Question Period Note: Bill C-12 – An Act to amend the Old Age Security Act (Guaranteed Income Supplement)

Why is Royal Assent of Bill C-12, An Act to amend the Old Age Security Act (Guaranteed Income Supplement), required before March 4, 2022 important?

• The Government of Canada recognizes that some Guaranteed Income Supplement and Allowance recipients may face lower benefit payments because of the income they receive from pandemic benefits.

• As a first step toward addressing this issue, we will issue a one-time grant payment to GIS 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 Bill C-12 in the House of Commons. This bill proposes to amend the Old Age Security Act to exempt federal pandemic benefits from the calculation of income for GIS/Allowance purposes in future years, beginning in July 2022.

• Royal Assent of these amendments is required by March 4, 2022. This will provide enough time to implement the required IT system changes to adjust the GIS calcultion.

• This timeline will also ensure that this measure can be implemented without disruptions to the ongoing and timely delivery of Old Age Security benefits to seniors.

The Government of Canada recognizes that some Guaranteed Income Supplement (GIS) and Allowance recipients may face lower benefit payments because of the income they received from federal 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.
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 Old Age Security Act to exempt federal pandemic benefits from the calculation of income for GIS/Allowance purposes in future years, beginning 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.
Royal Assent of these amendments is required by March 4, 2022 at the absolute latest to ensure adequate time to implement the required IT system changes, and to ensure there are no disruptions to the ongoing delivery of Old Age Security (OAS) benefits to seniors.

Implementation Considerations

The Canada Revenue Agency (CRA) will start providing Service Canada with its updated weekly data feed of income information on March 11, 2022. This data feed covers all income-tested benefits from previous tax years as well as 2021.

Given the work needed to program its IT system to exclude pandemic benefits from this data feed, the CRA needs legislative authorities to be in place by March 4th at the absolute latest to ensure that the data provided will be in compliance with the legislation.

Any delay of the income feed to ESDC past March 11, 2022 would create larger, visible service delivery issue for tens of thousands of clients, including vulnerable clients, for example:

• Any delays in receiving the CRA income feed would have significant impacts on ESDC’s ability to service clients (i.e. put clients into pay, change rate of pay, etc.).

• There are up to 30,000 transactions per week in ESDC that require income information for processing purposes that could be delayed and this impact would be compounded with each week of delay.

• On an ongoing basis, there are a number of clients deemed to be in dire financial need, some of which are referred to the department by MPs. Without timely access to the income data feed needed to process income-tested benefits, the ability to get these clients into pay or adjust their benefits would be impacted.

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