Citation: 2006TCC324
Date: 20060720
Docket: 2005‑3391(OAS)
BETWEEN:
LENA
MATTINA,
Appellant,
and
THE MINISTER OF HUMAN RESOURCES DEVELOPMENT CANADA,
Respondent.
REASONS FOR JUDGMENT
Angers, J.
[1] This matter came
before this Court by notice of referral from the Office of the Commissioner of
Review Tribunals Canada Pension Plan/Old Age Security pursuant to
subsection 28(2) of the Old Age Security Act (the "Act").
The appellant is appealing a decision of the Minister of Human Resources
Development (the "Minister") dated June 14, 2005, refusing
the appellant's request that her income for the purpose of determining her
entitlement to the guaranteed income supplement ("GIS") for the
period from July 2005 to June 2006 (the "period in question")
be based on estimated income for calendar year 2005 rather than on her actual income
for the 2004 taxation year.
[2] The appellant is
relying on subsections 14(4) and (6) of the Act to have her GIS entitlement
on an estimate of her income for 2005. The facts giving rise to this appeal are
not in dispute, as the assumptions of fact on which the Minister relied are admitted
by the appellant.
The facts
[3] On April 1,
2005, the appellant made an application for renewal of the GIS for the period
in question. The appellant had three sources of income in 2004; Canada Pension
Plan benefits of $5,069.52, other pension income of $5,404.40, paid to her by
the Ontario Municipal Employees Retirement System (OMERS), and interest income
of $77.00. The OMERS pension payment included a lump sum of $3,175.88, the remainder
being made up of the appellant’s ongoing monthly benefit payments.
[4] The lump sum
payment by OMERS to the appellant was due to a miscalculation by OMERS on
account of which it had failed to pay the appellant, as the surviving spouse,
the proper annual inflation protection increases from the time of her husband's
death in 1991 to April 2004. The increases should have been calculated on the
basis of her spouse’s disability waiver date rather than the pension
commencement date. As a result, her entitlement to inflation protection
increases was not fully reflected in her pension payments and the appellant
received the one‑time lump sum retroactive pension payment of $3,175.88.
[5] The Minister
received the appellant's statement of estimated income form on April 5,
2005. The form was sent by the appellant in order to have her GIS for the
period in question calculated on the basis of an estimate of her income for the
2005 calendar year rather than on the basis of her actual income for the 2004 taxation
year. The Minister refused to consider the estimated income form submitted by
the appellant as there was no retirement nor was there any reduction in, or
cessation of, the appellant's income, and the lump sum payment received by the appellant
was not made in order to replace a weekly, semi‑monthly or monthly
payment. The appellant, in the Minister’s opinion, is thus not eligible to
exercise the option provided for under the Act.
[6] The relevant
provisions of the Act are subsections 14(4) and (6). They read as
follows:
14(4) Where in a current payment
period a person who is an applicant, or who is an applicant's spouse or common‑law
partner who has filed a statement as described in paragraph 15(2)(a),
suffers a loss of income due to termination or reduction of pension income, the
person may, not later than the end of the payment period immediately after the
current payment period, in addition to making the statement of income required
by subsection (1) in the case of the applicant or in addition to filing a
statement as described in paragraph 15(2)(a) in the case of the
applicant's spouse or common-law partner, file a statement of the person's
estimated income for the calendar year in which the loss is suffered, other
than pension income received by that person in that part of that calendar year
that is before the month in which the loss is suffered, in which case the
person's income for the base calendar year shall be calculated as the total of
(a) the person's income for
that calendar year, calculated as though the person had no pension income for
that calendar year, and
(b) any pension income
received by the person in that part of that calendar year that is after the
month immediately before the month in which the loss is suffered, divided by
the number of months in that part of that calendar year and multiplied by 12.
14(6) Where, in the circumstances
described in paragraphs (a) and (b), a person who is an
applicant, or who is an applicant's spouse or common-law partner who has filed
a statement as described in paragraph 15(2)(a), suffers a loss of
income due to termination or reduction of pension income, the person may, not
later than the end of the current payment period, in addition to making the
statement of income required by subsection (1) in the case of the
applicant or in addition to filing a statement as described in paragraph 15(2)(a)
in the case of the applicant's spouse or common-law partner,
(a) where the loss is
suffered in the last calendar year ending before the payment period, file a
statement of the person's estimated income for the calendar year ending in the
current payment period, in which case the person's income for that calendar
year is deemed to be the person's income for the base calendar year; and
(b) where the loss is
suffered in a month that is before the payment period and after the last
calendar year ending before the payment period, file a statement of the
person's estimated income for the calendar year ending in the current payment
period showing also the amount of pension income actually received by the
person in that part of that calendar year that is before the month in which the
loss is suffered, in which case the person's income for the base calendar year shall
be calculated as the total of
(i) the person's income for that
calendar year, calculated as though the person had no pension income for that
calendar year, and
(ii) any pension income received
by the person in that part of that calendar year that is after the month
immediately before the month in which the loss is suffered, divided by the
number of months in that part of that calendar year and multiplied by 12.
[7] Section 14 of
the Old Age Security Regulations (“Regulations”) made under the Act
defines "pension income" as follows:
14. For the purposes of section 14
of the Act, "pension income" means the aggregate of amounts received
as
(a) annuity payments;
(b) alimony and maintenance
payments;
(c) employment insurance
benefits;
(d) disability benefits
deriving from a private insurance plan;
(e) any benefit, other than
a death benefit, under the Canada Pension Plan or a provincial pension
plan as defined in the Canada Pension Plan;
(f) superannuation or
pension payments, other than a benefit received pursuant to the Act or any
similar payment received pursuant to a law of a provincial legislature;
(g) compensation under a
federal or provincial employee's or worker's compensation law in respect of an
injury, disability or death;
(h) income assistance benefits
under an agreement referred to in subsection 33(1) of the Department of
Human Resources Development Act by reason of a permanent reduction in the
work force as described in that subsection; and
(i) income assistance
benefits under the Plant Workers' Adjustment Program, the Fisheries Early
Retirement Program or the Northern Cod Adjustment and Recovery Program by
reason of a permanent reduction in the work force.
[8] The issue is
whether the Minister was justified in refusing to allow the option under
subsections 14(4) and (6) of the Act to be exercised by the appellant
for the period in question.
[9] The option is
available if a person, among other things, suffers a reduction of pension
income in a current payment period. There is no doubt that such would be the
case in the fact situation here if the lump sum the appellant received
constituted pension income. In my opinion, the amount received by the appellant
from OMERS does qualify as pension income as defined in the Regulations. As
such, it should entitle the appellant to exercise the option, as she sought to
do.
[10] She received the lump
sum as a result of a mistake made by OMERS in calculating the annual inflation
protection increases to which she was entitled. Had these inflation increases
been properly calculated, the appellant's pension income would have reflected
that change and the amount of the increase would have been treated as pension
income. In my opinion, the lump sum received by the appellant in this case
constitutes pension income added to her other pension payments and accordingly
is pension income within the meaning of paragraph 14(f) of the
Regulations. The appellant would suffer a reduction of that pension income in
the following year, which would allow her to file a statement of her estimated
income for the calendar year in which the pension is reduced. The receipt by
the appellant of a retroactive pension income payment in the preceding year
will obviously mean a reduction of her pension income in the current year. A
retroactive payment of pension income in the form of a lump sum retains its
identity as pension income even though it is paid in a lump sum. The Minister
is therefore not justified in refusing to allow the option to be exercised by
the appellant. The appeal is allowed.
Signed at Edmundston, New Brunswick, this 20th day of July
2006.
“François
Angers”
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