Spousal Support When You Retire: Can Payments End or Change?

Many support orders and agreements were made when both spouses were working. Years later, the paying spouse is ready to retire, income is about to drop, and the obvious question is whether support has to continue.

The short answer is that retirement can change spousal support, but it does not end it on its own. This guide explains the legal tests, a pension-specific rule in BC's Family Law Act, and the issues that come up for both payors and recipients.

Retirement does not end support automatically

A spousal support order or agreement keeps running until it is changed, ends on its own terms, or a court terminates it. Simply retiring, or simply turning 65, does not switch it off. A payor who stops paying without an agreement or order risks arrears building up, along with enforcement action.

What retirement can do is create grounds to change support. How you get there depends on whether you have a court order or an agreement, and on what that document says. For the general process, see our guide to varying or ending spousal support in BC.

Changing a court order after retirement

For orders under BC's Family Law Act, section 167 lets a court change, suspend or terminate spousal support, going forward or retroactively. The court must first be satisfied that at least one of these exists: a change in the condition, means, needs or other circumstances of either spouse since the order was made; substantial new evidence that was not available before; or a lack of financial disclosure discovered after the order.

For orders made under the federal Divorce Act, section 17 gives a similar power to vary, rescind or suspend. Section 17(4.1) requires a change in the condition, means, needs or other circumstances of either former spouse since the order, and section 17(7) sets the objectives the court should consider, including relieving economic hardship and promoting self-sufficiency.

A genuine retirement with a real drop in income can be that kind of change. Expect questions about why and when you retired. A retirement that looks timed mainly to reduce support is likely to be scrutinized, and the court will also look at the recipient's circumstances, not just yours.

The pension review rule in the Family Law Act

BC has a provision written for this situation. Section 169 applies where an agreement or order does not address whether spousal support can be reviewed, and either the paying spouse starts receiving pension benefits, or the receiving spouse becomes eligible to receive pension benefits.

In those circumstances, a court may confirm the existing arrangement, set aside all or part of an agreement or terminate an order, or make a new support order. In doing so, it is not required to apply the usual tests for changing an order under section 167(2) or for setting aside an agreement under section 164. Section 198(4) also says the general two-year time limits do not apply to these reviews.

If your agreement or order already has a review clause, section 168 governs instead, and the review follows the terms you agreed to. Because these are Family Law Act provisions, whether they help you can depend on whether your support was set under the provincial Act or under the Divorce Act, which is worth checking with a lawyer.

If you have an agreement rather than an order

Many separation agreements say what happens on retirement. Section 163 allows an agreement to set out when support will change or end, so read yours first. If it is silent, or if the pension review rule does not apply, a court can set aside or replace a witnessed written agreement under section 164. Apart from problems when it was signed, such as non-disclosure, the court can act if the agreement is significantly unfair, considering the time that has passed, changes in circumstances, the spouses' intention to achieve certainty, how much they relied on it, and the support objectives in section 161.

Double dipping: when the pension was already divided

A common issue arises where the payor's pension was divided as family property at separation. The recipient already received a share of that pension. When the payor retires and the pension becomes the main income source, paying support out of the same pension can mean the recipient benefits from it twice.

The Supreme Court of Canada addressed this in Boston v Boston, 2001 SCC 43, an Ontario case. The Court said double recovery should be avoided where it is fair to do so, focused on the portion of the pension earned after separation that had not been divided, and considered whether the recipient could reasonably be expected to use their divided assets to produce income. It did not hold that support simply ends; need and ability to pay were still weighed.

How this plays out depends on how the pension was divided, what other assets each spouse has, and the reasons support was awarded. Our article on pension division in BC explains the property side.

Planning ahead, on either side

• Payors: gather pension statements and a realistic retirement budget, and raise the issue before you retire rather than after arrears build up.
• Recipients: look at your own pension eligibility and how the assets you received at separation are invested, since both may be considered.
• Both: expect full financial disclosure to be required. The Spousal Support Advisory Guidelines are often used to frame amounts, and any fresh calculation will turn on your incomes after retirement.

For background on how support is set in the first place, see our spousal support guide.

Planning to retire with a support obligation? Review it before your income changes

Our family lawyers can review your order or agreement, explain whether a review or variation is available, and negotiate or apply to change, suspend or end spousal support.

Call 604-259-2844 or send us a message to arrange a consultation at our Vancouver office.