Tuesday December 14, 2021 | NATIONAL [Last update 6:25 pm Pacific]
by Mary P Brooke | Island Social Trends
Today was something of a win for low-income seniors who lost some or all of their Guaranteed Income Supplement (GIS) benefits for having taken CERB or CRB in 2020.
Today Deputy Prime Minister Chrystia Freeland delivered her Economic and Fiscal Update speech from Ottawa (remotely, due to possible exposure to the COVID virus), starting at 1 pm (Pacific) today.
On the issue of reversing the GIS clawback, Minister Freeland said:
“We are committing today to provide Guaranteed Income Supplement or Allowance beneficiaries who also received the Canada Emergency Response Benefit with a one-time payment to alleviate the financial hardship they may have faced as a result of an unintended interaction between the two benefits.”
That didn’t offer a lot of detail, but that was later cleared up during debate, when the NDP Finance Critic pressed for details.
Amount not yet specified:
Today in the federal economic update today, government proposed to “provide up to $742.4 million for one-time payments to alleviate the financial hardship of GIS and Allowance recipients (seniors) who received CERB or the Canada Recovery Benefit (CRB) in 2020”.
There was no mention by the Liberals of how much that one-time payment would be for each recipient, although after being pressed by NDP Finance Critic Daniel Blaikie in the house today, Freeland did indicate that something equivalent to full compensation would be paid to affected seniors.
Unless the payment covers the full amount that seniors won’t have received since August 2021, it would still leave the budgets of affected seniors quite seriously out of whack.
NDP request for clarification:
“Alongside low-income advocacy groups, seniors advocacy groups, and affected seniors themselves, the NDP has been pushing for months now for action on the GIS clawback,” said NDP Finance Critic Daniel Blaikie today in the House.
“We see some indication now of the approach the government intends to take. But it does raise some questions. The solution we were advocating for, was not to count the eligibility calculation for the GIS. The Parliamentary Budget Officer said that would affect about 88,000 seniors and cost about $434 million.”
“The government is instead proposing a program they say will affect about 200,000 people at a cost of about $742 million and that it’ll be a one-time payment,” the NDP Finance Critic said. “It’s unclear if seniors will be back-paid for the income that they lost, it’s unclear if their monthly payments will be restored so that they continue to have the monthly income they need to pay rent over the next number of years. Or whether they’re just going to be receiving a cheque.”
Some of the seniors have lost their home as a result of the GIS clawback, Blaikie outlined. He says those seniors have been “waiting for an announcement of what their life is going to look like going into the future.”
Mechanics of repayment:
“How are they going to determine how much is paid to each individual senior, how are they going to roll out the funds, when is it going to happen, and how is it going to help ensure they’re going to have the money they need to get back into an apartment and pay rent for the next 12 months. Instead of just getting a one-time, thank you very much, sorry for the inconvenience, from the government,” concluded Blaikie today.
Deputy Prime Minister Freeland replied: “Our government does agree, that seniors have been so hard hit by the pandemic. And, that seniors who qualify for GIS are among the most vulnerable people in Canada and we have to support them.”
This is going to be fixed, says Freeland:
“That’s why I’m really glad that in this update, I was able to confirm that we will compensate those seniors who have had their GIS clawed back because they received the CERB,” said Finance Minister Freeland.
“I want to reassure all of those seniors,” she said, regarding that the GIS clawback “is going to be fixed and they will be compensated for that clawback”.
“We’re going to ensure that the compensation meets the amount of clawback for all the seniors who were affected by this,” said Freeland. That sounds like full repayment of amounts not received since August 2021. If so, that is very welcome news for the impacted seniors.
In the Economic and Fiscal Update 2021 document, these details are itemized (on page 10): Approximately 183,000 recipients of the one-time payment would be GIS Recipients age 65+, with about 21,000 Allowance recipient age 60-64. About 54 percent (110,000) of the recipients would be men, and about 46 percent (94,000) women. “The distributional impact would be strongly progressive, given the targeting of GIS and Allowance benefits to lower-income individuals.”
