The spouse in the house

BY: VALERIE DYE

Some Canadian statues recognize the existence of a common-law spouse as well as the existence of a legally married spouse. Where a person is separated from a legally married spouse but not divorced and is in a common-law relationship with another person, that person essentially has two spouses.

Where a deceased dies leaving two spouses this may present a challenge depending on what benefits are being sought by either spouse. 

The 2012 case of Carrigan vs Carrigan illustrates the challenges that can be faced by surviving spouses one of whom is legally married and the other being common-law. In that particular case, the benefit being claimed was the deceased’s pre-retirement death benefits under the Pension Benefits Act (PBA). Section 1 of the PBA describes a ‘spouse’ as being either (a) persons married to each other, or (b) persons not married to each other but living together in a conjugal relationship for at least three years or a relationship which has some permanence by virtue of the parties having either natural or adopted children. In the Carrigan case, the deceased had spouses that fit both descriptions as he was separated from one spouse and living with another. Both spouses claimed entitlement to the death benefits. What seemed clear is that while both legally married spouse and a common-law spouse are entitled to benefits by virtue of the Act, the Act did not contemplate both types of spouses existing at the same time.

Section 48(1) of the PBA states that where a member dies before pension payment begins the person who is his or her spouse at the time of death becomes entitled to the benefits. Section 48 (6) states that where the person has no spouse at the time of death the designated beneficiary becomes entitled to the death benefits. Before the amendment to the PBA, section 48 (3) stated that a spouse was not entitled to the benefits if that spouse was separated from the deceased at the time of death. By virtue of that section, Mrs. Carrigan who was the married spouse was not entitled to the Pension Benefits. However, since the Act did not contemplate the existence of two spouses at the same time, the common-law spouse was not entitled either. In this particular case, the deceased had named his married spouse and his children as beneficiaries to his pension. The result of this was that even though Mrs. Carrigan could not receive the benefits because she was separated from Mr. Carrigan, she received the benefits by virtue of being a designated beneficiary. The common-law spouse did not receive any benefits.

The case forced an amendment to the PBA for the benefit of common-law spouses. Section 48(3.1) of the Act now provides that where a deceased has a legally married spouse from whom he is separated at the time of death and is living with a common-law spouse, the common-law spouse becomes entitled to death benefits. This is colloquially referred to as ‘The spouse in the house” rule. This amendment came into effect in July 2014 and is not retroactive. As such, as mentioned in the case of Hewlett v. Ontario (Superintendent Financial Services), for deaths that occurred prior to July 2014 common-law spouses will not benefit.

This amendment aims at removing the type of confusion that occurred in the Carrigan case. But is this the end of the matter? What of the situation where a deceased has not been separated from his married spouse but has a relationship of some permanence with another spouse with who he resides (at least partly) and has children? Despite the amendment to the PBA can two spouses still be entitled to one pension benefit?