Expected to Work/Barriers to Full Employment Policy & Procedures

Published Date: January 24, 2018
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11 Income

Income Exemptions

AUTHORITY

Income Support, Training and Health Benefits (ISTHB) Regulation, Section 23
ISTHB Regulation, Schedule 2, Section 1
MO-2016-22 BFE/ETW & Full-Time Learners Ministerial Order: Section 24, Schedules 1, 2, and 4
MO 2016-25 Exemption of Canada Child Benefit
MO 2016-18 Exemption of Alberta Child Welfare Class Action Settlement
MO 2016-01 Exemption of Alberta Child Benefit
MO-2017-13 Agricultural Benefits Settlement Agreements
MO-2017-17 Piikani Nation Grazing Leases Specific Claim Settlement Agreement

INTENT

Certain types of income are fully or partially exempt to ensure that:

  • Clients have incentives to earn money from employment
  • Clients get the benefit of specific federal and provincial financial supports available to other Canadians
  • Clients may have some resources they can use to purchase items that are not available through income support
  • Dependent children are encouraged to accumulate savings for their future.

POLICY

Income exemptions specified in Schedule 2 of the Income Support, Training and Health Benefits Regulation (ISTHB) Regulation apply to all Income Support (IS) recipients. No other income exemptions are to be granted under any circumstances. Financial resources available to a household unit for the purpose of determining financial eligibility under this Regulation include the income received by all members of the household unit, except for income exempted as follows:

Compensation and Other Income That is 100% Exempt:

    1. A payment received under Schedule A or B to the 1986-1990 Hepatitis C Settlement Agreement other than;
    • A payment under section 4.02 of the Agreement for loss of income, or
    • A payment under section 6.01 of the Agreement for loss of support resulting from the death of the infected person.

Rationale
Payments received under section 4.02 of that Agreement are monthly payments received due to loss of income. As these payments are income replacement payments, they are not exempt.

Payments received under section 6.01 are paid to a dependent for loss of support upon the death of the infected person. These payments are also ongoing support payments and are also not exempt.

 b. A payment received for the pre-1986 and post 1990 Hepatitis C Settlement Agreement.

Rationale
There is no method of distinguishing loss of income and loss of support payments made in this agreement, therefore the entire payment is exempt.

  1. A payment received from the government of a province or territory of Canada as compensation for a member of the household unit having been infected with the HIV virus through the blood supply.
     
  2. A benefit paid under the Victims of Crime Act, except amounts received for lost income. 
     
  3. Money received as compensation for loss or damage to property of a member of the household unit if the money is used to repair or replace the property within a reasonable time as determined by the worker or is used for some other purpose approved by the Supervisor. 
     
  4. A refunded damage deposit under a tenancy agreement or a refunded deposit that had been paid in respect of a utility or telephone. 
     
  5. A moving allowance provided by a landlord on termination of a tenancy agreement. 
     
  6. A payment received by a member of the household unit pursuant to an order for the support of a child who is not a member of the household unit.
    Rationale
    This exemption allows a parent receiving court ordered child support for a child who has attained the age of majority a total exemption on such income. This exemption allows the recipient to use the child support income towards the support of the child. This prevents the recipient having to go to court to have the child support order amended so that the child is paid directly. If the child is in receipt of IS, the child support is income for that recipient. 
  7. A payment of a non-recurring nature received from a First Nation this is paid equally to each member on the First Nation band list.
    Note
    This does not include a per capita distribution resulting from specific claims (surrenders).
  8. Payments under an agreement between a First Nation and Her Majesty in Right of Canada with respect to a Specific Claim (Surrender), as specifically approved from time to time by the Minister.
    Rationale
    Allows the Minister to exempt specific claim settlements from time to time. Directives are used to notify workers when these payments are made and are specifically exempt.  
  9. A payment received from Tsuut'ina First Nation as a result of the Final Calgary Ring-Road Agreement dated November 27, 2013 between the Tsuut'ina Nation and Her Majesty the Queen in right of Alberta and that is paid equally to each member on the Tsuut'ina First Nation band list.
     
