Almost 90,000 seniors facing guaranteed income supplement cut for accepting pandemic benefits

Almost 90,000 Canadian seniors are being hit by a sudden cut to their monthly income because they accepted a federal financial benefit that was supposed to help them weather the pandemic.

Low income seniors who received the Canada emergency response benefit (CERB) are seeing their guaranteed income supplement (GIS) payments clawed back as a result.

GIS is intended to help low income seniors make ends meet. The payments are based on income. A single senior earning less than $19,248 qualifies for GIS. The cutoff for couples can be as high as $46,128, depending on their pension situation.

In 2021, the maximum monthly payment under the program is $948.82. 

Janet McLeod, who turns 79 next month, is one of many low income seniors who work part time to support themselves while receiving GIS.

'A perpetual struggle'

McLeod, who previously received about $300 a month through the program, said she was told in July that because she accepted several payments of the $2,000 monthly CERB — which is taxable income — all her GIS payments for this year would be cancelled.

"I am in a perpetual struggle," she said. "So to be cut back $300 a month is very difficult, paying rent and taking care of my other expenses, which are very modest."

The Canada recovery benefit (CRB), which McLeod did not collect, is also counted as income when applying for the GIS.

McLeod has a small business helping students get post-secondary placements. She said that before the pandemic, almost all of her business was conducted face to face; COVID-19 left her without an adequate income, so she applied for the CERB.

Asking for special consideration

By the fall of 2020, she said, she had adapted her business model to remote work and stopped collecting CERB payments. 

"When I did my taxes in April of 2021 for the year of 2020, GIS came back to me in early July and told me, 'You earn too much, you don't qualify for GIS,'" she said.

"Those of us who are getting GIS are on the low end of earned income. Seniors can't project that they are going to make a lot of money, but they still want to make a contribution and work as long as we can. You're cutting back on us, those who are least able to afford it."

Scott Bardsley, spokesperson for Minister of Seniors Kamal Khera, said that "because GIS benefits are generally reduced by $1 for every $2 of net income, affected seniors would have received more in CERB or CRB than they lost in GIS."

Bardsley said that McLeod and others like her can ask the federal government to consider their case by estimating what they'll earn this year and using that figure to calculate GIS.

Such requests, Bardsley said, are handled on a case-by-case basis and are approved "in limited circumstances." 

McLeod said she got the same advice from the government. She said that because her business is a small, one-person operation, her income fluctuates on a monthly basis and she has very little idea of what she will earn this year. 

Leila Sarangi, national director of the anti-poverty coalition Campaign 2000, said her office has been hearing from seniors across the country who are in McLeod's situation.

"We are talking about the lowest income earners who don't have savings, who don't have that resilience, who don't have that padding," she said. "That's why they're still working as seniors."

According to the Office of the Parliamentary Budget Officer (PBO), 88,222 low-income seniors will see GIS reductions because of pandemic benefits.

Fix the problem, say opposition parties

In September, the PBO told the NDP that taking the CERB and the CRB out of the equation used to calculate GIS would cost the government $380 million this year and $58 million next year.

New Democrats and Canada 2000 want the government to stop including CRB and CERB in the GIS income calculation. NDP MP Daniel Blaikie said that while that change would be costly, it's already built into the budget because GIS costs are relatively stable from year to year.

He said that the federal government should not be trying to cover the cost of emergency benefits through cuts to payments for low-income seniors.

"If those benefits get taken away, they just don't receive enough every month to make rent," Blakie said. "Having them on the street is not good for them. It's not good for their neighbours, it's not good for their communities.

"Homelessness is a real problem. We don't need to contribute to that by taking away a benefit that was already going out to our poorest seniors before the pandemic."

In August, the Conservatives wrote to Khera's predecessor, Deb Schulte, to press for action on the issue. A spokesperson for the Conservative Party told CBC news that Conservatives want the problem "rectified" but offered no specific remedies.