During the Throne Speech on September 23, 2020, the federal government announced its commitment to introduce a new benefit for Canadians with disabilities, called the Canada Disability Benefit. This new benefit is intended to assist Canadians with disabilities in affording basic necessities of life, such as food, clothing, housing, and transportation. This new benefit is particularly welcome in the context of the global pandemic during people with disabilities have been largely ignored and excluded from government response benefits.
At present, little is known about this benefit, who will qualify, when it will roll out, whether it will be subject to employment earnings clawbacks, etc. The federal government has, however, announced that the new benefit will be modelled after the Guaranteed Income Supplement (“GIS”) for seniors. We can therefore make predictions about the design of the new benefit by referring to the GIS.
The GIS is ‘income tested’. If the new benefit is also income tested, it means that net income will likely be used to determine who qualifies and how much eligible applicants will receive. This is good news because there are many advantages to income tested programs, including that there are no requirements for work history or contributions, they do not count assets when determining eligibility, and benefit payments go up when other sources of income go down. The new benefit will also likely not be taxed since GIS payments are not taxable. It is unclear how the new benefit will define ‘disability’ for eligibility purposes.
On the other hand, the GIS has a high reduction rate of 50%. This means that GIS payments are reduced by 50-cents on every dollar of income earned in excess of $5,000. A partial exemption of 50% also applies up to a maximum $10,000 from employment and self-employment beyond the basic $5,000. Despite these exemptions, the reduction rate is quite high for the GIS. This is a significant red flag for the new benefit. We would hope that the new benefit is designed so it does not discourage recipients from participating in the labour market.
PooranLaw will continue to monitor developments related to the Canada Disability Benefit and provide updates on our website. In the meantime, if you require legal assistance, we encourage you to reach out to your regular PooranLaw lawyer, or any member of our team.
Note: This article provides general information only and does not constitute, and should not be relied upon as, legal advice or opinion. PooranLaw Professional Corporation holds the copyright to this article and the article and its contents may not be copied or reproduced in any form, in whole or in part, without the express permission of PooranLaw Professional Corporation.
