REASONS
FOR JUDGMENT
Hogan J.
I.
Introduction
[1]
The Appellant, Leon Quesnel, appealed to the
Social Security Tribunal of Canada (“Social Security Tribunal”) regarding a
decision in respect of his entitlement to the guaranteed income supplement
(“GIS”). The periods at issue are July 2012 to June 2013 and July 2013 to June
2014 (the “Relevant Periods”).
[2]
The GIS is intended to provide assistance to old
age security pension recipients with modest income. Income earned by applicants
and their spouses reduces the amount of this monthly benefit.
[3]
Under subsection 28(2) of the Old Age
Security Act (“OAS Act”), the Social Security Tribunal must refer to this
Court questions of income and sources of income that are relevant to the
calculation of the GIS for a payment period. Such reference was made in
relation to Mr. Quesnel’s appeal.
II.
Factual Background
[4]
In determining the Appellant’s entitlement to
the GIS for the Relevant Periods, the Minister of Employment and Social
Development (the “Minister”) relied on the following assumptions of fact:
a)
The Appellant remarried
on December 28, 2012.
January to June 2013 payment period
b)
The Appellant reached
the age of 65 in April 2011.
c)
The Appellant began
receiving OAS pension and GIS benefits in May 2011, the month following his 65th
birthday.
d)
The Appellant’s spouse
passed away on August 17, 2011.
e)
Following this event,
the Appellant was advised by letter dated August 24, 2011, that effective as of
the payment period of September 2011, he was no longer qualified for the GIS
since his income for 2010 was above the maximum income threshold for the
September 2011 payment period for a single person of $16,176.00, as the
Appellant’s income was $28,712.00.
f)
On August 7, 2012, the
Appellant submitted a GIS application for the July 2012 to June 2013 payment
period.
g)
On August 30, 2012, the
Minister informed the Appellant of its decision to deny the request in light of
the Appellant’s income for 2011 in the amount of $27,818.01, as it was above
the maximum income threshold for the July 2012 payment period of $16,512.00.
h)
Following his
retirement on October 27, 2011, the Appellant submitted a Statement of
Estimated Income after Retirement or Reduction in Pension Income Year 2011
form, on August 7, 2012, also, in which he estimated income from CPP,
Employment Insurance (EI) and a part-time job.
i)
By letter dated October
2, 2012, the Minister informed the Appellant that his estimated income for
2011, in the amount of $16,864.00 was above the maximum income threshold for
2011 of $16,320.00 to qualify for the GIS for the November 2011 to June 2012
payment period.
j)
On August 30, 2012, the
Appellant submitted a Statement of Estimated Income after Retirement or
Reduction in Pension Income Year 2012 form, stating that in addition to his
retirement in October 2011, he also ceased to receive EI benefits on August 25,
2012. He estimated income from CPP, EI and a part-time seasonal job. The amount
of employment income estimated was $1,770.00.
k)
By letter dated October
2, 2012, the Minister informed the Appellant that his estimated income for 2012
after his retirement and prior to his loss of EI benefits was $16,551.00 and
that he did not qualify for the GIS for the July to August 2012 payment period.
l)
It was also determined
that the Appellant’s estimated income for the period following his loss of EI
benefits for 2012, was $6,861.00 for the September 2012 to June 2013 payment
period and that he was therefore eligible for the GIS starting in September
2012.
m)
On May 27, 2013, the
Appellant submitted a Statement of Estimated Income after Retirement or
Reduction in Pension Income Year 2013 form.
n)
On June 13, 2013, the
Canada Revenue Agency (CRA) informed the Minister of the Appellant’s 2012
income of $8,506.00 as employment income instead of the $1,770.00 originally
estimated by the [Appellant] on his form.
o)
In light of the
information provided by the CRA, the Appellant’s estimated income for 2012 had
to be increased by $4,851.00 taking into account the earnings exemption of
$3,500.00 and a deduction of EI premiums in the amount of $155.66 (pursuant to
section 2 of the . . . OAS Act . . . definition of “income”), resulting in a
revised estimated income of $21,402.00 for the July 2012 to August 2012 payment
period and of $11,712.00 for the period of September 2012 to June 2013, for the
purpose of his GIS entitlement.
p)
On July 29, 2013, the
Appellant advised the Minister of his marriage to pensioner Marney Tower on
December 28, 2012.
q)
Since the Appellant
remarried in December 2012, his GIS entitlement for the period of January to
June 2013 had to be recalculated on the basis of the combined income of both
spouses at the married rate instead of a single income at the single rate.
r)
The combined income
included the Appellant’s estimated income for 2012 of $11,712.00 plus his
spouse’s income for 2011 of $28,814.00 for a total of $40,526.00.
s)
These two adjustments
resulted in an overpayment of $3,237.68 for the period of September 2012 to
June 2013.
