Good morning, everyone.
The Old Age Security Act currently prevents the payment of income-tested benefits to sponsored immigrants. I am mostly talking about the guaranteed income supplement, but also about the allowances.
However, the current provisions limit these payments only until the individual has reached 10 years of residence in Canada. This was in line with the length of sponsorship agreements for seniors. On January 1, 2014, an amendment was made to the Immigration and Refugee Protection Regulations to extend the sponsorship period of the individuals landing in Canada under the parents and grandparents category from 10 years to 20 years.
An amendment to the Old Age Security Act is needed to align with the new sponsorship period of 20 years, so that old age security income-tested benefits would not be paid for the entire length of the sponsorship period. The amendment will come into force through an order-in-council, likely in 2017, once the current backlog of applications for parents and grandparents has been eliminated.
Guaranteed income supplement benefits are meant to provide assistance to seniors most in need. The rationale for not paying the guaranteed income supplement during a period of sponsorship is that sponsors, and not taxpayers, are financially responsible for family members they sponsor.
The impact of this change on sponsored immigrants and on program costs will not be seen before 2027, as parents and grandparents subject to the new 20-year sponsorship rules will not start to arrive in Canada until 2017, and eligibility to old age security benefits under the current rules would have begun in 2027.
It is estimated that these amendments will affect 2,700 individuals in 2027, and 40,000 by 2036. Annual guaranteed income supplement savings are expected to amount to $23 million in 2027, to reach $700 million by 2036.
Of note, the amendment does not apply to the old age security pension. As this benefit is not based on income but solely on age, legal status and residence in Canada, sponsored immigrants will continue to be eligible for the old age security pension once they reach 10 years of residence in Canada.
The Old Age Security Act currently ensures the protection of sponsored individuals in situations of a sponsorship breakdown, such as a death, conviction, bankruptcy or incarceration of a sponsor for a period exceeding six months. The current protection provided in the legislation, in case of a sponsorship breakdown, will remain.
Thank you.