Question Period Note: AN ACT TO AMEND THE OLD AGE SECURITY ACT (GUARANTEED INCOME SUPPLEMENT)

How will the Governments bill help low-income seniors who were in receipt of pandemic benefits in 2021?

• Pandemic benefits, such as the Canada Emergency Response Benefit and the Canada Recovery Benefit, were intended to support people who lost their job during the pandemic.
• In the Economic and Fiscal Update we announced that we would relieve financial hardship faced by vulnerable seniors who received the CERB or CRB in 2020, and who saw a reduction of their GIS/Allowance benefits by making a one-time lump sum payment to them for benefits they lost starting in July 2021.
• To ensure that pandemic benefits do not penalize vulnerable seniors starting in July 2022, this bill proposes to automatically exempt federal pandemic from the calculation of income for GIS/Allowance.
• This is an issue all parties should agree on and be ready to pass this legislation by March 4 so system changes in time.

The Guaranteed Income Supplement (GIS) is an income-tested benefit payable to low-income seniors who receive the Old Age Security pension. The Allowances are income-tested benefits payable to 60 to 64 year-olds who are the spouses/common-law partners of GIS recipients, or who are widows/widowers.

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 are facing lower benefit payments this year because of the income they received from these pandemic benefits in 2020. To compensate those seniors, the Government will provide up to $742.4 million for one-time payments to alleviate the financial hardship of GIS and Allowance recipients who received the CERB or the CRB in 2020 and who faced a reduction or loss of GIS benefits in July 2021. It is anticipated that payments will be issued automatically in May 2022.

In order to ensure that this issue does not recur, this bill proposes to exempt any amount of CERB (including amounts paid under the Employment Insurance Act), CRB, Canada Recovery Sickness Benefit (CRSB), Canada Recovery Caregiving Benefit (CRCB) and Canada Worker Lockdown Benefit (CWLB) from the calculation of income for GIS/Allowance purposes in future years. These amendments would prevent seniors who received pandemic benefits in 2021 or later from experiencing a loss or reduction in their future GIS/Allowance benefits.

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

None