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

Reasons and decision

Persons in attendance

The Appellant, J. P.

Overview

[1] The Appellant, a resident of the United States (US), applied for an Old Age Security (OAS) pension on September 6, 2013. On December 8, 2014 the Respondent denied the application on the basis that as a foreign applicant, she did not meet the minimum requirement of one year of actual Canadian residence after turning 18. The Appellant sought a reconsideration of this decision on December 19, 2014. She argued that the time she spent in the US studying in 1965 and 1966 should be deemed Canadian residence, and therefore she had at least one year of residence to qualify for an OAS pension. The Respondent reconsidered the matter and, on August 28, 2015, maintained its initial decision. The Appellant appealed this reconsideration decision to the Social Security Tribunal of Canada (the Tribunal) on September 23, 2015.

Form of hearing

[2] The Tribunal Member determined that the hearing of this appeal would be by teleconference for the following reasons:

• Videoconferencing is not available within a reasonable distance of the area where the Appellant lives.
• The issues under appeal are complex.
• There are gaps in the information in the file and a need for clarification.
• 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.

Procedural issues

a. Late documents

[3] On November 9, 2016 the Tribunal sent the parties a Notice of Hearing (Notice) setting out a filing deadline (December 21, 2016) and response deadline (January 22, 2017) for written arguments and documentation. The Notice also stated that such information filed after these deadlines would be shared with the parties but their admission into the hearing file would remain at the discretion of the assigned Tribunal Member (GD0).

[4] On February 14, 2017 the hearing was adjourned by the Tribunal due to a scheduling conflict. A new Notice of Hearing was sent to the parties on this day stating that the filing and response periods in the initial Notice remained the same, and that the appeal would be heard on May 2, 2017 (GD0A).

[5] On April 26, 2017 the Respondent filed detailed submissions with the Tribunal (GD4). These submissions were dated February 6, 2017. The Tribunal sent the submissions to the Appellant at her address in the United States on April 26, 2017, immediately after they were received.

[6] At the outset of the hearing on May 2, 2017, the Appellant confirmed that she did not receive these late submissions (GD4). The Tribunal moved, with the Appellant’s consent, to adjourn the hearing to give her an opportunity to review and more fully understand the Respondent’s submission, and to allow the Respondent the opportunity to have its submission admitted and heard by the Tribunal.

[7] The hearing was rescheduled for July 2017 with a new filing period for any additional documents or submissions (GD0B and GD0C).

b. Lost telephone connection

[8] The telephone connection was lost part way through the closing argument portion of the hearing on July 11, 2017. The Tribunal issued a directive to the Appellant to file any further argument in writing by July 21, 2017. No further submissions were received.

The appeal

Law

Eligibility requirements under the Old Age Security Act

[9] Under domestic law, the most relevant legislative provisions of the OAS Act are as follows.

[10] Paragraph 3(2)(b) of the OAS Act pertains to the minimum residence period required for a foreign resident to qualify for an OAS pension abroad:

Payment of partial pension

(2) Subject to this Act and the regulations, a partial monthly pension may be paid for any month in a payment quarter to every person who is not eligible for a full monthly pension under subsection (1) and

(a) has attained sixty-five years of age; and

(b) has resided in Canada after attaining eighteen years of age and prior to the day on which that person’s application is approved for an aggregate period of at least ten years but less than forty years and, where that aggregate period is less than twenty years, was resident in Canada on the day preceding the day on which that person’s application is approved. [emphasis added here]

[11] Section 21 of the OAS Regulations distinguishes between being resident and present in Canada:

21. (1) For the purposes of the Act and these Regulations,

(a) a person resides in Canada if he makes his home and ordinarily lives in any part of Canada; and

(b) a person is present in Canada when he is physically present in any part of Canada.

[12] Subsection 21(4) of the OAS Regulations discusses when intervals of absence from Canada do not interrupt a person’s residence:

(4) Any interval of absence from Canada of a person resident in Canada that is

(a) of a temporary nature and does not exceed one year,

(b) for the purpose of attending a school or university, or

[…]

shall be deemed not to have interrupted that person’s residence or presence in Canada.

