We are seeing a rising trend of “grey divorces” in family law: elderly couples separating after a long-term marriage. With that comes the question of whether spousal support ends at retirement? The answer to this question turns to the merits of each case.
Many payors seek answers as to whether their retirement amounts to a material change in circumstances. The law in Alberta allows spousal support payments to be reduced if there is a material change in circumstances. The test for material change is set out in the case of Salt v Salt, 2019 ABQB 595, that “if the change had been known at the time of the earlier order, the order would have been different.”
The courts will not consider the following factors as a material change in circumstances:
- The payor spouse is voluntarily retiring prematurely and not driven by any health concerns.
- The payor spouse is retiring early to avoid spousal support.
- The payor spouse is under-employing themselves by not working to 65.
In the recent decision of Justice M.J. Lema in Kelly v Gammon, 2022 ABQB 57 addresses the application by a 60-year-old husband who had retired since his pension was maximized and sought to cancel his ongoing spousal support. The husband’s income was zero as a result of his decision to retire. The wife opposed, seeking to have the husband’s income imputed, equal to his pre-retirement income on the basis that he retired early.
The Court explained that where a payor retires before the age of 65 with no health concerns, completed a full-run career and maximized their pension plan, can validate a decision to retire. Such a decision to retire is reasonable where it was known to the other spouse and retirement was always the plan. It is unreasonable for the recipient spouse to ask the payor spouse to work an additional 5 years where a separation occurs.
- the husband was initially intending to retire at 58, when he thought he would max out his pension;
- the wife was aware of his early retirement plan and did not object to it; and
- once the husband learned that his pension would maximize at 60, he worked an additional two years. He did not retire when the parties separated.
The Court held that the husband’s retirement, reducing his full-time income to zero was a material change of circumstance. His decision to retire at 60 was a reasonable decision and therefore, not a reason to impute income to him, at least not in this interim order.
Takeaway
Many aspects are considered when determining the continuation of spousal support upon retirement. Though you may have divided your pension and assets, yet the requirement to pay spousal support can still be present. The Alberta law gives importance and turns to court orders or separation agreements that focus on the issue of spousal support. However, if the order or agreement does not indicate a review period or end date, then the length of support is uncertain, leaving payors to be cautious when retiring.
If you are separating or separated and an Alberta resident retiring, please contact a lawyer at Wells Family Law at either info@wellsfamilylaw.com or by phone at 587-356-4342 about your rights and obligations for terminating spousal support upon retirement or continuing support if you are the recipient. Wells Family Law is here to help resolve your family law issues following the breakdown of your relationship while maintaining as much financial stability as possible.