Debt to the Ministry of Social Development and Poverty Reduction got you feeling down? Unsure how the debt was calculated or how the Ministry will collect on it? You’re not alone. TAPS’ income assistance advocates regularly speak to people who have questions and concerns about debts to the Ministry. So we’ve decided to do a breakdown of the most common debts people incur and the ways the Ministry collects on these debts.
Types of Ministry Debts
1. Repayable Hardship Assistance
Section 8 of the Employment and Assistance Regulation disqualifies people from receiving income assistance when they’ve applied for another type of income. This does not apply to employment income, or types of “exempt” income, like child support, GST credits, or Canada Pension Plan (CPP) children benefits, but does apply to income from Employment Insurance (EI), non-exempt CPP, spousal support, and other non-exempt sources.
When someone is prevented from receiving income assistance because they’ve applied for income from another source, they may be eligible for repayable hardship assistance while waiting for the other income to come in. However, as a condition of receiving hardship assistance, the person must agree in writing to repay the amount of hardship assistance received.
2. Repayable Supplements
Some Ministry supplements are also considered repayable, meaning the amount issued for the supplement must be repaid to the Ministry. Before receiving the supplement, a person is required to sign a document agreeing to repay the Ministry for the amount received. For some supplements, like security or utility deposit supplements, the agreement allows the Ministry to begin collecting on the debt immediately, while for other supplements, like reconsideration or appeal supplements, collection is dependent on the outcome of the reconsideration or appeal, and so begins at a later date, if applicable.
An overpayment occurs when a person receives Ministry assistance—either hardship, income, or disability assistance—that they were not entitled to under the legislation. If a person receives income or has assets over the allowable limit, if their family size changes, or if they have a reduction in shelter costs below their shelter assistance amount ($375), they may become ineligible for part or all of their forthcoming benefit. Overpayments typically occur when a person does not report these changes to the Ministry, and is often discovered through investigative processes like file or compliance reviews. At TAPS, we most often see overpayments result when clients have misunderstood the Ministry’s complicated reporting requirements, or have not received the help they need to complete their monthly reports. It is also important to note that an overpayment can be the result of an administrative error on the part of the Ministry, which, as frustrating as it is, still results in a debt owed to the Ministry.
An overpayment is calculated by totalling the amount of assistance the person received that they were ineligible for, and should never exceed that amount. For example, say Serena, who receives $710 in income assistance, forgot to report her earnings of $1,310 and continued to receive her full income assistance entitlement. Because her earnings exceeded her total assistance amount and her $400 earnings exemption, she was technically ineligible for the assistance she received the following month. Therefore the Ministry should calculate an overpayment of $710 (the amount of assistance Serena received that she was ineligible for), not $1,310.
The Ministry has a duty to inform clients about any alleged overpayment and typically does so by written notice. The written notice should include the reason(s) for the alleged overpayment, a breakdown of how the alleged overpayment was calculated, and information about the recovery process. The Ministry also has a duty to inform clients of their right to appeal through the Ministry’s appeal processes. TAPS routinely helps people dealing with overpayment issues, so if you have concerns about an alleged overpayment being applied to your file, please don’t hesitate to contact us.
Ministry Recovery Processes
Section 28 of the Employment and Assistance Act and Section 19 of the Employment and Assistance for Persons with Disabilities Act give authority to the Ministry to collect on client debts owed to it, regardless of whether the debt is the result of Ministry error, and also permit various collection processes. The type of recovery action the Ministry undertakes varies depending on the nature of the debt, and whether or not the person is still receiving assistance from the Ministry.
