Old Age Security (OAS) and Guaranteed Income Supplement (GIS)

Reasons and decision

Overview

[1] In a decision dated January 21, 2016, the General Division determined that the calculation of the Guaranteed Income Supplement for the Applicant from October 2010 to June 2011 was based on the aggregate or combined incomes of the Applicant and the Added Party, for the base calendar year of 2009. At the time, the Added Party was not a resident of Canada and derived his income solely from foreign sources. The Applicant and the Added Party were not cohabiting until after they married in September 2010. The Added Party moved to Canada at the end of October 2010 and obtained permanent resident status in 2012.

[2] At its core, this case is about the following, whether:

1. for the period from October 2010 to June 2011, the amount of the supplement is based on the combined 2009 incomes of the Applicant and the Added Party, when the Added Party was a non-resident of Canada who was neither married to nor cohabited with the Applicant, and when his income was from only foreign sources;
2. for the period from July 2011 to June 2012, the supplement is based on the party’s combined 2010 income, when the Added Party was a non-resident of Canada who was neither married to nor cohabited with the Applicant until September 2010, and when his income for 2010 was from only foreign sources and was earned before he became a resident of Canada.

[3] The Applicant seeks leave to appeal from the decision of the General Division.

Issue

[4] Does the appeal have a reasonable chance of success?

Analysis

[5] Subsection 58(1) of the Department of Employment and Social Development Act (DESDA) sets out the grounds of appeal as being limited to the following:

1. (a) the General Division failed to observe a principle of natural justice or otherwise acted beyond or refused to exercise its jurisdiction;
2. (b) the General Division erred in law in making its decision, whether or not the error appears on the face of the record; or
3. (c) the General Division based its decision on an erroneous finding of fact that it made in a perverse or capricious manner or without regard for the material before it.

[6] Before granting leave, I need to be satisfied that the reasons for appeal fall within the enumerated grounds of appeal under subsection 58(1) of the DESDA and that the appeal has a reasonable chance of success. The Federal Court endorsed this approach in Tracey v. Canada (Attorney General), 2015 FC 1300.

[7] The Applicant submits that the General Division erred in law and based its decision on an erroneous finding of fact that it made in a perverse or capricious manner or without regard for the material before it. The Applicant argues that the General Division erred as it failed to consider the definition of income under the Old Age Security Act (OAS Act). Section 2 of the OAS Act defines income of a person for a calendar year as meaning the person’s income for the year, computed in accordance with the Income Tax Act (ITA). Section 3 of the ITA in turn sets out the computation of income of a taxpayer for a taxation year.

[8] The Applicant argues that had the General Division considered the definition of income, it would have recognized that the non-resident Added Party’s income for the years 2009 and for much of 2010 was derived solely from foreign sources. The Applicant argues that the General Division also failed to recognize the fact that the Added Party had earned income prior to the date on which he became a resident of Canada for income tax purposes. (After he became resident in 2010, he had neither any Canadian-source or foreign-source income for the balance of that year.) In relying upon Oceanspan Carriers v. R., [1987] 1 CTC 210 (FCA), the Applicant contends that as the Added Party was not a “taxpayer” for Canadian federal income tax purposes, he could not have had any income for Canadian federal income tax purposes either. The Applicant argues, in other words, that the General Division erred in considering the Added Party’s income for the purposes of calculating the amount of an appellant’s monthly payable supplement. If the Added Party did not have income for the purposes of the ITA, any income otherwise should not have been considered income for the purposes of the OAS Act.

[9] In this regard, I note the provisions of subsection 28(2) of the OAS Act, which stipulates:

Reference as to income

(2) If, on an appeal to the Social Security Tribunal, it is a ground of the appeal that the decision made by the Minister as to the income or income from a particular source or sources of an applicant or beneficiary or of the spouse or common-law partner of the applicant or beneficiary was incorrectly made, the appeal on that ground must, in accordance with the regulations, be referred for decision to the Tax Court of Canada, whose decision, subject only to variation by that Court in accordance with any decision on an appeal under the Tax Court of Canada Act relevant to the appeal to the Social Security Tribunal, is final and binding for all purposes of the appeal to the Social Security Tribunal except in accordance with the Federal Courts Act. (My emphasis)

[10] I note that in the proceedings before the General Division, the Respondent was of the position that the ground of appeal related to the income of an appellant and that the matter therefore fell within the jurisdiction of the Tax Court of Canada in accordance with subsection 28(2) of the OAS Act. The General Division, however, determined that the subsection was not applicable, as it found that the Applicant was appealing the decision to use the aggregate income of both spouses prior to the marriage to calculate the amount of the supplement, rather than appealing the decision “as to the income or income from a particular source or sources of an applicant or beneficiary or of the spouse or common-law partner of the applicant or beneficiary”.

[11] In spite of the General Division’s characterization of the nature of the appeal, it is arguable whether it should have considered if the issue of the Added Party’s income was properly a matter within the jurisdiction of the Tax Court of Canada to determine, particularly as the Added Party was a non-resident of Canada who was neither married to nor cohabited with the Applicant, and when he derived his income from only foreign sources in 2009 and 2010. In other words, it is arguable as to whether the General Division should have considered the appropriate provisions of the OAS Act and the ITA which define or compute “income”. I am satisfied that the appeal has a reasonable chance of success on the basis of a possible error of jurisdiction.

Conclusion

[12] The application for leave to appeal is allowed.

[13] This decision granting leave to appeal does not, in any way, prejudge the result of the appeal on the merits of the case.