[13] Subsection 21(5.3) of the OAS Regulations reads:

(5.3) Where, by virtue of an agreement entered into under subsection 40(1) of the Act, a person is subject to the legislation of a country other than Canada, that person shall, for the purposes of the Act and these Regulations, be deemed not to be resident in Canada.

Eligibility requirements under the Canada-Unites States Agreement

[14] If an applicant does not qualify for an OAS pension based on domestic law alone, they may qualify under an international agreement. Section 40 of the OAS Act permits Canada to enter into reciprocal arrangements with other countries in regards to the administration of social security benefits.

[15] Canada and the United States entered into one such agreement on August 1, 1984, called the Agreement Between the Government of Canada and the Government of the United States of America with Respect to Social Security (the Canada-US Agreement or Agreement).

[16] Part II, Article V, paragraph (1) of the Agreement states:

ARTICLE V

(1) Except as otherwise provided in this Article, an employed person who works in the territory of one of the Contracting States shall, in respect of that work, be subject to the laws of only that Contracting State.

[17] Chapter 2, Article VIII of the Canada-US Agreement (Second Supplementary Agreement dated May 28, 1996) provides:

ARTICLE VIII

1.  
   1. If a person is not entitled to the payment of a benefit because he or she has not accumulated sufficient periods of residence under the Old Age Security Act, or periods of coverage under the Canada Pension Plan, the entitlement of that person to the payment of that benefit shall, subject to sub-paragraph (1)(b), be determined by totalizing these periods and those specified in paragraph (2), provided that the periods do not overlap.
   2. In the application of sub-paragraph (l)(a) of this Article to the Old Age Security Act:
      1. only periods of residence in Canada completed on or after January 1, 1952, including periods deemed as such under Article VI of this Agreement, shall be taken into account; and
      2. if the total duration of those periods of residence is less than one year and if, taking into account only those periods, no right to a benefit exists under that Act, the agency of Canada shall not be required to pay a benefit in respect of those periods by virtue of this Agreement.
2.  
   1. For purposes of determining entitlement to the payment of a benefit under the Old Age Security Act, a quarter of coverage credited under United States laws on or after January 1, 1952 and after the age at which periods of residence in Canada are credited for purposes of that Act shall be considered as three months of residence in the territory of Canada.
      [emphasis added here]

[18] Article IX, paragraph 1 of the Canada-US Agreement provides that when entitlement to an OAS pension is achieved only through the Canada-US Agreement, then payment is calculated in accordance with the provisions of the OAS Act regarding a partial OAS pension. The provision reads as follows:

ARTICLE IX

(1)  If a person is entitled to the payment of an Old Age Security pension or a spouse’s allowance solely through the application of the totalizing provisions of Article VIII, the agency of Canada shall calculate the amount of the pension or spouse’s allowance payable to that person in conformity with the provisions of the Old Age Security Act governing the payment of a partial pension or a spouse’s allowance, exclusively on the basis of the periods of residence in Canada on or after January 1, 1952 which may be considered under that Act or are deemed as such under Article VI of this Agreement.

[emphasis added here]

Issues

[19] The Tribunal must decide the following:

Whether the Appellant meets the residency requirements pursuant to subsection 3(2)(b) of the OAS Act and section 21 of the OAS Regulations?

[20] One period of contention is between the Appellant’s 18th and 19th birthdays (X X, X to X X, X). In particular, was this a temporary “interval of absence” of less than a year that is deemed Canadian residence under paragraph 21(4)(a) of the OAS Regulations? Or was this an interval of absence for the purpose of attending school or university that is deemed Canadian residence under paragraph 21(4)(b) of the OAS Regulations?

[21] The Tribunal must also consider:

What is the impact of subsection 21(5.3) of the OAS Regulations and the Canada-US Agreement on the Appellant’s eligibility for an OAS pension?

Submissions

[22] The Appellant submitted that her Canadian residence was not disrupted when she went to the United States to attend school in 1965. She argues that she had at least one year of actual Canadian residence to qualify for an OAS pension (GD2-10).

