8 December 2000 Ministerial Correspondence 2000-0054214 - GUARANTEED INCOME SUPPLEMENT

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.

December 8, 2000

XXXXXXXXXX

Dear XXXXXXXXXX:

I am writing in response to your letters of August 2 and 15, 2000, addressed to the Honourable Jane Stewart, Minister of Human Resources Development, concerning entitlement to the Guaranteed Income Supplement (GIS) of two of your constituents under the Plant Workers' Adjustment Program.

An individual's entitlement to the GIS is generally based on the individual's income for the preceding calendar year. The Old Age Security Act states that, for GIS purposes, income is computed in accordance with the Income Tax Act.

In certain circumstances, the Old Age Security Act allows individuals to use an estimate of income for the current year rather than the actual income for the preceding year. This is commonly referred to as the optional income provision. The result is immediate relief to low-income pensioners when income for the current year is reduced because of a loss of employment, the cessation of a business or a reduction in pension income.

I understand that the two constituents who wrote to you were previously employed in the fishing industry and received benefits under the Plant Workers' Adjustment Program, The benefits individuals receive under this program must be included in the individual's income in the year received and, for income tax purposes, they are considered "other income," and not pension income. This reduces their 015 entitlement in the year following receipt. In addition, the individuals cannot benefit from the optional income provision.

For purposes of the optional income provision, the Old Age Security Regulations provide a definition of "pension income". However, it does not include benefits which are taxed as "other income" under the Income Tax Act. Because the assistance received under the Plant Workers' Adjustment Program is not pension income, an individual is unable to obtain relief under the GIS optional income provision for this particular source of income. Therefore, the GIS payments are reduced until the next renewal period.

Human Resources Development Canada administers the 015 program according to the current legislation. I must confirm that the Income Tax Act and the Old Age Security Act have been applied correctly, and legislative changes would be required before relief could be provided.

I trust the foregoing addresses your concerns.

		Yours sincerely,

		Martin Cauchon