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Loss of GIS because of pandemic benefits is creating a ‘financial crisis’ for low-income seniors, NDP warns

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Seniors Minister Kamal Khera, right, is defending the current rules, saying GIS payments to seniors are always adjusted each year based on an individual’s income from the previous year.LARS HAGBERG/AFP/Getty Images

The NDP is urging the minority Liberal government to quickly address a “financial crisis” facing tens of thousands of low-income seniors who are being denied guaranteed income supplement payments because they received emergency COVID-19 benefits.

But new federal Seniors Minister Kamal Khera is defending the current rules, saying GIS payments to seniors are always adjusted each year based on an individual’s income from the previous year. The government says affected seniors are better off overall, because they would have initially received more in pandemic benefits than they would have lost in future reduced GIS.

Critics say the sequencing is creating hardship. Income from temporary benefits in the early stages of the pandemic has been spent in most cases and individuals are now facing a following year in which the pandemic programs have ended and their GIS payments have disappeared or are less than what they usually receive.

The GIS is a top up to Old Age Security payments that is aimed at low-income seniors. For instance, the GIS income cutoff for single seniors is $19,248. Higher thresholds apply for couples.

The Office of the Parliamentary Budget Officer, or PBO, told The Globe and Mail Wednesday that an estimated 88,222 low-income seniors will see GIS reductions because of pandemic benefits, and the average GIS loss is $4,971.

In a letter this week to Ms. Khera and other federal ministers, NDP MPs Daniel Blaikie and Rachel Blaney urged the government to remove income from pandemic programs from the calculation of who qualifies for the GIS.

“For months now, your government has ignored calls to address an intensifying financial crisis for many of Canada’s poorest seniors. … These seniors were not told that accepting emergency benefits would disentitle them to their regular income supports the following year,” the NDP MPs wrote, adding these seniors are also being denied some provincial benefits that are aimed at those who qualify for the GIS.

“The point of the emergency benefits was to prevent evictions and keep food on the table, not to merely delay homelessness and hunger,” the NDP MPs wrote, requesting a meeting with government ministers to discuss policy changes.

In an interview, Ms. Blaney said NDP constituency offices are hearing from seniors who are in tears because of eviction risks or who are unable to afford their medications. She said the situation primarily applies to seniors who qualified for pandemic benefits because they had lost part-time employment because of COVID-19.

“It’s heartbreaking,” she said. “The stress and the distress is most concerning to me. These are people who just feel like they have no way to survive with this.”

A spokesperson for Ms. Khera, who joined cabinet for the first time as Seniors Minister in last month’s shuffle, defended the status quo in a statement that did not indicate an openness to the NDP’s proposal. It did say that the government would consider “limited” requests on a case-by-case basis to calculate GIS benefits based on estimated income for the current calendar year, rather than actual income from the previous calendar year.

“Every year thousands of seniors have their GIS increased or decreased to reflect changes in their net income. This ensures the benefit targets the most vulnerable seniors,” said press secretary Daniel Pollak in an e-mailed statement. He noted that Employment Insurance also counts payments from pandemic programs such as the Canada Emergency Response Benefit and the Canada Recovery Benefit as taxable income in calculating benefit levels.

“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,” he said. “Seniors continue to receive their full OAS and CPP [Canada Pension Plan] pensions, which are not income-tested.”

The PBO published a cost estimate during this year’s election campaign of the NDP’s promise to exclude pandemic payments from the GIS income test. The PBO estimated that this would cost $439-million over two years.

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