  10. Payments of arrears of child support that are not owing to the government. These are arrears that are owing to the recipient for months when the recipient was not on income support.
    Rationale
    This allows parents to invest income from child support arrears (money owed to the client during the time they were not receiving income support) for the child’s future.  
  11. A Common Experience Payment (CEP) and Independent Assessment Process Payments (IAP) under the Indian Residential Schools Settlement Agreement to the extent that it does not replace lost income, support or medical care that was provided by the Income Support program. 
     
  12. Roth/Fifield Class Action Settlement Agreement from the Government of Alberta. 
     
  13. A Slave Lake Wildfire Relief Payment or a payment under the Emergency Accommodation Program to persons subject to the mandatory evacuation order issued by the Alberta Emergency Management Agency in May, 2011. 
     
  14. Registered Disability Savings Plan (RDSP) payments.
     
  15. Compensation issued by the Government of Alberta pursuant to a Disaster Recovery Program for the June 2013 floods.
     
  16. Payments issued by charitable organizations for the June 2013 floods.
     
  17. Compensation issued by the Government of Alberta for damage or loss caused by a disaster as determined by the Government of Alberta.   
     
  18. Payments issued by a charitable organization for a disaster as determined by the Government of Alberta.
     
  19. A Child Welfare Class Action Settlements payment from the Government of Alberta.
     
  20. A non-recurring per capita distribution payment received from the First Nation and paid equally to each band member, from the following agreements:
    • Agricultural Benefits Settlement Agreements; and
    • The Piikani Nation Grazing Leases Specific Claim Settlement Agreement.

Government Income that is 100% Exempt:

  1. Certain payments made by the Government of Canada or Government of Alberta which the Minister specifically exempts from time to time. Notification of these specific exemptions is provided when approved by the Minister.
     
  2. An Alberta Child Benefit.
     
  3. A Canada Child Tax Benefit (CCTB) under the Income Tax Act (Canada).
     
  4. A Canada Child Benefit (CCB) under the Income Tax Act (Canada).

Rationale
These payments are exempt because the income is intended to go toward the child’s basic needs. The exemption includes retroactive payments.

Note 
For July 2016 to June 2017, the Government of Canada has provided a monthly calculation to represent the maximum NCBS portion of the Canada Child Benefit, known as the Federal Child Benefit amount. The Child Disability Benefit is added to the Canada Child Benefit payment for eligible families.
  1. A Goods and Services Tax credit (GST) received from the Government of Canada. 
     
  2. An Alberta Family Employment Tax Credit received from the Government of Alberta. 
     
  3. Money received from the Government of Alberta to assist a person with a disability in purchasing services that will enable the person to live in the community.
    Rationale
    This payment is exempt to cover the home care costs and individual service plan maintenance expenses for disabled clients.  
  4. Money received from a management body under the Alberta Housing Act for the payment of utilities other than electricity
     
  5. Money received under a program of the Government of Canada or Alberta for home repairs or renovations. 
     
  6. A payment, refund or credit directly or indirectly from the Government of Canada or Alberta that is designed to protect consumers from high energy costs. This includes the Alberta Climate Leadership Adjustment (carbon) rebate which is intended to offset the costs associated with the carbon levy.  
     
  7. A grant or loan to start a business, excluding any amount as a living allowance that is received from a federal or provincial government department or agency or from a non-profit organization. 
     
  8. A loan from a financial institution, excluding a government loan for post-secondary studies.
    Rationale
    Clients are expected to repay monies borrowed from a financial institution.   
  9. A payment made under a Government of Alberta program for the maintenance costs of a person to whom the applicant or recipient is providing or is responsible for providing care.
    Rationale
    Foster parents and supported adoptive parents get funds under the so they can meet the needs of the children placed, temporarily or permanently, in their care. Host families get funds, under a program sponsored by Services to Persons with Disabilities, so they can meet the needs of the disabled adults placed in their care. Guardians receive benefits under the Child Financial Support Program (CFS) of Children and Youth Services to meet the needs of children whose parents are unwilling or unable to properly care for their child. 
  10. The Universal Child Care Benefit (UCCB) received from the Government of Canada has been exempted by the Minister. 
     
