September 30, 2023

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

In some instances, courts could inform folks to not “double dip” however in others, they’ve mentioned that double dipping is suitable.  Take a learn beneath to search out out what double dipping is within the household legislation context, and whether or not that is one thing you need to be conscious of in your loved ones legislation dispute.

What’s double dipping in spousal help?

Double dipping refers back to the potential for one social gathering to obtain a number of monetary advantages from the identical revenue 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 help primarily based on the revenue generated from the beforehand divided belongings (suppose a pension) of the opposite partner. Typically, it’s thought-about unfair to permit the claiming partner to reap the advantage of each the asset upon property division in addition to a supply of revenue.

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

The main case on the difficulty of double dipping in spousal help is the Supreme Court docket of Canada (SCC) case Boston v. Boston (2001 SCC 43). On this case, the husband’s pension was price 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 stored the household house, farm, cottage and a lot of the financial savings. The settlement additionally set out the husband’s spousal help obligation to the spouse.

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

The SCC held that there must be no double dipping, stating that “it’s usually 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 revenue.” The Court docket additionally said that the spouse had an obligation to make use of the belongings she had acquired via the division of property to generate a stream of revenue for her personal help.

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 must be no continuation of spousal help payable, which the spouse appealed. The BCCA upheld the decrease Court docket’s resolution, recognizing that the husband was 66 years outdated and unable to discover a new job, and he was reliant on his pension and financial savings. The BCCA held that the spouse had acquired her share of household belongings, and to permit her now to hunt a share of the revenue from the husband’s belongings can be to permit the type of “double dipping” that was discovered to be improper in Boston. This could basically lead to re-dividing belongings that had already been divided.

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

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

In M.C.D. v. D.A.D. (2017 BCSC 1832), the husband claimed that the spouse shouldn’t be permitted to say spousal help primarily based on all the revenue he generated from his enterprise, because the spouse already acquired compensation for her curiosity within the firm via 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 revenue that may very well be spent with out depleting the worth of his enterprise. Due to this fact, the husband’s spousal help funds have been to be decided primarily based on an revenue quantity that thought-about the revenue generated from his enterprise.

Double dipping is usually not thought-about for revenue 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-about the husband’s attraction relating to the consideration of his capital in figuring out his capability to pay spousal help. The SCC upheld the decrease court docket’s resolution to contemplate 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 be aware that there may 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 instances the place the payor can afford to pay extra spousal help, and the recipient nonetheless wants the cash although she has made an inexpensive effort to provide revenue from her belongings acquired upon the property division, as an financial hardship from the wedding or its breakdown persists.

Does double dipping apply to baby help too or solely spousal help?

Double dipping extra generally arises as a problem for spousal help functions and isn’t thought-about as regularly when figuring out revenue for baby help functions. Youngster help is the fitting of the kid, and the Federal Youngster Assist Pointers require revenue for baby help functions to be decided primarily based on all sources of revenue, which means that it’s much less doubtless that revenue streams corresponding to pension revenue usually are not thought-about for the needs of kid help.

If you happen to could also be coping with a problem of double dipping, contact our spousal help legal professionals to arrange a session and study extra.