Mr. Speaker, old age security, OAS, benefits are intended to provide partial income security for seniors in recognition of the contributions that they have made to Canadian society and the economy. Low-income pensioners are entitled to additional assistance through the guaranteed income supplement, GIS. The GIS is calculated based on income to ensure that these benefits are provided to seniors most in need.
The GIS is paid at a different rate based on whether seniors are single or part of a couple. This reflects the different economic realities of single seniors and senior couples.
Since 1971, the Old Age Security Act has contained a provision that allows low-income couples in receipt of the GIS and who are forced to live apart for reasons beyond their control to receive their benefits at the higher single rate based on their individual incomes. The intent of this provision was to recognize the increase in cost of living where one member of a couple remained in the matrimonial home while the other was required to go into a chronic care facility, nursing home, or home for the aged. These couples are often described as being “involuntarily separated”. In budget 2016, the OAS Act was amended to extend this provision to involuntarily separated couples where one member receives the GIS and the other receives the allowance. These amendments came into force on January 1, 2017.
In January 2017, the department issued an administrative policy direction to front-line Service Canada staff in order to reflect the expanded scope of the provisions for GIS/allowance couples. The department also took the opportunity to clarify the intent of the legislation with respect to eligibility for the involuntary separation provisions.
Specifically, the policy guidance was amended to state that couples must first qualify for the GIS on the basis of their joint income before the involuntary separation provisions could be applied. In order to address any possible situations where individuals had been paid under these provisions while their combined income was above the allowable threshold, a “grandfathering” clause was included to ensure that no current beneficiaries would see a reduction in their benefits.
Shortly thereafter, the department received an enquiry from Mrs. Vecchio’s office with respect to this policy direction. Departmental officials met with Mrs. Vecchio on June 21, 2017, in order to hear her concerns in person. At that meeting, she expressed her concerns about couples whose combined income is sufficient to render them ineligible for the GIS, but who may have a large disparity of income between the spouses. She noted in particular that in these situations, if the higher income spouse requires long-term care, the higher costs for that care could result in a significant reduction in the pooled income available to the lower income spouse.
As a result, the Minister of Families, Children and Social Development asked his officials to undertake a further analysis on the impact of the January 2017 policy directive. It became apparent that the implementation of this policy guidance was disadvantaging modest income couples. The minister has therefore tasked the department to correct this issue, by assessing the eligibility of couples involuntarily separated based solely on their individual incomes.
The department has already begun identifying senior couples who were affected by the January 2017 policy direction, a process that will be completed by the end of October. Departmental officials will subsequently reassess the benefit entitlement of any couples who were impacted by the January 2017 directive. The number of couples impacted by the directive is expected to be low.