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Boston v Boston (2001 SCC 43)

Case at a glance
CaseBoston v Boston
Citation2001 SCC 43
CourtSupreme Court of Canada
Year2001
TopicSpousal Support
Central questionWhat is double-dipping in pension division?

Key takeaways {#takeaways}

  • Double-dipping means claiming support from a pension that was already divided as property when you separated.
  • Courts should first look to income the paying spouse earned after separation, not the already-divided pension.
  • Double-dipping can still be allowed where hardship persists or support is based mainly on need.

Boston v Boston at a glance {#summary}

Double-dipping (the Supreme Court of Canada calls it "double recovery") happens when a pension is valued and divided as property at separation, and the same pension is later treated as income for spousal support. The receiving spouse then collects twice from one asset — once as capital, once as support.

Most people assume spousal support simply continues after the paying spouse retires. Boston v Boston, 2001 SCC 43 disrupted that assumption. Willis Boston kept his teacher's pension, valued at $333,329, and his former wife took roughly $370,000 in other assets. When he retired, the Court cut his support obligation to $950 per month. The case decides what retirement means for every long-term support order involving a pension.

The facts {#facts}

Willis and Shirley Boston separated in 1991 after a 36-year marriage. She was a homemaker who raised their seven children. He built a career in education and was earning $115,476 a year as a Director of Education (paras 7, 13).

In October 1994 they settled property and support by consent judgment. The combined assets were about $750,000. He kept his Ontario Teachers' pension, valued at $333,329 after tax, ending up with about $385,000 in net assets. She received the mortgage-free home on 168 acres, contents, RRSP transfers of $18,000 and $25,000, and other payments — about $370,000 in all. He also agreed to pay $3,200 per month in spousal support, indexed to the cost of living (paras 8–13).

He retired in 1997. His pension income was about $8,000 per month: roughly $7,600 from the teachers' plan plus a $431 Canada Pension Plan benefit. Of the teachers' pension, about $5,300 per month came from the portion already divided in 1994; about $2,300 per month was earned after separation and had never been divided (paras 15, 18).

By the time he applied in 1998 to reduce support, she had invested carefully and held assets worth over $493,000 with no debts. His assets exceeded his debts by $7,000 (paras 16–17).

The motions judge cut support from $3,433.12 per month (the indexed figure) to $950, not indexed. The Ontario Court of Appeal raised it to $2,000, indexed. He appealed to the Supreme Court of Canada (paras 6, 19, 25).

The legal issues {#issues}

The Court framed two questions (para 28):

  1. Can a retired paying spouse ask to reduce support because the pension now paying out was already counted when the property was divided?
  2. Does the spouse who received assets in exchange for a share of the pension's value have a duty to invest those assets to produce income — and if she does not, should the court attribute (impute) an income to her anyway?

What the court decided {#decision}

The Court allowed the appeal 7–2 and restored the $950 monthly award, adding indexing and any arrears. Justice Major wrote for the majority; Justices L'Heureux-Dubé and LeBel dissented (paras 6, 81).

The majority's core points:

  • Support can continue past retirement. Retirement does not end support by itself. Need, ability to pay, and double recovery must all be weighed (para 61).
  • Double-dipping is generally unfair. It is "generally unfair" to let the receiving spouse benefit from the pension first as an asset and again as income — especially while she grows her own estate and the payor's only asset shrinks (paras 63, 75).
  • Focus on undivided income. Where practical, courts should look to the portion of the payor's income and assets that was not part of the property division — here, the $2,300 per month of pension earned after separation (paras 64, 73).
  • The receiving spouse must put her settlement to work. Assets received in exchange for the pension must be used to create her own retirement income, at least by the time the pension starts paying. A capital-depleting income fund is enough; no sophisticated investing is required. The home is usually left out of this expectation when support is compensatory (paras 54–60).
  • Otherwise, income is imputed. If she does not invest, the court should attribute income to her based on professional actuarial evidence of what the assets could reasonably earn (para 66).
  • Exceptions exist. Double recovery may still be permitted where the payor can pay, the recipient has made reasonable efforts to generate income from her assets, and economic hardship from the marriage or its breakdown persists — or where support rests mainly on need rather than compensation (para 65).

The dissent would have upheld $2,000 per month. Justice LeBel reasoned that pension payments are simply income, all income streams count toward means and needs, and a spouse who lived modestly and invested safely should not be penalized for it (paras 111, 115–117).

Where the law stands now. Nothing in the sources fetched for this commentary shows the Supreme Court revisiting Boston; its double-recovery framework remains the leading statement from that Court. But Boston was decided under Ontario's equalization scheme. In BC, separations are now governed by the Family Law Act, SBC 2011, c 25: Part 5 divides family property, Part 6 provides a scheme for dividing the pension itself between spouses (which can avoid the trade of "pension for other assets" that created the Boston problem), and s 169 expressly lets a court review spousal support when either spouse starts receiving, or becomes eligible for, pension benefits — even confirming, changing, or ending the agreement or order. How far BC courts have refined Boston in later case law was not verified for this commentary; treat the summary above as the SCC's framework, not a survey of current BC authority.

What is double-dipping in pension division? {#the-test}

Double-dipping, or double recovery, is collecting twice from the same pension. Here is how it happens.

