Question Period Note: One-Time Grant (OTG) for Guaranteed Income Supplement (GIS) Recipients who Received Pandemic Benefits

What is the Government doing to help low-income seniors who have lost or had their GIS reduced because of emergency benefits, to ensure they have the support they need?

they are entitled.

• In response to seniors whose GIS was impacted as a result of these emergency and COVID recovery payments, the Government is providing a one-time grant to help alleviate the financial hardship of those seniors.

• To address the immediate financial hardship that some seniors are experiencing, the Department issued a small number of payments to seniors for whom the receipt of the payment a few weeks earlier would make a real and meaningful difference to their financial situation.

• All seniors eligible for the one-time grant who had directly contacted Service Canada or had contacted their Member of Parliament by February 28, 2022 and indicated that they were facing a severe financial situation, were issued the payment in March.

• The remaining one-time grant payments will be issued as early as April 19, 2022.

• To ensure that pandemic benefits received in 2021 and 2022 will not impact future GIS entitlement, Bill C-12 was passed.

The Old Age Security (OAS) pension is a monthly payment of a maximum of $642.25 (January to March 2022) for seniors aged 65 and older.

The Guaranteed Income Supplement (GIS) provides financial assistance to seniors who have little or no income other than the OAS pension. Currently, the program provides up to $959.26 per month for a single, widowed, or divorced OAS pensioner and up to $577.43 per month for each member of a couple (January to March 2022).

Annual Reassessment of the GIS

Once individuals are found eligible and start receiving the GIS, the amount a beneficiary is entitled to receive is reviewed every year effective in July and is based on the individual’s net income in the previous calendar year, or the combined net income in the case of a couple. Therefore, from year to year, GIS payments can increase, decrease or even cease according to reported changes in annual net income.

In order for a client’s entitlement for the GIS to be renewed each July, they should file an individual Income Tax and Benefit return with the Canada Revenue Agency by April 30. Alternatively, individuals can provide their income information directly to Service Canada. This can be done by phone, mail or in-person.

Using income information from an individual’s federal Income Tax and Benefit Return or the income information received directly from the individual, where applicable, Service Canada reviews the individual’s entitlement for the GIS and if the individual is still entitled, their benefits are automatically renewed.

Emergency Benefits Interaction and the GIS One-Time Payment

Under the OAS Act, working seniors can exempt a portion of their employment earnings from the calculation of their GIS benefits.

The GIS earnings exemption effectively reduces the level of earned income used to calculate GIS and Allowance benefits, allowing low-income seniors to earn a specified amount of income before triggering a reduction in benefits.

However, the Canada Emergency Response Benefit (CERB), the Canada Recovery Benefit (CRB), the Canada Recovery Caregiving Benefit (CRCB), and the Canada Recovery Sickness Benefit (CRSB) are defined as taxable income under the Income Tax Act, it must be considered as income for GIS purposes.

In response to seniors whose GIS was impacted as a result of these benefits, the 2021 Economic Fiscal Update proposed a one-time payment to alleviate the financial hardship of those seniors (approximately 183,000) who qualified to receive the CERB or the CRB in 2020 and experienced a decrease in GIS. The one-time payment will be issued by direct deposit in April; clients who have not signed up for direct deposit will receive a cheque by mail no later than the end of April 2022 and there is no need to apply. The vast majority (about 98%) of GIS and Allowance recipients are enrolled for Direct Deposit and will receive the payment with no delay.

To address the immediate financial hardship that some seniors are experiencing, the Department has issued a small number of payments between March 18-25 to seniors experiencing severe financial hardship. These payments have been issued manually, and as a result, it was only possible to provide these payments to a small number of seniors for whom the receipt of the payment just a few weeks earlier was making a real and meaningful difference to their financial situation.

To prevent this error from reoccurring, on February 8, 2022, the Government tabled Bill C-12, An Act to amend the Old Age Security Act (Guaranteed Income Supplement), to exclude any income received under CERB, CRB, CRCB, CRSB, and the Canada Worker Lockdown Benefit for the purposes of calculating the amount of GIS and Allowance payable beginning in July 2022. The Bill received Royal Assent on March 3, 2022

• Eligibility for the one-time payment is based on individuals who:
o Received a pandemic benefit in 2020;
o Were in receipt of GIS/Allowance in June 2021;
o Faced a reduction or loss of GIS/Allowance in July 2021; and
o Are eligible for GIS/Allowance in March 2022 (month the identification of eligible individuals will take place).

• The one-time payment is calculated as follows:
o Amount of the monthly reduction X 12 (months);
o For example if the reduction from June to July was $200/month then the one-time payment amount will be $2,400.

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