Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.
November 3, 2000
XXXXXXXXXX
Dear XXXXXXXXXX:
The Honourable Martin Cauchon, Minister of National Revenue, has asked me to reply to your correspondence of September 25 and 26, 2000, concerning the Guaranteed Income Supplement (GIS) which is provided for under the Old Age Security (OAS) legislation.
An individual's entitlement to the GIS is generally based on the individual's income for the preceding calendar year. The optional income provisions of the OAS legislation can apply on ceasing employment, ceasing a business or reducing pension income. In these circumstances, if it is to the applicant's advantage, the income-tested benefits may be calculated based on estimated income for the current year instead of actual income for the preceding calendar year. The Old Age Security Act states that, for GIS purposes, the income of a person is computed in accordance with the Income Tax Act.
The Canada Customs and Revenue Agency (CCRA) has consistently stated that income assistance payments made to individuals previously employed with the fishing industry are taxable as other income, not pension income under the Income Tax Act. For purposes of the optional income provisions, the OAS regulations provide a separate definition of "pension income". The definition of "pension income" under the OAS regulations, however, does not include benefits which are taxable as "other income under the Income Tax Act. Accordingly, when the benefits under these programs cease or are reduced, this does not constitute an event that falls under the GIS optional income provisions and the assistance must be considered in establishing entitlement to the GIS. The result is that the GIS payments are reduced, generally until the next renewal period.
Human Resources Development Canada administers the GIS program according to the current legislation. I assure you that the Income Tax Act and the Old Age Security Act are being applied correctly in your husband's situation. Legislative changes would be required for relief to be provided, which is the responsibility of the Department of Finance. In this regard, I assure you that Finance officials are aware of the concerns expressed.
I regret that my reply cannot be more favourable.
Yours sincerely,
Bill McCloskey Assistant Commissioner Policy and Legislation Branch