The Affect on BC Household Regulation

Double dipping in spousal assist generally is a huge consideration for people navigating divorce or separation in British Columbia.

In some circumstances, courts might inform folks to not “double dip” however in others, they’ve stated that double dipping is suitable.  Take a learn under to seek out out what double dipping is within the household legislation context, and whether or not that is one thing try to be conscious of in your loved ones legislation dispute.

What’s double dipping in spousal assist?

Double dipping refers back to the potential for one celebration to obtain a number of monetary advantages from the identical earnings supply, leading to unfair outcomes.

For instance consider a pair who’ve divided their property upon the breakdown of their marriage.  On this instance one partner would declare continued assist based mostly on the earnings generated from the beforehand divided belongings (assume a pension) of the opposite partner. Typically, it’s thought of unfair to permit the claiming partner to reap the advantage of each the asset upon property division in addition to a supply of earnings.

What do the courts say about double dipping in spousal assist?

The main case on the difficulty of double dipping in spousal assist is the Supreme Court docket of Canada (SCC) case Boston v. Boston (2001 SCC 43). On this case, the husband’s pension was value over $300,000. The events entered right into a separation settlement that allowed him to maintain this pension and some private belongings, whereas the spouse saved the household dwelling, farm, cottage and many of the financial savings. The settlement additionally set out the husband’s spousal assist obligation to the spouse.

Three years after the separation settlement, the husband retired, and most of his earnings got here from his pension. He utilized to have his spousal assist funds decreased due to his decreased earnings. He argued that he mustn’t must pay spousal assist based mostly on his pension earnings, because the pension was already thought of when the events divided their marital property. The spouse argued that she was nonetheless entitled to spousal assist, as she had grown used to a lifestyle based mostly on her spousal assist funds and wouldn’t be capable to discover employment now after being a conventional homemaker her total life.

The SCC held that there ought to be no double dipping, stating that “it’s typically unfair to permit the [recipient] partner to reap the advantage of the pension each as an asset after which once more as a supply of earnings.” The Court docket additionally acknowledged that the spouse had an obligation to make use of the belongings she had acquired by way of the division of property to generate a stream of earnings for her personal assist.

The British Columbia Court docket of Attraction (BCCA) cited Boston when contemplating the difficulty of double dipping in Puiu v. Pui (2011 BCCA 480). The events beforehand divided their belongings by consent, together with pension funds. The decrease Court docket determined that there ought to be no continuation of spousal assist payable, which the spouse appealed. The BCCA upheld the decrease Court docket’s resolution, recognizing that the husband was 66 years previous and unable to discover a new job, and he was reliant on his pension and financial savings. The BCCA held that the spouse had obtained her share of household belongings, and to permit her now to hunt a share of the earnings from the husband’s belongings could be to permit the type of “double dipping” that was discovered to be improper in Boston. This is able to basically lead to re-dividing belongings that had already been divided.

Does double dipping apply to all belongings that produce an earnings stream, or simply pensions?

Double dipping with a pension has been distinguished from that of enterprise belongings, as a result of pension earnings depletes the pension asset, whereas typical enterprise belongings proceed to provide earnings with out devaluing the belongings themselves. The BCCA has acknowledged that the pension analogy for double dipping doesn’t apply to circumstances during which the payor wouldn’t must liquidate belongings to pay ongoing assist.

In M.C.D. v. D.A.D. (2017 BCSC 1832), the husband claimed that the spouse shouldn’t be permitted to say spousal assist based mostly on the entire earnings he generated from his enterprise, because the spouse already obtained compensation for her curiosity within the firm by way of the division of household belongings. He argued that this could represent double dipping. The Court docket didn’t settle for this argument. The husband’s enterprise produced earnings that might be spent with out depleting the worth of his enterprise. Due to this fact, the husband’s spousal assist funds have been to be decided based mostly on an earnings quantity that thought of the earnings generated from his enterprise.

Double dipping is usually not thought of for earnings earned from capital belongings that didn’t exist on the time of the division of property. Within the Supreme Court docket of Canada case, Leskun v. Leskun (2006 SCC 25), the Court docket thought of the husband’s enchantment concerning the consideration of his capital in figuring out his means to pay spousal assist. The SCC upheld the decrease court docket’s resolution to think about the husband’s capital belongings acquired following separation. Double dipping didn’t exist as a result of these capital belongings didn’t exist on the time of the division of property.

In what circumstances will double dipping be allowed by the Court docket?

Though the Supreme Court docket of Canada in Boston v. Boston didn’t permit double dipping in that case, the Court docket did observe that there could be an exception to the rule towards double dipping, the place it can’t be “pretty prevented.” For instance, double dipping could also be permitted in circumstances the place the payor can afford to pay extra spousal assist, and the recipient nonetheless wants the cash regardless that she has made an inexpensive effort to provide earnings from her belongings obtained upon the property division, as an financial hardship from the wedding or its breakdown persists.

Does double dipping apply to little one assist too or solely spousal assist?

Double dipping extra generally arises as a difficulty for spousal assist functions and isn’t thought of as regularly when figuring out earnings for little one assist functions. Baby assist is the precise of the kid, and the Federal Baby Help Tips require earnings for little one assist functions to be decided based mostly on all sources of earnings, which means that it’s much less probably that earnings streams equivalent to pension earnings aren’t thought of for the needs of kid assist.

If you happen to could also be coping with a difficulty of double dipping, contact our spousal assist attorneys to arrange a session and be taught extra.