All of this depends on passing of Bill C-2 in the House of Commons. Ideally that legislation passage would happen this week, before MPs break for the winter holiday season (December 18 through January 30).
Cost of GIS loss for seniors:
Many seniors will have had to borrow (including incurring interest payments) in order to compensate for the sudden and unexpected loss of income by losing GIS payments starting in August this year. Some have had to rely on foodbanks (when normally they’d not have to).
Even full repayment of the missed GIS payments won’t fully compensate for interest paid on loans or for sourcing needed funds from credit cards. But, even if it comes to that, it’s perhaps a price to pay for all of this being caused by a pandemic in the first place. Everyone has paid in some way or another, in ways that can never be compensated (the worst of which is of course losing loved ones to the COVID-19 disease itself).
Other less quantifiable impacts of the loss of GIS are also significant, such as: reducing or going without medications due to insufficient funds, missing out on appointments or activities for not being able to afford transportation, and possibly even having lost the roof over their heads because they couldn’t keep up with the rent.
Seniors still working:
Many seniors over the age of 65 years are still working (as employees or self-employed), to supplement their income.
The GIS supplement helps cover their cost of living.
While the contribution of seniors is valuable to workplaces and communities (through their experience and opportunity to mentor), working at ages past 65 is not easy. In most cases, these older citizens keep working because of financial need (including that any available pensions, including their eligible amount under the Canada Pension Plan, are insufficient).
NDP pushing for full clawback:
The NDP under Jagmeet Singh’s leadership have been pushing for full reversal of the GIS clawback since seniors across the country first started making their concerns known back in August. According to the NDP this week, the federal government knew about this problem as early as May of this year.
The Liberals will evidently want to ‘save face’ in the GIS clawback situation. If they give the full amount back to all impacted seniors that could be seen as negating their statement from day one that CERB (and later CRB) would be taxable income.
But if they leave seniors in the lurch, that’s also bad for the Trudeau government brand. If in fact the full amount of the GIS clawback gets repaid to impacted seniors (as indicated by Minister Freeland today), it appears they have chosen the latter tack.
Prime Minister Justin Trudeau has repeatedly said in the past few weeks that seniors will always have his government’s back.
Passing Bill C-2:
The passage of Bill C-2 (pandemic economic recovery) in the House of Commons requires the support of at least one other party, so that the Liberals with 159 seats have an additional 11 votes (170 votes required to pass legislation).
Both the NDP (with 25 seats) and the Bloc (with 32 seats) have said they wanted to see a reversal of the clawback of the GIS (as well as the Child Benefit that low-income families receive).
It’s now ‘wait and see’ as to whether the now-promised ‘one time payment’ to seniors who have lost their GIS this year will be enough political capital to dissolve the GIS-clawback dealbreaker that was confirmed yesterday by NDP Seniors Critic Rachel Blaney yesterday. It would appear so, which also provides a powerful example of how a minority parliament works in favour of Canadians.
Especially with this news coming ahead of Christmas, it’s a beautiful example of Canada’s government doing the right thing (after a lot of hard work by advocates and the NDP). Fingers crossed.
NDP comment today:
As soon as the Economic and Fiscal Update was released at 1 pm, the NDP released a statement saying they didn’t feel the tone and direction of the Liberal government had changed.
There was no specific comment in today’s NDP release about the GIS or Canada Child Benefit clawbacks, though Blaikie’s comments in the House today were crystal clear — i.e. full repayment is expected, to which Minister Freeland replied to evidently indicate that full compensation will indeed be paid.
NDP Leader Jagmeet Singh will be address media tomorrow, December 15, after his party’s regular weekly caucus meeting (held on Wednesday mornings).
===== LINKS:
Address by Deputy Prime Minister and Minister of Finance Chrystia Freeland on the Economic and Fiscal Update (December 14, 2021) | Video link of Minister Freeland’s speech on YouTube
Government of Canada Releases Economic and Fiscal Update 2021 (December 14, 2021) with links to all related documents.
==== RELATED:
NDP: GIS clawback must end before Xmas (December 13, 2021). This article includes all related articles since August 2021 by Island Social Trends.
