Question Period Note: IMPACT OF PANDEMIC BENEFITS ON THE GUARANTEED INCOME SUPPLEMENT

Why is the Government not providing immediate help to low-income seniors who saw a reduction or loss in Guaranteed Income Supplement because they received pandemic benefits last year?

• The COVID-19 pandemic has been hard on all Canadians and the Government of Canada has taken concrete measures to assist seniors, including the most vulnerable low-income seniors.

• Pandemic benefits such as the Canada Emergency Response Benefit and the Canada Recovery Benefits were intended to offer support to people who lost their job during the pandemic.
• However, the Government recognizes that some Guaranteed Income Supplement and Allowance recipients may now be facing financial hardship because of the income they received from these pandemic benefits.

• That is why we are moving as quickly as possible to provide a one-time payment to Guaranteed Income Supplement and Allowance recipients who received pandemic benefits in 2020, and experienced a reduction or loss in their benefits in July 2021. These payments will be issued automatically in May 2022, and without the need for an application.

• In order to ensure that this issue does not recur, we have also tabled legislation (Bill C-12) to amend the Old Age Security Act to exempt pandemic benefits from the calculation of Guaranteed Income Supplement and Allowances in future years.

• We will also increase the Guaranteed Income Supplement for all seniors aged 65 years and over in 2022, by $500 a year for single seniors and $750 a year for senior couples.

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).
For every $2 of net taxable income that a person (or a couple) receives, GIS benefits
are generally reduced by $1. For example, a single GIS recipient with a monthly income
of $100, other than the Old Age Security (OAS) pension, would have their GIS reduced by
$50 per month.
The Canada Emergency Response Benefit (CERB) is a taxable benefit, which was available in 2020 to those who stopped working for reasons related to COVID-19. It was jointly administered by both Service Canada and the Canada Revenue Agency. Eligible individuals could receive $2,000 per 4-week eligibility period, with a maximum available amount of $14,000.
The Government has also created additional recovery benefits for individuals, following the end of the CERB. The Canada Recovery Benefit (CRB) is a taxable benefit intended to give income support to employed and self-employed individuals who are directly affected by COVID-19 and are not entitled to Employment Insurance benefits. The CRB was available for a maximum of 54 weeks (or 27 two-week eligibility periods) from September 2020 to October 2021, with a maximum of $6,000 available in 2020.
As income from the CERB and CRB are defined as taxable income under the ITA, it must be considered as income for GIS purposes.
GIS benefits are paid on a 12-month payment period from July to June and are normally calculated on the basis of the previous year’s income (referred to as income for the ‘base calendar year’). Therefore, CERB and CRB income received by GIS recipients in 2020 could impact GIS benefits for the 12-month period beginning in July 2021.
The Government of Canada recognizes that some GIS and Allowance recipients are now facing lower benefit payments this year because of the income they received from these pandemic benefits. 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. These payments will be issued automatically without the need for an application in May 2022. This approach was selected as it is the quickest way of addressing the financial hardship these seniors are currently facing.
In order to ensure that this issue does not recur, the Government tabled legislation in the House of Commons (Bill C-12) on February 7, 2022. This bill proposes to amend the
OAS Act to exempt federal pandemic benefits from the calculation of income for GIS/Allowance purposes in future years, beginning in July 2022. This legislation needs to be approved by March 4, 2022, to ensure implementation in July 2022.
These amendments would prevent GIS/Allowance recipients who received pandemic benefits in 2021 or later from a loss or reduction in their future benefits.
This exemption would include any amount of CERB (including amounts paid under the Employment Insurance Act) and any amount of CRB that was paid in 2021. It would also include any Canada Recovery Sickness Benefits and Canada Recovery Caregiving Benefits paid in 2021 or later, and any Canada Worker Lockdown Benefits paid in 2022 or later.

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