Many payors of spousal support seek answers to a common question: does spousal support end at retirement? The answer to this question will depend on the circumstances of each case.
A variety of factors play a role in determining if spousal support it still payable upon retirement. In Ontario, even though each party may have equalized their assets and the payor’s pension, the obligation to pay spousal support can still exist.
The law will give consideration to separation agreements or court orders that address the issue of spousal support. Often, the parties will negotiate the end of spousal support payments upon the retirement of the payor. However, if a separation agreement or court order does not specify an end or review date, then spousal support is considered indefinite.
Therefore, where there is no agreement in place, support payors should be cautious when retiring. The law in Ontario will only allow the support payor to reduce the support payments if it is demonstrated that there is a “material change in circumstances”. Generally speaking, the courts do not consider retirement as a change of circumstance if a voluntary retirement brings about the retirement, specifically when doing so before attaining the age of 65. For example, as McLeod and Mamo explain in Annual Review of Family Law, 2015 (Toronto: Carswell, 2015) “a court is unlikely to allow a payor to rely on reduced income from early retirement if the retirement was unreasonable given the payor’s health and other circumstances, including his or her obligations.”
Moreover, case law such as Haynes v Haynes, 2019 ONSC 2271, 2019 Carswell Ont 5640, is precedent for why courts are not sympathetic to support payors who voluntarily retire early for their own benefit. In Haynes, the court dismissed the husband/payor’s motion to reduce or end the spousal support payable to the ex-spouse. In this case, the parties’ final order in 2006 provided that the husband would pay monthly spousal support of $3,200 to the ex-spouse until his death. The husband took early retirement at the age of 60. The outcome was that the husband’s reduced income due to his voluntary early retirement did not constitute a material change in the circumstances. The court held that the husband could not choose to be voluntarily underemployed by retirement or otherwise and thereby avoid his support obligations. Therefore, if a support payor is shown to have retired early to frustrate his support obligations, the court may impute his income up to the amount he would have been earning prior to retirement.
The courts will only replace the support payor’s pre-retirement income for their pension income in limited circumstances to calculate any impending support payments. The payor will not be entitled to this variation based solely on retirement; the retirement must have led to a change that is so significant as to constitute a material change in the circumstances of the payor. For example, these material changes may occur when early retirement results from the loss of employment, or major health issues forced the payor into retirement. These and other factors will be considered on a case-by-case basis.