[23] During the hearing, the Appellant added that someone suggested she apply for an OAS pension because she is a Canadian citizen.

[24] The Respondent submitted that the Appellant does not meet the minimum residence requirement as a foreign applicant under the Canada-US Agreement. Therefore, she does not qualify for an OAS pension. The Respondent made the following particular submissions at page GD4-2 of the appeal file:

1. On the basis of [the Appellant’s] residence statement, the Minister determined that she resided in Canada for a period of 8 months and 2 days from her 18th birthday on X X, X to X X, X. Since the appellant’s period of residence in Canada after age 18 was less than the required 20 years and she had indicated in her application that she had lived and worked in the US, her application was reviewed under the terms of [the Canada-US Agreement].
2. The appellant’s US contribution record showed a total of 100 quarters of contributions. Since the first quarter of contribution in 1965 overlapped with a period of residence in Canada, only 99 quarters of contributions were valid to convert to years of residence in Canada. Ninety-nine quarters is the equivalent of 24 years and 9 month of residence. Even though the total of her periods of residence in Canada and her converted quarters of US contributions were sufficient to meet the 20 years requirement, the Agreement requires that the individual have at least one full year of residence in Canada for the totalizing provision to be applied.
3. Since the appellant only resided in Canada for 8 months and 2 days, the Agreement could not assist her to meet the 20 year residence requirement.

Evidence

[25] What follows is an overview of the most relevant evidence in determining the outcome of this appeal.

Testimony

[26] The Appellant said on her 18th birthday she lived at home on her parents’ farm near X. She was working at Eaton Company and taking correspondence courses for airline career training at X X in X X, Missouri. She could not clearly remember the name of the school until she located a photograph later during the hearing. The Appellant completed the correspondence course in April 1965. She then moved to X X to take the remaining 4 weeks of courses to complete the program. She did not complete these four weeks of study. After three weeks she left school and took a job at O’Hare International Airport in Chicago (O’Hare) around May 1, 1965. The first 90 days were considered probation. Once this probation was completed, X X awarded the Appellant her diploma.

[27] The Appellant no longer possessed her diploma or any correspondence from X X. All she had to confirm her attendance was a pin of a pair of wings she received from the school after obtaining her diploma. During the hearing she consulted her scrap book at home and found a photograph of her airline career training classmates from April 30, 1965.

[28] From August 1965 to end of November 1966 she continued to work at O’Hare. She rented an apartment with a couple other people. She married an American on December 1, 1966. They moved to X and lived in rental properties until they purchased and moved into a country home near X X, Illinois where they have lived since around 1976.

[29] The Appellant discussed returning to Canada in 1965 and 1966. She said she returned home for Christmas in 1965 for about 4 days. She also returned for a week during the summer of 1966.

[30] Over the years the Appellant and her husband have returned to Canada to visit her family on several occasions. She and her husband own no property in Canada. She has not paid income taxes or into the Canada Pension Plan in Canada. She opened a savings account in Canada around 2015. She could not recall the name of the bank, so took some time to search for a document to refresh her memory. Following this search, she confirmed to the Tribunal that her account was with the Bank of Montreal in X X, Alberta. She added the account has been hacked and is currently frozen. The account has had two deposits and several withdrawals when she was visiting Canada in the summer of 2016. She has had active bank accounts in the US since 1965. She could not recall any other formal ties to Canada since turning 18.

Documents

[31] Appellant’s birth certificate confirms she was born in Canada on X X, X (GD2-29).

[32] The Appellant’s OAS application indicates she resided in the US from April 3, 1965 to present (GD2-15).

[33] The Appellant’s US Social Security Certified Coverage Record indicates 100 quarters of coverage, 99 of which that do not overlap with her stated Canadian residence period. According to the Record, she began earning wages and contributing to the US Social Security system in the second quarter of 1965, or as of April 1965 (GD2-3 to 4).

[34] The Appellant’s US Permanent Resident (PR) Card states she was a US resident since April 3, 1965 (GD2-28).