  11. Direct to Tenant Rent Supplement program payments. 
     
  12. The Working Income Tax Benefit received from the Government of Canada.

  13. A payment made by the Government of Canada or Alberta for part-time training costs as follows:
    • Part-time Canada Student Loan (Government of Canada)
    • Canada Student Grant for Part-time Studies (Government of Canada
    • Canada Student Grant for Persons with Permanent Disabilities (Government of Canada)
    • Canada Student Grant for Services and Equipment for Persons with Permanent Disabilities (Government of Canada)
    • Alberta Works Skills Investment Bursary (Government of Alberta) 
       
  14. A payment made by the Government of Canada or Alberta for Disability Related Employment supports and/or services to assist Albertans with disabilities to access Community and Social Services funded full or part-time training programs and / or to obtain employment.

Awards, Prizes and Gifts:

  1. An award or prize received by a member of the household unit in recognition of outstanding academic or community achievement is considered as income less an exemption of $3,500 per person per academic year. This maximum rate is determined by the Minister.

  2. Cash gifts of a non-recurring nature from anyone to a maximum of $900 each calendar year per each member of the household unit.

Earned Income Exemptions:

Employment Income

The earnings exemption for employment income is as follows:

  • when earned by an adult member of a household unit with only one adult, the first $230 plus 25% of the remainder per month, or
  • when earned by an adult member with a cohabiting partner, the first $115 plus 25% of the remainder per month; or
  • when earned by a dependent child who is not attending school, the first $350 plus 25% of the remainder per month.
  • when earned by a dependent child while attending school is 100% exempt. All earnings for children, who are in school or in the summer months between school terms, are 100% exempt to provide an incentive to accumulate savings for their future.

Self Employment Income

Under Section 23(5) and (6) of the ISTHB Regulation, all self-employment income is deducted dollar for dollar from program benefits with the following exceptions:

  1. Home Based Business – Barriers to Full Employment (BFE)
    • Where the BFE adult member of a household unit with only one adult is operating a home based business, the first $230 plus 25% of the remainder of the monthly income is exempt.
    • Where the BFE adult member is operating a home based business and has a cohabiting partner, the first $115 plus 25% of the remainder of the monthly income is exempt.
  2. Home Based Business – Child Care Services
    • Where the adult member of a household unit with only one adult provides child care in their home, the first $230 plus 25% of the remainder of the monthly income is exempt.
    • Where the adult member with a cohabiting partner provides child care in their home, the first $115 plus 25% of the remainder of the monthly income is exempt.
  3. Dependent Child
    • The first $350 plus 25% of the remaining self-employment income earned per month for a dependent child who is not attending school, and is operating a home based business. 100% exemption for self-employment income earned by a dependent child while attending school.

Room and Board

Gross income received by the applicant or recipient from a room and board arrangement in the applicant’s or recipient’s primary residence is 75% exempt.

Note
A recipient who lives with relatives who are also receiving IS benefits is not paying room and board. The “landlord” is using the “tenant’s” money to buy food for the “tenant”. Do not deduct this money from the “landlord’s” benefits.

Rental

Gross rental income received by the applicant or recipient from the applicant’s or recipient’s primary residence is 50% exempt.

Gross rental income from a property that is not the applicant's or recipient's primary residence is not eligible for an exemption and must be deducted, dollar for dollar, from benefits.

Note
Staff must determine that a rental situation exists before applying the above policy. Situations may occur where a client collects rent from roommates to forward a lump sum payment to the landlord and does not financially gain from the situation. In these cases, the money collected is not considered income and is not used in determining eligibility for Income Support because the client does not have discretion to use the money for a purpose other than paying the roommates’ portion of the rent.