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

What has the Government done to help low-income seniors who lost Guaranteed Income Supplement benefits this year because they received pandemic benefits last year?

• Pandemic benefits such as the Canada Emergency Response Benefit (CERB) and the Canada Recovery Benefit (CRB) were intended to offer support to people who lost their job during the pandemic.

• However, the Government recognizes that some Guaranteed Income Supplement (GIS) and Allowance recipients may have faced financial hardship because of the income they received from these pandemic benefits.

• That is why this Government acted swiftly to provide a one-time grant payment to fully compensate these seniors for the GIS and Allowance benefits they lost in July 2021, as a result of receiving the CERB or CRB in 2020.

• As of April 19, 2022, my department had issued over 213,000 grant payments to affected seniors, including over 1,200 payments that were issued manually in March 2022 to GIS recipients in dire financial need.

• In order to ensure that this issue does not recur, we have also amended the Old Age Security Act to exclude federal pandemic benefits from the calculation of GIS and Allowance benefits, beginning in July 2022. These amendments will prevent GIS/Allowance recipients who received pandemic benefits in 2021 or later from a loss or reduction in their future GIS/Allowance benefits.

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.

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 Income Tax Act (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 this year 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 will have been issued to 213,116 individuals between March and April 2022.

To ensure that this issue does not recur, 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 Old Age Security 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 will take effect beginning in the July 2022 to June 2023 GIS payment period.

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