Toronto Family Law Lawyer Pei-Shing B. Wang 

It’s difficult when you lose your job. It’s far more difficult to lose your job while going through a separation or a divorce. Today’s post discusses some of the legal issues you may experience if you become unemployed during separation.

The most immediate impact of losing your job will be on your cash flow. The decrease of funds available to pay for household expenses will not only increase the conflict between the separating spouses but also make the division of assets more complicated. If the working spouse must take over the mortgage payments, will the other spouse be obligated to accept a lesser share of the matrimonial estate?

Aside from difficulties in accounting, the obligation to pay child and spousal support also becomes contentious when the payor loses his/her job. Will the support payable be based on the previous income, or will the payor be entitled to a discount?

What about custody arrangements? Now that one parent suddenly finds himself/herself with more free time, should the children be pulled out of daycare to cut down on expenses? What about an extended visit with the parent who is between jobs?

If the freshly unemployed spouse receives a large amount of severance pay, is the other spouse entitled to a share of it? What if the unemployed spouse continues to pay for the household expenses from the severance pay rather than relying on the one who is still working?

These questions are legally complicated, and the answers depend on the factual context of the individual case. In other words, there are no quick answers to any of them.

The pressure of not having employment income invariably adds to the stress of going through separation. While the loss of employment income requires more legal assistance to ensure a fair outcome, unfortunately for the client’s long-term financial health, the reduced funds tend to go elsewhere than to legal fees.

Therefore, it’s important to remain calm if you lose your job while going through separation. It will be helpful to assess the situation and make up a realistic budget to get through this difficult time. What’s more, you should definitely speak to a lawyer and come up with an action plan to tackle the challenges ahead.

This blog is provided for educational purposes and for your reference. It is not intended as legal advice and should not be regarded as such. The law may have changed since the publication of this article.