Vol. 148, No. 8 — April 9, 2014
SI/2014-31 April 9, 2014
JOBS, GROWTH AND LONG-TERM PROSPERITY ACT
Order Fixing April 1, 2014 as the Day on which Section 466 of the Act Comes into Force
P.C. 2014-302 March 27, 2014
His Excellency the Governor General in Council, on the recommendation of the Minister of Employment and Social Development, pursuant to subsection 467(1) of the Jobs, Growth and Long-term Prosperity Act, chapter 19 of the Statutes of Canada, 2012, fixes April 1, 2014 as the day on which section 466 of that Act comes into force.
(This note is not part of the Order.)
The purpose of the Order in Council is to bring section 466 of the Jobs, Growth and Long-term Prosperity Act (the Act) into force.
The coming into force of section 466 of the Act makes effective the amendment to the Old Age Security Act (OAS Act) that provides the authority to impose an administrative monetary penalty on a person who knowingly fails to correct inaccuracies in the information that the Minister of Employment and Social Development (the Minister) intends to use to approve payment of an Old Age Security (OAS) benefit in the context of automatic enrolment. This amendment will provide the Minister with an additional enforcement measure to deter individuals from obtaining OAS benefits to which they are not entitled.
The objective of the OAS program is to ensure a minimum income to seniors and help reduce the incidence of low income among Canada’s seniors. OAS benefits include the basic pension, which is paid to all individuals aged 65 and older who meet the residence requirements, the Guaranteed Income Supplement (GIS) for low-income seniors, and the Allowances for low-income individuals aged 60 to 64 who are the spouses or common-law partners of GIS recipients, or who are widows or widowers.
The Act, which received Royal Assent on June 29, 2012, includes various amendments to the OAS Act intended to improve services and introduce administrative efficiencies. In particular, it contains amendments to allow for the automatic enrolment of eligible individuals for OAS benefits.
The introduction of automatic enrolment provides the Minister with the discretion to waive the requirement for an application for OAS benefits, when the Minister is satisfied that, on the basis of the information obtained under the OAS Act, the individual meets the eligibility requirements for these benefits. In situations where there is insufficient information for the Minister to assess eligibility, the requirement to submit an application for a benefit still applies.
The automatic enrolment provisions of the OAS Act require the Minister to inform the individual of the information that will be used to approve payment of a benefit (e.g. subsection 5(5) of the OAS Act for the OAS pension), and require the individual to correct any inaccuracies in that information (e.g. subsection 5(6) of the OAS Act for the OAS pension). The provisions for the automatic enrolment of the GIS and the Allowances will come into force at a later date through Orders in Council.
The current administrative monetary penalty provisions of the OAS Act came into force on April 1, 2010. Under these provisions (section 44.1), the Minister has the authority to impose an administrative monetary penalty of up to $10,000 against applicants, beneficiaries or other parties who receive or try to receive benefits through misrepresentations or deliberate omissions (as of December 2013, no penalties had been imposed). However, this authority does not extend to individuals approved for payment under automatic enrolment.
The first phase of the automatic enrolment initiative is the automatic enrolment of individuals who have 40 years of Canadian residence after age 18 and are therefore eligible for a full OAS pension. The legislative amendments that allow for the automatic enrolment for the OAS pension, along with related amendments to the Old Age Security Regulations, came into force on March 1, 2013, through Orders in Council (P.C. 2013-140 and P.C. 2013-145).
The first letters notifying individuals (age 64 plus one month) of their eligibility to automatic enrolment for the OAS pension were sent in May 2013. These individuals have until they turn 65, in April 2014, to correct any inaccuracies in the information. As a result, this provision must be brought into force by April 1, 2014, to allow the Minister to impose penalties, where appropriate, on individuals who commit a misrepresentation in the context of automatic enrolment for the OAS pension.
Since May 2013, an average of approximately 10 000 individuals per month (about one-third of new pensioners) have been notified of their eligibility to automatic enrolment. Service Canada has not received a significant number of correction notices to date. However, these individuals have until their 65th birthday to notify the Minister of any inaccuracies.
The coming into force of section 466 of the Act will strengthen the existing penalty authority, by ensuring that administrative monetary penalties can also be imposed when individuals knowingly fail to correct the information that the Minister will use for their automatic enrolment. The implementation of these penalty provisions will enable the Minister to maintain the integrity of the OAS program by deterring abuse.
Upon coming into force, any penalties that are imposed within the context of automatic enrolment will be administered in accordance with the Department’s existing administrative policies and operational frameworks. These operational policies provide the Minister with the flexibility to impose a penalty that is commensurate with the size of the overpayment and the severity of the misrepresentation, as well as to consider any mitigating circumstances that may be relevant to the individual’s case.
It is also important to note that subsection 27.1(1.1) of the OAS Act allows an individual to request that the Minister reconsider the decision to impose a penalty, and/or reconsider the amount of the penalty. If required, subsection 28(1) of the OAS Act permits these individuals to appeal these reconsideration decisions to the Social Security Tribunal’s General Division.
The proposed amendment to the OAS Act to add a penalty provision was included in the Act, which was discussed at the House of Commons Standing Committee on Finance, as well as at the Senate Standing Committee on National Finance. The proposal did not elicit any debate at either committee.
Given that this amendment to the OAS Act was tabled in Parliament as part of the Act, no additional consultations were deemed necessary.
The penalty provisions only apply to individuals who knowingly attempt to obtain benefits to which they are not entitled. The amendment is therefore not considered controversial, and is unlikely to encounter opposition.
Old Age Security Policy
Income Security and Social Development Branch
Employment and Social Development Canada
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