Recommendation 1

The Committee recommends that HRDC, in conjunction with other relevant federal departments, work immediately to develop an automatic notification process so as to ensure that all potential GIS applicants, prior to their 65^th birthday, are apprised of the availability of this income support.

Recommendation 2

The Committee recommends that:

(a)    HRDC, in conjunction with the CCRA, take the necessary steps to develop an automatic
         process for renewing GIS eligibility; and

(b)    HRDC take immediate steps to simplify the initial application for the GIS and that tax returns or a simple
  statement of income and family status be used for the purposes of ensuring continued eligibility. HRDC should
  ensure that the initial application and the simple statement of income and family status are mailed to all GIS
   recipients who do not file a tax return.

3.  Retroactivity

According to Section 11(7) of the Old Age Security Act, the maximum period for a retroactive GIS payment is 11 months before the month in which the application is received.[13]  Some of our witnesses expressed the view that this period is too short. While the Committee agrees that the onus is on the individual to apply for this income assistance, HRDC and the CCRA also have a responsibility to ensure that low-income seniors are aware of their entitlement to this support. Given the prolonged existence of the GIS under-subscription problem, we do not believe that these departments, especially HRDC, have satisfactorily met this responsibility.

While the 11-month period for retroactive GIS payments seems somewhat arbitrary, we were told that other federal income support programs receive similar treatment. This was not always the case; in 1995 the maximum period for a retroactive OAS payment was reduced from a longstanding five years to one year.[14] In addition, while 11 months is the maximum period for a retroactive Child Tax Benefit payment, we were told that Section 122.62(2) of the Income Tax Act can be used to extend this period.

In considering the issue of retroactivity, three conditions must be taken into account.  These are that:

(1)     eligible low-income seniors who have resided in Canada for at least 10 years after reaching 18 years of 
   age are entitled to OAS and GIS payments;

(2)     special consideration should be afforded this group because of their age and health; and,

(3)     HRDC and the CCRA are responsible for informing low-income seniors of their potential entitlement
   to this income support.

The Committee believes, therefore, that the period for retroactive payments under these programs should be lengthened in instances where HRDC or, if applicable, the CCRA have failed to inform individuals of their potential entitlement to this income support.[15] 

Recommendation 3

The Committee recommends that the government consider adopting a variable retroactive GIS or Allowance payment period.  This policy should permit a retroactive payment covering the full period of entitlement. Individuals who waived their entitlement to these programs should not be entitled to a retroactive payment in the event that they subsequently apply.

4.  The Treatment of Occasional Income

When a low-income senior receives money from occasional income (such as cashing in an RRSP or an insurance policy), this additional money will affect the amount of the GIS or Allowance that this individual receives.[16]  The GIS would be reduced on a sliding scale as a recipient’s annual income rises.  The impact of this additional income on the GIS is felt the year after the income is received. Eligibility for, and the amount of, the GIS is automatically reviewed and determined when the CCRA transmits an individual’s tax information to HRDC’s Income Security Programs.  HRDC normally advises GIS recipients each July about the monthly amount of their GIS for that year.

It is important to note that the impact of occasional income may also have other effects.  It would likely affect an individual’s income tax status.  For example, a GIS recipient who cashes in an RRSP or an insurance policy would be liable to pay income tax on this income.  The tax payable would have an effect on a pensioner’s disposable income.  In addition, provincial benefits, either cash or in kind (e.g. drug plans, heating subsidies etc.), that use an individual’s GIS eligibility as the criterion to determine eligibility for these provincial programs would be affected.  The impact, however, varies from province to province as well as from program to program within an individual province.

The federal government can change the rules for the treatment of occasional income to affect seniors’ benefits and taxable income but, on its own, cannot deal with the consequences (likely unintended) on provincial benefits.

There is no strong policy rationale to restrict a change in the treatment of occasional income to any particular group of seniors who receive the GIS or Allowance.  The principle of horizontal equity (treating like, alike) or, in other words leveling the playing field, could be seen as the most obvious rationale for exempting occasional income from having an impact on cash benefits received.  Obviously, any person who is eligible for the GIS is deemed to be in need of additional income assistance, and the extent to which this assistance (presumably used to pay for basic essentials) should be withdrawn and reduced for a year following the receipt of occasional income would be difficult to justify.