July 2013 to June 2014 payment period
t)
The Minister also
reviewed the Appellant’s statement of estimated income for 2013 to determine
his GIS entitlement for the payment period of July 2013 to June 2014. On this
form, the Appellant estimated income from CPP and from employment.
u)
Since his estimated
income for 2013 was higher ($29,661.48) than his 2012 base calendar year income
($21,818.00), the Minister used the lower 2012 income to determine his
entitlement. However, his income combined to [sic] the estimated 2013
income of his spouse, in the amount of $10,110.00, totaled $31,928.00, more
than the maximum income threshold of $22,032.00 for July. As a result, the
Appellant was not entitled to GIS benefits for the payment period of July 2013
to June 2014.
v)
The Minister advised
the Appellant of the adjustments to his GIS benefits for the period of July
2012 to June 2013 and the non-entitlement to benefits for the period of July
2013 to June 2014 in a letter dated January 2, 2014.
[5]
The Appellant did not dispute the Minister’s
assumptions of fact.
III.
Issues to Be Decided
[6]
The issue in dispute is whether the Minister
properly calculated the Appellant’s GIS for the payment periods of July 2012 to
June 2013 and July 2013 to June 2014.
IV. Analysis
[7]
Generally speaking, the GIS is calculated each
year for a period of one year, from July of one year to June of the following
year. This period of time is called the payment period. In the present case,
the relevant payment periods are from July 2012 to June 2013 and from July 2013
to June 2014.
[8]
Generally speaking the GIS calculated for each
payment period is based on the total income of the pensioner for the previous
year, referred to as the income for the base calendar year.
[9]
For the payment period of July 2012 to June
2013, the base calendar year is 2011.
[10]
Section 2 of the OAS Act defines “income” for
the purpose of determining entitlement to GIS benefits as a person’s income for
the year computed in accordance with the Income Tax Act, with certain
exceptions. When the pensioner has a spouse or a common-law partner that
pensioner’s GIS is based on the total combined income of the couple.
[11]
When a pensioner becomes involved in a spousal
relationship, the pensioner’s GIS is to be calculated as though that pensioner
had a spouse in the month following the marriage. Subsection 12(6) of the OAS
Act provides the formula for determining the “monthly base income” for the
calculation of the GIS. In particular, paragraph (b) states that for married
pensioners part A of the formula is the aggregate of the incomes of the
applicant and the spouse for the base calendar year.
[12]
The Appellant remarried on December 28, 2012,
and advised the Minister on July 29, 2013. Since he remarried during the July
2012 to June 2013 payment period, his GIS benefit entitlement had to be
calculated on the basis of joint income effective January 2013, the month
following his marriage as required under subsection 15(6.1) of the OAS Act.
[13]
Since no estimate of income could be submitted
for the Appellant’s spouse for the period of January 2013 to June 2013, the
calculation of the Appellant’s GIS benefits for that period had to be based on
his spouse’s income for the base calendar year, which was 2011.
[14]
Since the Appellant’s spouse ceased her
employment in June 2013, the Appellant’s GIS eligibility for the payment period
of July 2013 to June 2014 could be based on his spouse’s estimated income for
2013 instead of her income from the base calendar year: 2012.
[15]
Section 14 of the OAS Act allows the Minister to
use a different method of computing a pensioner’s income when that pensioner
ceases to hold an office or employment, ceases to carry on a business or
suffers the loss or reduction of any pension income during a payment period.
When such an event occurs, the Minister is required to base the computation of
the pensioner’s income on an estimate of that pensioner’s pension income, income
from an office or employment, or business income following the event, to which
is added the income from the base calendar year from all other sources. This
alternate method of computing income for GIS purposes is commonly referred to
as the Option. Section 14 of the OAS Act allows the Minister to also use the
Option method to compute the income of a pensioner for the second payment
period after the event occurred.
[16]
Since the Minister’s assumptions of fact are
accepted by the Appellant, including the assumption regarding the amount of his
combined income, the Minister’s determination of the Appellant’s combined
income for the payment periods of July 2012 to June 2013 and July 2013 to June
2014 is correct. For these reasons the Appellant’s appeal is dismissed.
Signed at Ottawa, Canada, this 1st day of June 2017.
“Robert J. Hogan”
Email this Content