Question Period Note: IMPACT OF THE CANADA EMERGENCY STUDENT BENEFIT ON THE GUARANTEED INCOME SUPPLEMENT

Why is the Government not compensating low-income seniors who lost Guaranteed Income Supplement (GIS) benefits because they received the Canada Emergency Student Benefit (CESB)?

In 2022, the Government provided a one-time grant payment to compensate seniors who faced financial hardship because they lost the Guaranteed Income Supplement (GIS) and Allowance benefits after receiving pandemic benefits.

To ensure that this issue does not recur, we also amended the Old Age Security Act to exclude federal pandemic benefits received in 2021 or later from the calculation of GIS and Allowance benefits, beginning in July 2022.

While these measures include many pandemic benefits, they do not include all of the sources of income that a person may have accessed during the pandemic, and which could have impacted GIS or Allowance entitlements.

By establishing simple, clear eligibility criteria for this grant payment, we were able to ensure that payments were issued urgently to affected clients, and without the need for an application.

The Guaranteed Income Supplement (GIS) is an income-tested benefit. Income for GIS calculations is defined in section 2 of the Old Age Security Act (OAS Act). This section states that for the purposes of determining the amount of GIS benefits, the income of a person or of a couple, is the income of that person or couple for that year as computed in accordance with the Income Tax Act (ITA).

Any income that is considered to be net income under the ITA is used to determine the amount of GIS. This includes any money that a pensioner receives other than the OAS pension, including Canada Pension Plan benefits, employer-sponsored pensions and private pensions, Employment Insurance benefits, Registered Retirement Savings Plan withdrawals and workers’ compensation benefits, net employment or self-employment income, that is over and above the GIS earnings exemption, and other income.

Pandemic benefits, such as the Canada Emergency Response Benefit (CERB) and the Canada Recovery Benefit (CRB) were intended to support people who lost their job during the pandemic. However, as these benefits are defined as taxable income under the ITA, they are also considered as income when determining entitlement to the GIS and Allowance benefits.

The Government of Canada recognizes that some GIS and Allowance recipients faced lower benefit payments because of the income they received from these pandemic benefits 2020. As part of the 2021 Economic and Fiscal Update, the Government announced up to $742.4 million for one-time payments to alleviate the financial hardship of GIS and Allowance recipients who received the CERB or CRB in 2020.

The majority of these one-time payments were issued automatically in April 2022, without the need for an application.

1,285 expedited payments were issued manually between March 18 and March 25 to seniors in dire financial need.

211,831 payments were issued during the week of April 19.

In total, about $721.4M was issued to 213,116 individuals between March and April 2022.

The Terms and Conditions stipulate that this grant was not payable to individuals who may have suffered a loss of GIS/Allowance benefits due to receipt of the Canada Emergency Student Benefit (CESB). The CESB provided financial support to post-secondary students, and recent post-secondary and high school graduates in 2020 who were unable to find work due to COVID-19.

To prevent this issue from occurring in future years, the Government introduced Bill C-12 in the House of Commons in February 2022. This bill, which received Royal Assent on March 3, 2022, amended the OAS Act to exclude any income received under the CERB (including amounts paid under the Employment Insurance Act), the CRB, the Canada Recovery Caregiving Benefit, the Canada Recovery Sickness Benefit and the Canada Worker Lockdown Benefit from the calculation of income for GIS/Allowance purposes in future years.

This exemption applies to pandemic benefits paid in 2021 or later, and took effect beginning in the July 2022 to June 2023 GIS payment period.

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