[35] The Tribunal reviewed the Appellant’s letter confirming her period of studies in the US after departing Canada in 1965 (see GD2-10).

Analysis

[36] The burden of proof rests on the Appellant to establish entitlement to an OAS pension (De Carolis v. Canada (Attorney General), 2013 FC 366).

Does the Appellant have a full year of Canadian residence after turning 18? No

Residence uninterrupted during absence from April 3 to December 27, 1965

[37] There is no dispute that the Appellant has sufficient quarters of coverage under the Canada-US Agreement to meet the minimum of 20 years of creditable Canadian residence. However, in order for those residence credits to be counted, and in order to qualify for an OAS pension pursuant to paragraph 3(2)(b) of the OAS Act, she must also have at least one full year of actual Canadian residence after turning 18, in accordance with Article VIII, sub-paragraph 1(b)(ii) of the Agreement. Therefore the focus of the dispute in this appeal is whether the Appellant had one full year of actual Canadian residence after she turned 18 on X X, X.

[38] The Respondent submits that the actual period of Canadian residence was 8 months and 2 days from the Appellant’s 18th birthday on X X, X to X X, X. The Tribunal therefore does not consider this time period to be in dispute and focused the residence analysis on the following 4 months (less 2 days), to determine if the Appellant has one year of actual residence in Canada.

[39] Paragraph 21(4)(a) of the OAS Regulations provides that short absences of less than a year should not be deemed to interrupt a person’s residency. The provision is broadly worded, referring to “any” interval of absence and only applies where residency is established prior to the absence in question (Duncan v. Canada (Attorney General), 2013 FC 319 at paragraph 41). In the present appeal, there is no dispute that the Appellant was resident in Canada prior to going to the US in April 1965. She was only 18 years of age and lived in Canada her entire life up to that point. She testified that she returned to Canada for Christmas in December 1965, albeit for a short stay. She did not specify the exact dates, but did indicate it was for 4 days’ time. The Appellant, although forgetful and vague at times during the hearing, came across as honest and truth seeking. The Tribunal found her believable and did not doubt her account that she returned to Canada for Christmas in 1965. It is understandable that she had no documentary evidence to prove this voyage because it occurred over 50 years ago.

[40] At any rate, the Tribunal will infer that the Appellant was in Canada no later than December 24 to encompass Christmas Day. As such, the Tribunal finds that her stay in Canada was from December 24 to December 27, 1965 inclusive. Therefore, the Appellant’s absence was from April 3, 1965 to December 23, 1965 inclusive. This period is considered uninterrupted Canadian residence because it constitutes “any” interval of absence of “less than a year” pursuant to paragraph 21(4)(a) of the OAS Regulations. Under this provision, the Appellant’s residence period in Canada extends at least until December 27, 1965.

[41] Given that the period of April 3, 1965 to December 27, 1965 is deemed residence under paragraph 21(4)(a), it is unnecessary to consider whether it is deemed residence under paragraph 21(4)(b) of the OAS Regulations (absence for attending school).

Subsection 21(5.3) and Canada-US Agreement negate residence from April 3 to December 27, 1965

[42] Although the period of April 3, 1965 to December 27, 1965 is determined to be Canadian residence pursuant to paragraph 21(4)(a) of the OAS Regulations, the  application of subsection 21(5.3) of the OAS Regulations negates this residence because the Appellant was working in the US and participating in the US Social Benefit Plan during the period in question.

[43] The Federal Court recently brought clarification to the interpretation of this provision and held in Gumboc that while a claimant is working in the US, he/she cannot argue for the purposes of the OAS to be a Canadian resident, regardless of any ties maintained with Canada, in accordance with Article V(1) of the Canada-US Agreement and subsection 21(5.3) of the OAS Regulations. In other words, the Court stated that because a person is working in the US and is subject to its social security legislation, the person is deemed to be a non-resident of Canada (Gumboc v. Canada (Attorney General), [2014] F.C. 185, paragraphs 50 to 52).

