Liberals offer up to $742 million to low income seniors whose GIS was clawed back this year

Pressed by its critics to help vulnerable seniors whose Guaranteed Income Supplement payments were cut after they accepted pandemic supports, the federal government is offering cash payments to blunt the effect of the clawback.

"We will compensate those seniors who have had their GIS clawed back because they received the CERB [Canada Emergency Response Benefit]," Deputy Prime Minister and Finance Minister Chrystia Freeland said in the House of Commons Tuesday.

"The most important thing I want to do today is to reassure all of those seniors, who I'm sure, are really worried about paying their bills, that that is going to be fixed and they will be compensated for that clawback."

The NDP and Bloc Québécois, along with anti-poverty advocates, have been pressuring the federal government for months to address the issue.

In its 2021 Economic and Fiscal Update, tabled in the House of Commons today, the government earmarks $742.4 million in 2022-23 for the 183,000 seniors 65 and older who were impacted by the GIS clawback and 21,000 seniors aged 60 to 64 who were impacted by the Allowance clawback. 

GIS is a program meant 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, while 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 was $948.82.

The CERB and the Canada Recovery Benefit (CRB) are both considered taxable income. A large number of seniors who took these benefits did so to supplement their GIS payments when they were no longer able to work part time to top up their income.

By taking pandemic benefits like the CERB — which provided $2,000 a month to claimants — many of these seniors skewed their income for the last fiscal year, which is used to calculate GIS payments.

Seniors told CBC last month that the way the CERB is structured forced them to claim the full monthly benefit, rather than taking only what they needed to replace part-time income.

'A perpetual struggle'

For many seniors, claiming a pandemic benefit pushed their income for the last fiscal year to a level high enough to trigger a cut to GIS this year. Some seniors saw this year's GIS eliminated completely, leaving them struggling to pay rent and bills.

Janet McLeod, who received about $300 a month through the GIS program, said she was told in July that because she had accepted several CERB payments, all her GIS payments for this year would be cancelled.

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

McLeod said she welcomed news of the one-time payments but expressed concern about the timing.

"This is, indeed, some good news, though when we will receive it is not known," she said. "And prices along with COVID cases have been rising rapidly since we were cut off last July, and it's now December, nearly Christmas."

In September, the Office of the Parliamentary Budget Officer told the NDP that taking the CERB and the CRB out of the equation used to calculate GIS — effectively offering a blanket CERB amnesty to low-income seniors — would cost the government $380 million this year and $58 million next year, and would affect about 90,000 seniors.

The Liberal government says it will provide almost twice that amount in relief payments and that the money will go to about 183,000 seniors aged 65 and older and another 21,000 seniors aged 60 to 64.

NDP MP Daniel Blaikie, who has been calling on the Liberal government to address the GIS clawback, said he had concerns about the lack of details about how the program will work. 

"We're concerned about the effectiveness, not the dollar amount," he said. "When is the money going to come, what are the conditions under which it is going to be paid out? … There's not enough detail today to know if what the government is proposing is actually going to fix the problem."

Relief for students

The Liberal government said that it also would "continue to investigate ways to limit potential benefit reductions for vulnerable seniors who received emergency and recovery benefits."

The federal government is also proposing to help some students who received the CERB even though they were not eligible, and may now find themselves facing "significant repayments."

The debt relief program for students in this situation is estimated to cost the government $69.7 million.

Students who improperly claimed the CERB instead of the Canada Emergency Student Benefit (CESB) will be allowed to offset their CERB debt by applying it against what they would have received in student benefits over the same time period.

Students who got the CESB received $1,250 for a four-week period, for a maximum of 16 weeks, between May 10 and August 29, 2020. Students with disabilities or dependants also got an extra $750 — for a total benefit of $2,000 — for each four-week period.

The relief program will help cut debt for students only by subtracting the amount they qualified for under the student benefit from what they received through CERB.