A pension is property. When you separate, its future income stream is valued as a capital asset and put on the pension-holder's side of the ledger. If the pension-holder keeps the whole pension, the other spouse takes other assets of matching value — cash, the home, RRSPs (paras 2–3).

Years later the pension-holder retires. The pension stops being an asset and becomes monthly income. In the Court's words, the asset is being liquidated — spent down (para 2). If the other spouse now claims spousal support out of that pension income, she is drawing on an asset she was already paid for. That is the double dip (para 3).

Boston says the starting point is to fairly avoid double recovery: base support, where practical, on income that was never divided — earnings after separation, the undivided slice of the pension, other new income. And the spouse who took assets instead of the pension must use them to build her own retirement income, not bank them while living off the other's shrinking pension (paras 54–56, 64).

It is a starting point, not a wall. Where real hardship persists despite reasonable efforts, or where support is about need rather than compensating for the marriage, courts can still order support out of a divided pension (para 65).

The framework {#numbers}

The Boston analysis on a retirement variation, drawn from paras 54–66:

Step Question the court asks Boston's answer
1. Material change Has retirement materially changed circumstances? Retirement plus income now flowing from the already-divided pension can qualify (para 68).
2. Need and ability Does the recipient still need support? Can the payor pay? Always weighed alongside double recovery (para 62).
3. Identify undivided income What income was never part of the property division? Focus support on it where practical — here, $2,300/month of post-separation pension (paras 64, 73).
4. Recipient's assets Has the recipient used her settlement assets to generate income? She must, at least by the time the pension pays out; a capital-depleting income fund suffices (paras 56, 58).
5. Impute if not What if she has not invested? Court imputes income on actuarial evidence of what the assets could reasonably produce (para 66).
6. Exceptions Can double recovery ever be allowed? Yes — persistent hardship despite reasonable efforts, or support based mainly on need (para 65).

The matrimonial home is generally not counted as an asset the recipient must convert to income when support is compensatory (paras 59–60).

In Boston itself, an actuary calculated that $250,000 of the wife's assets in a life annuity would produce $18,025 a year for life; $500,000 would produce $36,050 (para 70). Her stated needs were $3,400 per month (para 70). Those figures anchored the $950 result.

What this means if you're separating in Surrey {#bc-impact}

If a pension is one of the big assets in your separation, Boston shapes decisions you make now, not just at retirement.

Choose your division method with retirement in mind. In BC, the Family Law Act Part 6 lets spouses divide the pension itself, so each of you has retirement income and the double-dip problem may never arise. If instead one spouse keeps the pension and the other takes the house or RRSPs — the Boston trade — expect the support picture to change when the pension starts paying.

If you took assets instead of the pension, plan to make them earn. Boston expects you to turn your settlement into retirement income by the time your former spouse's pension pays out. If you leave the money idle, a court can treat you as if you were earning income from it anyway. You are generally not expected to sell your home to do this where support compensates you for the marriage.

If you kept the pension, retirement is not an automatic escape from support. You can apply to change support — under s 167 and s 169 of the Family Law Act or s 17 of the Divorce Act — but the court will look at need, your ability to pay, and any part of your income that was never divided.

Write the agreement to answer the question in advance. A well-drafted separation agreement can say what happens to support at retirement and how the pension trade-off was intended to work. That is far cheaper than litigating it later. See also divorce in BC and our other case commentaries.

How a lawyer uses Boston {#in-practice}

Acting for a retiring payor, a lawyer uses Boston to argue the variation: identify what portion of today's pension income was already divided, show the recipient's asset position, and ask the court to base support on undivided income only. Actuarial evidence of what the recipient's assets could earn — like the annuity figures in Boston — does much of the work.

Acting for a recipient, the lawyer's job is to bring the case within Boston's exceptions: show reasonable efforts to generate income from settlement assets, persistent economic hardship flowing from the marriage or its breakdown, or that support was grounded in need rather than compensation. The home is defended as outside the pool of assets that must produce income.

At the drafting stage, Boston pushes lawyers toward dividing the pension itself under FLA Part 6, or toward agreement terms that fix what retirement will mean — including whether support will be reviewed under FLA s 168 or s 169 when benefits begin. In mediation, the Boston framework gives both sides a shared map of what a judge would likely weigh.

Frequently asked questions {#faq}

Does spousal support automatically end when the paying spouse retires?

No. Boston confirms support can continue past retirement. But retirement with income now coming from an already-divided pension can be a material change, letting the payor apply to reduce support. The court then weighs need, ability to pay, and double recovery together (paras 61–62, 68).

I took the house instead of my ex's pension. Do I have to invest my settlement?

Boston says yes, within reason. By the time the pension starts paying, you are expected to use your settlement assets to create retirement income — a simple income fund that pays out capital is enough. If you do not, a court can impute income to you. The home you live in is generally excluded where support is compensatory (paras 54–60, 66).

Is double-dipping ever allowed?

Yes. A court may permit support from an already-divided pension where the payor can afford it, the recipient has made reasonable efforts to earn income from her settlement assets, and hardship from the marriage or its breakdown still persists — or where the support order or agreement is based mainly on need rather than compensation (para 65).

References {#references}

Read the decision itself: Boston v Boston, 2001 SCC 43