Double Dipping in Family Law

What Is Double-Dipping?

Double-dipping is when one spouse ends up benefiting twice from the same asset — once during the division of property and again when that same asset is converted to income for spousal support.

For example, if a pension was divided during property equalization, it shouldn’t also be used later as income to calculate ongoing spousal support payments. Doing so would mean one spouse is effectively drawing twice from the same pot of money.

Double-dipping can arise in other situations too, such as with RRSPs, stock options, capital gains, or business interests. The general principle is that it’s unfair to double-count the same asset — but the law also recognizes that every family’s situation is different, and there are times when exceptions are justified.

Boston v. Boston (2001): The Leading Case

The Supreme Court of Canada’s decision in Boston v. Boston (2001) remains the key authority on double-dipping. In that case, the husband had retired and started receiving income from his pension — a pension that had already been considered during the division of property. He argued that his income for spousal support should only be based on the portion of the pension earned after the couple separated.

The Court agreed. It found that including the full pension income to calculate support would effectively allow the wife to benefit twice from the same source — once through property equalization and again through ongoing support. To avoid that unfair outcome, only the portion of the pension earned after separation could be used to assess spousal support.

When Double-Dipping May Be Permitted

Although double-dipping is generally avoided, there are times when it may be allowed. Courts can make exceptions in situations where:

• The paying spouse has enough financial resources to continue making support payments.
• The recipient spouse has made genuine efforts to generate income but still experiences financial hardship.
• Support is being paid based on need, rather than as compensation for contributions made during the relationship.

These exceptions allow judges to maintain fairness while still considering the practical realities of each case.

Pensions versus Business and Investment Income

Not all income sources are treated the same way. Pension income is different because drawing from a pension reduces the underlying capital that was already divided during equalization — making double-dipping more likely.

Business and investment income, on the other hand, is often treated differently. A business or investment can keep producing income without depleting its capital value. However, this can make things more complicated. For example, if a business’s value was included in the equalization calculation, and later income from the same asset is used to determine spousal support, the issue of double-dipping might arise.

Courts look closely at how the business was valued and what those valuations actually represent. If future earnings were already included in the business’s equalization value and then used again for support, that could amount to double-dipping. Careful financial analysis and clear evidence are key to preventing this overlap.

Striking the Right Balance

The rule against double-dipping is ultimately about fairness. It ensures that neither spouse benefits more than they should from the same asset, while still giving courts flexibility to address genuine need or hardship.

While Boston v. Boston set out the main principles — especially regarding pensions — each case depends on its own facts. Accurate valuations, reasonable expectations, and a balanced approach to income and property are all essential to achieving a fair result.