Perry v. Perry – Pensions and Double-Dipping in Spousal Support Awards

This case deals with a couple that had a lengthy marriage. The Husband had a significant pension which, at the time of this decision, was in pay. This poses a frequent problem in family law cases, as pensions that are in pay are often Double Dipped. That is, a pension is considered as an asset when parties conduct the Equalization of their Net Family Properties. This process effectively means that the party without the pension shares in its value. Then, when spousal support is calculated, that party (who is usually the spousal support recipient) also receives portions of the pension as this is the income the payor uses to pay their support. In this case, the husband retired and his income dropped from $77,000.00, which he earned through employment, to $42,000.00, which he earned from his pension. Both of these facts, the husband’s retirement and the decrease in his income, were deemed to be sufficient material changes to warrant a change in spousal support. The wife was not working at this time and, despite her health issues, the Judge found her able to contribute to her own support, if only on a part-time basis. Additionally, the husband was caring for one of the parties’ adult children who was living with schizophrenia and was unable to work. Despite the foregoing, Justice Rogin continued spousal support at the previously established quantum. In making this award, the Judge ignored the material change, the fact that this constituted double-dipping with respect to the husbands pension, and his caring for the couple’s son. This is likely because the wife was living dangerously close to the poverty line and, without continued support, would require welfare. Also, the husbands reduced income put him in a lower tax bracket, meaning that the provision of $1,200.00 per month in spousal support to the wife would only cost him $750.00 per month. This is an interesting case showing that the need of a spouse will supersede the Courts desire to avoid double-dipping with respect to pensions.

Andrew Feldstein

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This Post Has 2 Comments
  1. While Boston makes double dipping a possibility, clearly the Court of Appeal in Meiklejohn, articulates circumstances where double dipping would not be inappropriate. This premise is reiterated in the Court of Appeal in Marinangelo. It is therefore neither surprising nor unreasonable for the court in Perry to depart from Boston. The court clearly sets out those factors that justify double dipping, included but not limited to : a significant portion of the value of the pension accrued after separation; spousal support was based on need; the wife had limited ability to earn income; she had received only a modest amount from the equalization of the property and she had limited ability to generate income.

    Moreover, the court is always mindful that if possible support of the payee should not fall to the state. If possible, the court seeks a solution whereby the payee can be supported by the payor as opposed to being supported by public assistance.

  2. Many lawyers and non-lawyers will not agree with this decision and will be somewhat surprised by it, at least initially. A narrow review of the facts would one to conclude that the wife should not be able to double dip into her ex-husband’s pension as it is simply unfair. However, Justice Rogin did support his seemingly surprising decision with case law. Justice Rogin quoted Justice Weiler in Marinangeli v. Marinangeli (2003), 66 O.R. (3d) 40 (Ont. C.A.), who said the following:
    “A further elaboration of the principles respecting double dipping is articulated in Meiklejohn v. Meiklejohn (2001), 19 R.F.L. (5th) 167 (Ont. C.A.), where Rosenberg J.A. held that a court will not automatically exclude consideration of a payor’s pension income from his or her ability to pay support because the capital value of the pension has been included in the equalization accounting. While it may be generally unfair that the income stream from an asset that has already been equalized be considered in determining support, there are a number of circumstances where a court is justified in awarding support from pension income although the value has already been included in equalization. There were a number of factors that led Rosenberg J.A. to conclude that the rule against double dipping did not apply to the case before him. A significant portion of the value of the pension accrued after separation; spousal support was based on need; the wife had limited ability to earn income; she had received only a modest amount from the equalization of the property and the wife’s share of the assets was tied up in the matrimonial home from which she had no ability to generate income. Based on the persisting economic hardship from the marriage or its breakdown, he ordered support out of the pension.”
    In light of the Ontario Court of Appeal’s comments, the mere fact that double dipping exists in a case may not be sufficient in and of itself to stop spousal support. Justice Rogin’s decision clearly permits double dipping to continue and in that sense it is a surprising decision; however, Justice Rogin’s decision is reasonable given the facts in Perry v. Perry, namely the dire financial circumstances of the wife. If a similar double dipping scenario came before the court where the wife was not in such dire circumstances, the result would likely have been different. This case should serve as a reminder to support payors to not only consider their financial situation and the perceived fairness to themselves, but also to consider the circumstances of the support recipient since despite a support payor’s very reasonable legal position with respect to ceasing double dipping, their ex-spouses compelling facts may win the day.

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