1. Assignments/Consent to Deduct
The Ministry requires that a person sign an assignment or consent to deduct form when there is a possibility of a person receiving forthcoming income from another agency, like those outlined above in the “Repayable Hardship Assistance” section. By signing an assignment/consent to deduct, a person is authorizing the other agency to send forthcoming funds directly to the Ministry as a way of repaying the debt. For example, say Philippe is waiting for the outcome of an EI application he submitted several weeks ago, and in the meantime he receives hardship assistance from the Ministry. By signing the assignment/consent to deduct, Philippe is permitting Employment and Social Development Canada to send a portion of his forthcoming EI payment (typically an initial EI payment is a lump sum payment, as EI is backdated to the date of application) directly to the Ministry to repay the debt. It is important to note that the payment provided from the agency, in Philippe’s case, Employment and Social Development Canada, to the Ministry should not exceed the debt amount.
While technically people “choose” to sign the assignment/consent to deduct, for most people there’s no real choice at all, as people typically only apply for Ministry help when they have no other option (it’s actually a requirement, as Ministry programs are considered programs of “last resort”), and completing the security of repayment form specified by the Ministry is a condition of eligibility for hardship assistance.
2. Repayment Agreements
If a person who has incurred a debt to the Ministry continues to receive monthly assistance, the Ministry may request that the person sign a Repayment Agreement. By doing so, the person acknowledges the debt to the Ministry and agrees to begin repaying the Ministry immediately through a deduction from their monthly assistance. The minimum monthly repayment (or amount to be deducted from assistance) is $10 a month for most overpayments, though it increases to $20 a month for debts from security and utility deposits.
3. Promise to Repay
The Ministry requires that a person sign a Promise to Repay before they are issued certain types of repayable hardship or repayable supplements. Similar to the Repayment Agreement, the Promise to Repay is also an acknowledgement of debt, but instead of authorizing the Ministry to begin collection action immediately, it is an agreement to pay the debt at a later date. Typically this type of agreement is used when the person is waiting for an outcome that will determine whether or not a debt will be incurred. For example, a reconsideration supplement issued for assistance deducted from someone’s monthly entitlement would only be repayable if their request for reconsideration is unsuccessful.
4. Overpayment Notifications
Instead of a Repayment Agreement, which requires that a person acknowledge their debt to the Ministry, a person who incurs an overpayment because of personal error should be provided with an Overpayment Notification. By signing the Overpayment Notification, a person acknowledges that they were advised of the overpayment and of their right to appeal through the Ministry’s appeal processes. It is not an acknowledgment of debt, and does not prevent a person from exercising their right to appeal. The Overpayment Notification should be accompanied by a chart breaking down how the Ministry calculated the overpayment. It should also include an outline of the Ministry’s collection action. As with a Repayment Agreement, if the person is still receiving Ministry assistance, the overpayment debt will be paid back to the Ministry through a monthly deduction from their assistance (minimum $10 per month).
5. Offense Overpayments/Litigation
In situations where the alleged overpayment exceeds $5,000, the Ministry may refer a person’s file to a Ministry Investigator (MI) to consider whether criminal charges will be recommended to Crown Counsel. Criminal prosecution may result in incarceration and/or a restitution order requiring the person to repay an amount ordered by the court. If the restitution determined is less than the full debt owed to the Ministry, the Ministry may also initiate collection action on the balance.
If a person is convicted either for fraud or for falsely misleading the Ministry, and continues to receive assistance, the minimum amount they are required to repay is $100 per month, though there are exemptions for people experiencing or at risk of homelessness, or if the deduction would result in danger the person’s health.
6. Collection Agencies
Debts to the Ministry do not go away, even if the person is no longer receiving Ministry assistance. For example, if a person turns 65 and is now receiving seniors’ benefits, if they have employment income high enough to make them ineligible, or if they have moved outside of the province, the person would no longer receive income assistance, but they would still have a debt to the Ministry.
If a person has an outstanding Ministry debt and is no longer receiving Ministry assistance, the debt is automatically sent from the Ministry’s Financial and Administrative Services Branch (FASB), which is tasked with reviewing the collectability of Ministry debts, to Revenue Service of British Columbia for collection within 90 days of the file closing. Once transferred, a repayment agreement will be created with Revenue Services, who will take on collection action from there on in.