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GIS Saga
 - how 300,000 lost out on GIS and then some/most got their benefits

It started with my Community Undertaking Social Policy (CUSP) project at St. Christopher House in Toronto: The Report on the CUSP Project at St. Christopher House

During that project we learned that roughly 300,000 low-income seniors were missing out on $500 million per year in benefits they were entitled to because they hadn’t applied. I talked about it in speeches and reports. We couldn’t get anyone to really care.

Then in the summer, Sue Cox at the Daily Bread Food Bank wanted to tell people about the ‘missing’ GIS recipients and the increased number seniors at food banks during her press conference. She mentioned it … and the Toronto Star cared. – Front page, headline – above the fold: Toronto Star Story.

Which led to an interview on ‘As It Happens’ and more articles in the Star and in the Ottawa Citizen: …Ottawa Citizen Story and an editorial in the Ottawa Citizen:Ottawa Citizen Editorial

So then the House of Commons HRDC Committee got involved…

They held two days of hearings. One for regular folk, like me: Testimony before House HRDC Committee - Regular Folk and one for officials: Testimony before House HRDC Committee - Officials

Then they wrote a report that says HRDC could have done better: House HRDC Committee Report on GIS Take-up

Macleans magazine decided that the CUSP project was worth talking about: : Macleans Article on the CUSP Project

So thanks to all this HRDC through CCRA (Revenue Canada) is now actively contacting seniors, who based on the income tax return, appear to be eligible for GIS.

And you can monitor how this issue of GIS and retroactivity is discussed in the House of Commons below: Excerpts from Hansard

As of June 2002, HRDC is doing a great job of reaching out to seniors to tell them about the GIS. Actually, they're doing a much better job than I ever would have expected.

Finally, HRDC submitted a report to the House of Commons in response to the suggestions from the report of the HRDC Committee. HRDC, needn't pay more than 11 months of retroactive payments they say because: "11 months is what we've always used; that's what we used for all our programs." (I'm paraphrasing). The HRDC report explains why this would be a 'major departure from the retroactivity provisions of other provincial and federal income support programs." HRDC Response to the Committee Report

The status quo leaves an unfortunate situation in place. When citizens don't get the benefits they're entitled to, government wins (it reduces government spending). I was hoping that a greater retroactive period would create an financial incentive for government to ensure that citizens got the benefits they are entitled to.


Retroactivity

So what of Retroactivity for GIS?

HRDC gives essentially three reasons defending the 'status quo':

(1) retroactivity is 11 months because GIS is income-tested-'intended to meet immediate needs'

  • this argument is not without merit but still fails. HRDC should bear the 'cost' of wilfully not telling individual seniors of the benefits they were entitled to.

  • Its interesting though that believe that retroactivity is affected by the program being income-tested.

    (2) it's consistent with other seniors' support programs.

  • well consistency has its appeal... but OAS had a retroactive period of 5 years until recently. Also, should the retroactivity periods for OAS, GIS and CPP be the same?
  • After all, OAS isn't really income-tested (except for the high-income clawback) - it's not designed to meet immediate need. So if 11 months makes sense because GIS is income-tested then I assume a different amount of retroactivity would make sense when the program isn't income-tested.
  • CPP, on the other hand is funded by contributions - its not even HRDC's money. Why would this not affect the retroactive period? After all, with CPP arguably HRDC has a fiduciary responsibility which would not apply in the same way to GIS. Should this not affect the retroactive period?

    (3) if they paid retroactive benefits then we would need to recalculate any other benefits that said citizen received (which would have been too high).

  • Funny, that this argument didn't prevent the federal government from making retroactive pay-equity payments to thousands of civil servants. Ditto, when we make 'catch-up' payments to MP's. This is just a trumped-up excuse to justify doing nothing.

    There was another short spat of media coverage (July 2002) when it became known that some citizen's were getting more than 11 months of retroactivity. Based on information made available to a reporter for the National Post It would appear that one late GIS applicant got a $20,000 check hand-delivered to her home when her son threatened to take HRDC to court. They then got a letter from HRDC explaining that they could go back more than 11 months because "they made an administrative error in not notifying the women of the GIS she was entitled to." National Post Article July 8 2002.

    On the surface, it appears that this women received benefits which are being denied to many thousand others who are in the same circumstance.

    This prompted the following Op-Ed in the Ottawa Citizen by Martin Loney (a good friend of mine). Martin Loney's Op-Ed in the Ottawa Citizen

    The same 11 month retroactivity period currently applies for OAS, GIS and CPP/QPP - consistency, right?

    The special case of CPP/QPP is worthy of comment. The 11 month peiod is used here despite the fact that people have contributed to the program and paid for their benfits - fiduciary responsibility.

    Stay tuned... But much remains to be done:

    • What of those who don’t file tax returns?
    • What about the some problem of those eligible for but not receiving the Old Age Security, Canada/Quebec Pension Plan, Child Tax Benefit, the GST Credit?
    • What about retroactive payments: for those who apply late - now they are limited to 11 months.
    • What about those seniors who save for retirement in an RRSP and are no better off for it (for more details see: The Dark-Side of Targeting
    • What of those low-income seniors who will receive their GIS, but lose it all to income tax, higher rent and higher charges for meals and wheels, home care, nursing home fees, prescription drug costs. That is, those seniors facing marginal tax rates of near 100%, 100% and over 100%.

    Richard Shillington
    July 21, 2002

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