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Reasons and decision
Persons in attendance
J. H., Appellant
Introduction
[1] The Appellant applied for the Guaranteed Income Supplement (GIS) benefit on September 5, 2013. In accordance with the legislation, the Appellant also provided a Statement of Estimated Income form which accompanied the GIS application. This form set out his 2012 income for purpose of determining the GIS eligibility for the 2013-2014 year. The application was denied on the basis of income in excess of the maximum allowed for qualification of the GIS payment.
[2] The position of the Respondent is that the evidence indicates that the Appellant’s GIS application must be denied because of a Capital Gains amount reported in 2012 (from the sale of a parcel of land) resulted in the combined income of the Appellant and his spouse being in excess of the maximum amount of income permitting a GIS entitlement. The maximum is set out in the legislation (Old Age Security Act (OASA)).
[3] The Respondent denied the application initially and upon reconsideration. One of the issues of concern for the Tribunal was that the reported income of the Appellant consisted of a capital gain for the tax year 2012. A ground of appeal related to this income. The matter was referred to the Tax Court of Canada with the Appellant as notional Appellant. In that action, pursuant to Section 38 of the Old Age Security Regulations (OASR), the judgment of the court was to dismiss the appeal thus confirming the income reported. This income being the basis for the calculation of the GIS.
[4] The hearing of this appeal was by teleconference for the following reasons:
- The method of proceeding provides for the accommodations required by the parties or participants.
- The issues under appeal are not complex.
- There are gaps in the information in the file and/or a need for clarification.
- Credibility is not a prevailing issue.
- This method of proceeding respects the requirement under the Social Security Tribunal Regulations to proceed as informally and quickly as circumstances, fairness and natural justice permit.
Evidence
Written evidence provided by the appellant
[5] On October 3, 2013, the Appellant wrote to request a reconsideration of his application for the GIS. He stated that the reason he was denied the supplement is because of his 2012 income which, when combined with his spouse's income, was $287,721.00. He specifically states that he does not dispute this level of income for this year.
[6] However, he states that the only reason that his income was so high was because he sold a parcel of land, which resulted in a capital gain, split between his spouse and himself. His main source of income had been and is today, his Canada Pension and Old Age Security, as well as the supplement.
[7] He did run a taxi business, but closed that business effective June 30th, 2013. He notes that without that additional income, his income, combined with his spouse's, is considerably lower. The Appellant applied for the GIS benefit for the 2013-2014 year. In 2012, he had larger income because of the sale of land. He requests that part of the capital gain be repaid.
[8] He submitted his 2012 Canada Revenue Agency (CRA) assessment indicating total income for the year of $ 154,997 with net income being $ 145,533. CRA advised that OAS payments between July 2013 and June 2014 would be withheld because of his level of income for the 2012 year.
[9] On his application for the GIS Supplement dated September 5, 2013 and signed by the Appellant and his spouse, he indicates the gross income for 2012 of $145,534.
Testimony of the appellant
[10] The Appellant testified to the events leading up to the hearing. The Tribunal finds the following facts:
- The Appellant is now 81 years of age.
- The Appellant indicated he retired from employment at age 77 in 2013. The gross income from all sources now for him and his wife is $31,689.48.
- His son is a diabetic for whom he provides income, “to keep him going”.
Evidence submitted by the respondent
[11] The Appellant and his wife both submitted applications for the GIS for the 2013-2014 payment year on September 5, 2013.
[12] Their income for 2012 was excess as it included capital gains amounts from the sale of a parcel of land. A denial letter was sent advising them that they did not meet the eligibility requirements of the OASA.
[13] A letter requesting reconsideration of the decision was received from the Appellant on October 2, 2013. On October 23, 2013 a letter was sent to the Appellant acknowledging that the reconsideration was reviewed and the original decision was maintained. The matter was appealed to the Social Security Tribunal (SST) General Division by letter dated December 5, 2013.
Issue
[14] The issues before the Tribunal in this appeal is whether or not the appellant is entitled to the GIS benefit for the 2013-2014 payment year.
The law
[15] The relevant law is found in sections of the Old Age Security Act (OAS Act).
Old Age Security Act: Part 11 – Monthly Guaranteed Income Supplement
Definitions: In this Act:
[16] Section 10. The definitions in this section apply in this Part.
"base calendar year''
"base calendar year" means the last calendar year ending before the current payment period.
"current payment period"
"current payment period" means the payment period in respect of which an application for a supplement is made by an applicant.
"previous payment period"
"previous payment period" means the payment period immediately before the current payment period.
