Basic Needs/Hardship: Without Child Support, Custodial Payor Formulas

The without child support formula works well across a wide range of cases from short to long marriages with varying incomes. In some parts of the country and in some cases, there is a specific problem for shorter marriages where the recipient has little or no income. In these shorter-marriage cases, the formula is seen as generating too little support for the low income recipient to meet her or his basic needs for a transitional period that goes beyond any interim exception.

Restructuring in these cases will sometimes still not generate an amount or a duration that is sufficient, in the eyes of some, to “relieve any economic hardship of the spouses

arising from the breakdown of the marriage”, as stated in section 15.2(6)(c) of the

Divorce Act. To complicate matters further, the amount required to meet basic needs will vary from big city to small city to town to rural area. Whether restructuring provides a satisfactory outcome, i.e. more support for a shorter time, will depend upon where the recipient lives. Thus the problem for these short-to-medium-marriage-low-income cases seems to be most acute in big cities.115

We did not wish to change the structure of the formula itself for this one sub-set of cases. The best approach to these cases was to create a carefully-tailored exception, the basic needs/hardship exception, leaving the basic formula intact for the vast majority of cases where the formula produces a reasonable range of outcomes.

Other exceptions may avoid the need to resort to this basic needs/hardship exception. In some short marriages without children, the compensatory exception may apply, with more generous outcomes than under this exception. The basic needs/hardship exception is non-compensatory. In other cases, in shorter marriages, the compelling financial

circumstances at the interim stage can provide for a higher amount of support for a transitional period, such that no further exception need be applied by the time of trial. Earlier, we made clear that basic needs/hardship exception should only be considered at the trial or initial determination stage, after a full review of the merits on all the evidence, including any interim exception granted.

113

Boston v. Boston, [2001] 2 S.C.R. 413.

114 _{For examples of Guidelines cases applying Boston, see Pettigrew v. Pettigrew, [2006] N.S.J. No. 321,}

2006 NSCA 98 (N.S.C.A.), affirming [2005] N.S.J. No. 616, 2005 NSSC 219 (N.S.S.C.); Puddifant v. Puddifant, [2005] N.S.J. No. 558, 2005 NSSC 340 (N.S.S.C.F.D.); Vanderlans v. Vanderlans, [2007] N.J. No. 121, 2007 NLUFC 8 (N.L.U.F.C.).

The basic needs/hardship exception applies under the without child support formula and the custodial payor formula, only in these circumstances:

• the formula range, even after restructuring, will not provide sufficient income for the recipient to meet her or his basic needs

• the reason will be that the recipient’s base or non-support income is zero or too low

• the marriage will typically be short to medium in length, e.g. 1 to 10 years

• the payor spouse will have the ability to pay.

We should be clear that this exception is only intended to ease the transition in these hardship cases. It is not intended to provide the marital standard of living, but only a standard of basic needs. And it is not intended to provide support for a long period of time after a shorter marriage, but only for a short transition period.

One situation where the basic needs/hardship exception has been applied is immigration sponsorship cases, where a marriage breaks down while a sponsorship agreement is in place. Most spousal sponsorship agreements now run for a period of three years from the date the immigrating spouse becomes a permanent resident.116 In some cases of very short marriages, the three-year agreement has been used as a measure of the appropriate duration for the period that the payor spouse covers basic needs through spousal support.117

A simple example will illustrate the application of this exception:

Example 12.5

Rob and Donna have been married for 5 years, a second marriage with no children. Rob earns $60,000 per year. Donna is 53 years old and has no income. Much turns upon why Donna has no income.

If Donna has no income because she moved twice in the past 5 years to accommodate Rob’s employment transfers, then the compensatory exception would apply, with spousal support based upon Donna’s loss.

But if Donna has no income because she has few skills and is unemployed at the end of the marriage, then her entitlement will be non-compensatory. Under the

without child support formula, the range would be $4,500 to $6000 per year ($375 to $500 per month) for 2 ½ to 5 years. This range would not meet Donna’s basic needs in any part of Canada.

116 _{The duration of such sponsorship agreements was once as long as 10 years, reduced now to 3 years:}

Immigration and Refugee Protection Regulations, SOR/2002-227, as am. SOR/2004-167 and SOR/2005- 61, s. 132.

117

For example, Gidey v. Abay, [2007] O.J. No. 3693 (Ont.S.C.J.); T.M. v. M.A.G., [2006] B.C.J. No. 3479, 2006 BCPC 604 (B.C.P.C.).

By means of restructuring, using the maxima for amount and duration, the formula could generate as much as $15,000 per year for 2 years. In some parts of Canada, that might be enough to meet Donna’s basic needs. In a city, however, Donna might need $20,000 a year for those two years to meet her basic needs, as part of the transition from married life.

In the end, we remain uneasy about recognizing this exception. Many would suggest that the restructured outcome for Donna of $15,000 per year for two years is perfectly

reasonable, even in a big city, so that no exception is warranted at all. Others would see the restructured amount as too low, or the duration as too short, thus warranting an exception, and cases to that effect can be found in the post-Guidelines case law. For the most part, those who pressed for this exception can be found in big cities and it may be that this specific exception is not necessary outside of those big cities.