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Seniors cut off from income supplement after receiving emergency benefits

Chris Sherlock, a 65-year-old resident of British Columbia's Cowichan Valley, is seen in an undated handout photo. Sherlock, who relied on the CERB last year, says he was never told his monthly income would drop by nearly $500 as a consequence. New Democrats say they've have been flooded with calls from seniors who suddenly find themselves cut off from monthly government payments due to emergency benefits they received last year.
Image Credit: THE CANADIAN PRESS/HO-Chris Sherlock

OTTAWA - Chris Sherlock is facing possible eviction because of unanticipated clawbacks to the guaranteed income supplement for seniors.

The 65-year-old resident of British Columbia's Cowichan Valley drew on emergency benefits last year after the COVID-19 pandemic wiped out his part-time work as a musician.

Now the $2,000 a month in Canada Emergency Response Benefit he received through much of 2020 has rendered him ineligible for the income supplement typically available to low-income seniors.

"This comes as a complete shock to me," said Sherlock, who worked on contract as a tree planter for two decades and has no company pension.

"No one ... warned me that I would be losing my guaranteed income supplement because of this. There was nothing about having your pension cut in half for the next two years."

Sherlock is not the only one blindsided.

New Democrats say they've have been flooded with calls from Canadians aged 65 and up who suddenly find themselves cut off from monthly government payments due to the pandemic benefits they relied on last year.

In a letter sent to three Liberal cabinet ministers, NDP MP Daniel Blaikie said many seniors who received the CERB and Canada Recovery Benefit either do not qualify for the guaranteed income supplement or face drastic deductions to it.

"They're just not going to have enough income at the end of the month in order to pay their bills. And what we feared would happen last year will end up happening this year," Blaikie said in an interview.

"It's not right of us to do this to Canada's poorest seniors."

Blaikie is calling for a "prompt solution" and hoping that the federal government will change its approach to slashing the guaranteed income supplement based on benefits.

"I don't think it's a good enough answer to say, 'Well, this is the way we normally do it, and so that's the way it's done,'" he added.

"We've been making all sorts of exceptions over the past year and a half in recognition of the fact that circumstances are not normal and people are struggling with unprecedented challenges."

Like employment insurance, the guaranteed income supplement (GIS) is income-tested. That means the previous year's taxable earnings — including emergency benefits — factor into how much gets doled out in the next payment period (recipients are notified of their entitlements each July).

"This may result in a loss of entitlement if the person’s income (or joint income, where applicable) exceeds the threshold at which GIS benefits are completely phased out," said Employment and Social Development Canada spokesman Samuelle Carbonneau in an email.

For single seniors, GIS benefits kick in if they make less than $18,984 annually, with a monthly maximum of $936.

Data on the total number of GIS recipients who had their payments reduced this year is not currently available, Carbonneau said.

Seniors continue to receive their full old age security and CPP pensions, which in Sherlock's case add up to $783 after the government knocked nearly $500 in GIS off his monthly income. The two pension streams are now his main source of financial support through June 2022, and do not cover his rent and utilities.

Sherlock said he put last year's emergency benefits toward dental work, car repairs and old bills, but he hadn't budgeted for a smaller income as a consequence of the CERB and its successor, the CRB (he stopped receiving the benefit a few months ago).

"I've got no money and I can't pay my rent," he said.

"It's sort of like if you saw a little old dog in the street, offered it a treat and then hit it on the head with a baseball bat for taking that treat."

Those a decade older than Sherlock have a slightly bigger cushion to fall back on.

Starting the week of Aug. 16, the government will provide a one-time payment of $500 to every senior who will be 75 and over by the summer of 2022.

And come next summer, the Liberals are also proposing a 10 per cent boost in old age security for those over 75, which the budget estimated would provide an extra $766 in benefits to 3.3 million retirees.

This report by The Canadian Press was first published Aug. 5, 2021.

News from © The Canadian Press, 2021
The Canadian Press

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