The Committee strongly believes that no GIS recipient should face financial hardship because he or she receives some occasional income.

Recommendation 4

The Committee recommends that the Government of Canada define “occasional income” and exempt a certain level of occasional income for the purposes of the GIS and the Allowance.

5.  Recent Steps to Address the Problem

The Committee is very concerned with the inertia exhibited by HRDC in addressing the GIS under-subscription problem. As noted above, HRDC’s awareness of this problem dates back to at least 1993.

Since the recent media attention afforded this issue, HRDC and the CCRA have initiated a number of steps to try and identify those who may be eligible for the GIS, but are not receiving it. We were informed that the CCRA is currently developing a list of low-income seniors who received OAS in 2000, but who did not receive the GIS. This list, expected to be completed by the end of 2001, will be forwarded to HRDC. The Department then intends to contact each individual on the list to determine eligibility and interest in receiving the GIS. CCRA is also providing information on the GIS to every low-income senior who filed a tax return in 2000 and who did not receive the OAS or the GIS.[17] Information about the GIS will also be added to tax information for seniors, notably the T-1 SA guide, a publication that is used extensively by seniors.

HRDC and the CCRA are also jointly participating in a pilot project in the far north to help seniors in that region understand the GIS and apply for it.  The Committee was also told that HRDC staff in Toronto have visited approximately 28 shelters and support organizations for homeless people, a group that is typically difficult to reach. As well, HRDC attempts to advertise the GIS through production of brochures, fact sheets, inserts and advertising supplements in magazines, newspapers and community newsletters.

Given the continued magnitude of the under-subscription problem, HRDC must obviously enhance and improve its efforts to publicize the GIS.  The Committee was reminded by its own members and several witnesses that many seniors rely almost completely on television and radio for their information. As well, we were advised that messages had to be simple, clear and relayed repeatedly, to allow for poorer memories among some seniors.  Publicizing the GIS using mostly print media and web-sites is of little use for seniors who have poor eyesight, lack literacy skills, cannot afford magazine subscriptions and do not own computers.

Recommendation 5

The Committee recommends that HRDC undertake an extensive and systematic public awareness campaign to ensure that all seniors receive clear, simple and easily understood information on how to access information on the GIS. HRDC should also take special measures to contact individuals who are difficult to contact through conventional public awareness initiatives.   

6.  Better Departmental Performance and Reporting

While we applaud many of the recent initiatives taken by HRDC as better late than never, Committee members continue to be perplexed as to why it has taken HRDC so long to deal effectively with this long-standing problem. We were told that one of HRDC’s primary objectives “is to ensure that everyone receives the benefits to which they are entitled to under these programs.”[18] In our opinion, HRDC has failed to attain this primary objective for too many years. Moreover, we regret that the recent action taken by HRDC to address this problem seems to be inextricably linked to the recent media attention afforded this issue rather than the Department’s purported commitment to improve its services and become a truly client-centred organization.

Recommendation 6

The Committee recommends that HRDC and the CCRA continue to work together to identify and contact directly seniors who may be eligible for the GIS. In the event that an eligible senior declines his or her GIS (or OAS or Allowance) payment, HRDC and, where applicable, the CCRA, should obtain a waiver to this effect. Eligible individuals who sign this waiver and choose not to receive the GIS (or OAS or Allowance) should not be entitled to a retroactive payment in the event that they subsequently apply.

In its most recent performance report, HRDC states that its mission is to provide Canadians with secure income security programs for seniors as demonstrated by sustainable and efficient Canadian Pension Plan and Old Age Security programs.  As of 1999-2000, one of the ways that the Department demonstrates meeting this commitment is by measuring the percentage of auto-renewals through the tax system and the percentage of reverted accounts.[19]  The Committee notes that the performance measures do not include the number of eligible Canadians who  have not applied even though the Department supplied the Committee with an internal report that shows that this, in fact, has been measured for several years.  This situation undermines the Committee’s confidence not only in the results measures for the GIS, but in  HRDC’s performance report overall.