[44] In the present appeal, the Appellant was working in the US and earning wages during the disputed time period of 1965 and 1966; in particular beginning in the second quarter of 1965 through 1966 inclusive (GD2-3 to 4). As such, Article V(1) of the Canada-US Agreement read together with subsection 21(5.3) of the OAS Regulations dictate that the Appellant cannot be deemed resident from April 3, 1965 to December 27, 1965.

[45] These non-resident deeming provisions applied to the facts in this appeal override the resident deeming provisions of paragraphs 21(4)(a) and (b) of the OAS Regulations. This is supported as well by another Federal Court decision in Stachowski v. Canada (Attorney General), 2005 FC 1435 where the Court  considered the interaction between subsection 21(5.3) and another resident deeming provision found at paragraph 21(3) of the OAS Regulations, albeit in the context of the application of the Canada-Germany agreement. Despite the different facts, the Court held that subsection 21(5.3) applies to all residents including “deemed residents”.

[46] The Tribunal applies the same principles as the Federal Court to the application of subsection 21(5.3) in interaction with paragraphs 21(4)(a) and (b) of the OAS Regulations and finds that the Appellant is deemed not to be a resident of Canada from April 3, 1965 to December 27, 1965 as she was subject to the legislation of the US at that time.

Other periods of Canadian residence not established

[47] The residence analysis does not end here because it is necessary to establish the Appellant’s full residence period in Canada after turning 18 for the purposes of determining her eligibility to an OAS pension.

[48] The Tribunal notes that the Appellant had a US PR Card decreeing her as a US resident as of April 3, 1965. However, PR status is not a bar to OAS pension entitlement. In the decision Ding, 2005 FC 76 at paragraph 58, the Federal Court explained that “residency is a factual issue that requires an examination of the whole context of the individual under scrutiny”. Consequently, Canadian citizenship alone does not equate to Canadian residence. It is one factor to consider as another tie to Canada.

[49] The test to determine Canadian residence is a broad factual one under the OAS regime. The residence analysis considers several factors such as:

1. ties in the form of personal property (bank accounts, business, furniture, automobile, credit card);
2. social ties (membership with organizations or associations, professional membership);
3. other ties to Canada (hospital and medical insurance coverage, driver's license, property tax statements, public records, immigration and passport records, federal and provincial income tax records);
4. ties in another country;
5. regularity and length of stay in Canada and the frequency and length of absences from Canada; and
6. the lifestyle of the person or his establishment in Canada.
   (Canada (Minister of Human Resources Development) v. Ding, 2005 FC 76 (Ding))

[50] A thorough review of the evidence and the factors in the decision Ding establishes that the Appellant’s mode of life and roots were more deeply and continuously planted in the US as of April 3, 1965. By then, she had permanent residence status in the US. She continued her career in the airline industry after obtaining her diploma in this field from a US school in August 1965. She met an American and they married in December 1966. They resided together in the US since, first renting then purchasing a property in Illinois around 1976. The Appellant has worked and paid into the US Social Security system her entire adult life, and as discussed above, is therefore deemed a non-resident of Canada during those times pursuant to subsection 21(5.3) of the OAS Regulations and Article V(1) of the Canada-US Agreement. She has held active bank accounts in the US since 1965.

[51] The Tribunal finds that the Appellant’s time spent in Canada after April 2, 1965 has been presence, not residence. Essentially she has returned to Canada to visit family. Her formal ties to Canada have not been as strong as those to the US. She only recently opened a bank account in Canada and has only used it when visiting Canada. She owns no property in Canada. She has not paid income taxes in Canada nor has she contributed to the CPP.

[52] In summary, after April 2, 1965 the Appellant was legally deemed a non-resident of Canada. Moreover, she uprooted from Canada in favour of the US. The evidence overwhelmingly supports this conclusion. As such, she has no additional Canadian residence after April 2, 1965 for the purposes of her eligibility to an OAS pension.

Conclusion: Appeal denied

[53] Since the Appellant’s Canadian residence period after attaining age 18 ended on April 2, 1965, she does not meet the minimum residence requirement under domestic law or Article VIII, sub-paragraph 1(b)(ii) of the Canada-US Agreement. The analysis therefore ends here, and her appeal must be denied.