Compensatory, Non-Compensatory, and Contractual
Did you know that marriage itself does not automatically entitle a spouse to receive support?
Pursuant to s.15.2(4) of the Divorce Act, in making an order for spousal support, the Court must take into consideration the condition, means, needs and other circumstances of each spouse, including:
- The length of time the spouses cohabited;
- The functions performed by each spouse during cohabitation; and
- Any order, agreement or arrangement relating to support of either spouse.
A spouse must first establish whether or not they have an entitlement, before one can make a claim on the quantum and duration of the support. It follows from the above factors, there are three types of entitlements to spousal support: compensatory, non-compensatory and contractual.
Compensatory
Compensatory claims are based either on the support recipient's economic loss or disadvantage as a result of roles adopted during the marriage. Compensatory support often plays a greater role in longer- term marriages and generally yields spousal support that is higher in quantum and longer in duration.
Common markers of compensatory claims from the Spousal Support Advisory Guidelines (SSAG) that a Court will look at in making a determination include:
- Being home with children full or part time;
- Being a secondary earner;
- Having primary care of children after separation;
- Moving for the payor's career;
- Supporting the payor's education or training; and
- Working primarily in a family business.
Put simply, compensatory entitlement it meant to 'compensate' a spouse for the role that they assumed during the marriage.
Non-Compensatory
Non-Compensatory spousal support involves claims based on 'need' and is intended to reflect the economic interdependency that developed throughout a parties' marriage. Non-compensatory claims are often time-limited and are intended to provide transitional support from pre-separation to a post-separation material standard of living
Common markers of non-compensatory claims from the SSAG that a Court will look at in making a determination include:
- Length of the relationship (often a shorter marriage);
- A drop in the standard of living after separation;
- Economic hardship experienced by the claimant.
Contractual
A contractual entitlement consists of what a party may agree to in a domestic contract, such as a cohabitation contract, marriage contract or separation agreement.
Whether or not a spouse is entitled to spousal support is decided on a case-by-case basis, with many marriages likely a mix of both compensatory and non-compensatory entitlement.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
