What would have an honest news release looked like – announcing the CERB/CRB GIS clawback?

It’s interesting to do a ‘thought experiment’ where – instead of the GIS clawback being an unintended consequence of policy (which it was and is) – to think for a moment what it would mean if the GIS clawback of pandemic was purposeful – i.e., they meant to do it. Mad Magazine at one time had an ongoing series of send-ups on things ‘we would like to see’. An honest News Release on the GIS clawback related to the CERB/CRB might have looked like this:

April 1, 2020 – ESDC – News Release (Check against delivery)

The Government of Canada is planning to distribute new taxable pandemic benefits that will be delivered to all senior citizens who work and who realized at least $5,000 in earnings last year. These new benefits are designed to help eligible recipients to stay safe during the pandemic.

This benefit will be paid (up to $12,000) to eligible seniors through the new CERB/CRB. However, as part of this plan, we will restrict payments to a maximum of half that amount ($6,000) to low-income seniors who receive the federal GIS. A feature of this new policy is to ensure that those seniors with the lowest pensions and income such as earnings and Honourariums, will experience the highest reductions in their GIS.

This new policy is in keeping with existing Finance and CRA policies governing taxable non-pandemic income.

88,000 GIS recipients will experience a clawback of $4,977 on average through reductions in their GIS. 

As part of the rollout of these changes, we do not plan any further announcements or communications to affected low-income seniors. They will first hear about reduced GIS  16 months from now in July 2021 and one year later in July 2022 when their annual GIS statements are issued. Accordingly, affected seniors should access information as soon as possible as to how pandemic benefits could affect income security programs like the GIS and other refundable credits.

In addition, the Government of Canada, through rules affecting Rent geared to income housing, will work in concert with provinces and territories to ensure that rental charges in seniors’ housing are raised by up to 30% per month immediately following the month in which pandemic benefits from the CERB/CRB are first received. Affected seniors can apply for rent reductions in the following year when their GIS is reduced. Seniors facing eviction in the interim should consult available local shelter and homelessness resources.

Note that only very low-income seniors who work are affected by these policy changes and the highest reductions will affect Canada’s poorest seniors.

It is estimated that the 88,000 seniors affected comprise just under 1% of Canada’s almost 9 million seniors.

Seniors Minister Khera commented recently: 

“Every year thousands of seniors’ GIS is adjusted to reflect changes in their net income so that it targets those who need it most … We appreciate that the adjustment has been difficult for some seniors. We continue to look at how to support those trying to make ends meet.