorces, one spouse is not automatically entitled to receive spousal support just because his or her income is lower than their ex’s. Under the federal Divorce Act, the divorcing spouses must either agree that one will pay support to the other or, if they can’t agree, they’ll have to ask a judge to decide the issue for them.  (Note that the BC Family Law Act also addresses spousal support entitlement and applies to both married and unmarried spouses. The Divorce Act applies only to married spouses.)

Amount and Duration of Support: The Advisory Guidelines

Once there is agreement (or a judge’s finding) that spousal support will be paid, the issues of how much and for how long need to be decided – again, either by the spouses themselves, or by the court, depending on the circumstances. It’s at this point, when looking at the amount and duration of spousal support, that the brief nature of the marriage comes into play.

The Canadian Spousal Support Advisory Guidelines (the Advisory Guidelines) were introduced in 2008 as a practical tool to help spouses, lawyers, mediators and judges decide how much support one ex-spouse will pay the other, and over what period of time. While these guidelines are not mandatory or legally binding, in practice, they are used consistently across Canada.

They include two basic formulas for calculating support: one for spouses who have dependent children, one for spouses who don’t. For divorcing DINKs, it is the without child support formula that applies. The key considerations here are the gross income difference between the spouses, the length of the marriage, and whether one spouse was financially advantaged or disadvantaged by the marriage.

The first two factors (income difference and length of marriage) affect non-compensatory support. That is, support based on one spouse’s financial need and the other spouse’s ability to pay. This support is essentially a financial cushion to help the lower-earning spouse get through the transition of having less income. Both the amount and duration of spousal support increase with the length of the marriage. As a general rule, the spouse with the lower income will receive 6 to 12 months of spousal support for every year of the marriage.

Compensatory spousal support is awarded where the recipient spouse was financially disadvantaged or the payor spouse was financially advantaged by the marriage. For example, if one spouse left their career to move and support the other spouse’s career, or if both spouses made a joint decision during the marriage that positively or negatively affected one of their careers, this can result in compensatory support. Compensatory support is usually longer in duration or higher in amount than non-compensatory support.

One last factor which comes into play is whether the spouses previously entered into a marriage agreement setting out the amount and duration of spousal support payable if they divorced. If such an agreement exists, the spouses will typically have to follow its terms, unless a court decides that the agreement is unfair.

Bottom Line

While it may seem counterintuitive that a financially self-sufficient young man or woman in their late 20s is receiving support from their ex after only two or three years of marriage, Canadian spousal support laws are designed to provide the lower income spouse with a temporary monetary cushion to help him or her get through the post-marriage transition period. As well, Canadian tax laws help to balance out the post-divorce re-distribution of income, by making spousal support payments tax deductible in the hands of the paying spouse and taxable income for the receiving spouse.

Ultimately, of course, there’s no way to avoid the financial impact of separation – even for DINKs, moving from living off two salaries to one can be an adjustment. For better or worse, Canadian and family and tax laws do their best to soften the blow for both parties.

About Leisha Murphy

Partner/Mediator – Vancouver

After being a family lawyer for over 13 years, coupled with my own personal experience with divorce, I have come to understand the difficult transition that comes with the end of a relationship. This experience has put me in the unique position of being able to provide clients with a clear picture of what is to come and how to plan for it. As well as provide clients with guidance and education on how to deal with the day-to-day realities of a separation.