Supplement Payable
[17] Section 11. (1) Subject to this Part and the regulations, for each month in any payment period, a monthly guaranteed income supplement may be paid to a pensioner.
Calculation of Income
[18] Section 12 ( 5) of the OAS Act provides:
Guaranteed minimum income for pensioners
(5) Despite subsection (2), the amount of the supplement that may be paid to a pensioner for any month after December 1997 is the amount determined by the formula
[(A – B) x C] - D/2
where
- A is the aggregate of
- (a) the maximum amount of the supplement that, but for this subsection, might have been paid to the pensioner for that month, and
- (b) the amount of the full monthly pension;
- B is the pensioner's monthly pension;
- C is the pensioner's special qualifying factor for the month; and
- D is the pensioner's monthly base income rounded, where it is not a multiple of two dollars, to the next lower multiple of two dollars.
Old Age Security –Regulations (OASR)
[19] Section 38 of the Old Age Security Regulations allows for a reference to the Tax Court of Canada with the Appellant as notional Appellant in that action pursuant to Section 28(2) of the OASA on matters related to the confirmation of income of an Appellant
Submissions
[20] The Appellant submitted that in 2013 he was living with only CPP income for himself and his wife for a total of$1,024.80 per month. This has changed for subsequent tax years. He argues that the Federal government should not be able to take away, at any time, the OAS to which they have paid into their whole lives; be they rich or poor: “To me, and many more, this is criminal!”
[21] The Respondent argues that the capital gains amount reported on the Appellant’s GIS application as taken from the CRA income tax for 2012 need to be included when determining his entitlement for the 2013-2014 payment year.
[22] The total combined income of the Appellant and his spouse must be less than the maximum income allowed for 2012, which was $ 22,032.00. The maximum income allowed is based on the cost of living and on marital status. The information on the evidence shows that the total of his and his spouse's combined income for 2012 was $ 287, 721.00 including a capital gain. Therefore, he does not qualify for this benefit.
[23] The OASA states under Section 13 (Calculation of Income) that for the purposes of determining the amount of supplement that may be paid to a pensioner for a month before July 1, 1999, the income for a calendar year of a person or an applicant is the income of that person or applicant for that year computed in accordance with the Income Tax Act. Income under the OASA is calculated in accordance with the Canadian Income Tax Act. The CRA assesses income on an annual basis from the filing of the Income Tax and Benefit returns. The income used to assess income-tested benefits is from the previous calendar year and the benefit paid on that amount for the next payment period which runs from July 1 to June 30 of the following year. Income from Capital Gains has to be included when calculating the entitlement to the GIS. Based on this, the Appellant's capital gains should be included in his income for 2012. The denial of the GIS is based on the combined income of the Appellant and his spouse.
Analysis
[24] The Appellant must prove on a balance of probabilities that he was entitled to a higher GIS payment for the period of July 2013 to June 2014. He was unable to do this.
[25] Income under the OASA is calculated in accordance with the Canadian Income Tax Act. The CRA assesses income on an annual basis from the filing of the Income Tax returns. The income used to assess income-tested benefits is from the previous calendar year and the benefit is paid on that amount for the next payment period which runs from July 1 to June 30 of the following year. Income from Capital Gains, and all other sources, has to be included when calculating the entitlement to the GIS.
[26] In order to be eligible for the GIS for the 2013-2014 payment year, his 2012 income needed to be below the maximum allowed ($ 22,032.00). CRA records indicate that his 2012 income was well in excess of the benchmark calculated according to the formula in the legislation. The support for this finding is seen in the GIS Rate Table #1 which covers “marital” status amounts. If a pensioner's income is at this amount or higher, he is not eligible for the GIS. The Appellant has not explained or offered any facts or law that suggests that the calculations tendered by the Respondent are incorrect. The strict reading of Section 12(5) of the OASA must be applied.
[27] This income for 2012 is self-evidently too high to qualify for the GIS. This finding was settled by the reference to the Tax Court of Canada where by virtue of the dismissal of the appeal, his income was confirmed.
[28] This Tribunal cannot change the law related to GIS payments, has no authority in matters related to the criminal law of Canada, nor does it have the jurisdiction to modify the Income Tax Act so as to repay any portion of tax paid on a capital gain.
Conclusion
[29] In order to be eligible for GIS for the 2013-2014 payment year the 2012 income of the Appellant and his spouse needed to be below the maximum allowed which was $ 22,032.00. The evidence clearly demonstrates that the 2012 income was too high to qualify for GIS
[30] The appeal is dismissed.