L. B. v. Minister of Employment and Social Development

L. B. v. Minister of Employment and Social Development Collection Old Age Security (OAS) and Guaranteed Income Supplement (GIS) Decision date 2017-01-27 Neutral citation 2017 SSTGDIS 14 Reference number GP-15-2998 Member Jude Samson Division General Division Decision Appeal allowed in part Decision Content On this page Overview Method of proceeding The law Issue Submissions Evidence and analysis Conclusion Reasons and decision Overview [1] The Appellant turned 65 in August 2012. However, there was a delay in submitting her application for an Old Age Security pension (OAS pension). The Minister received it on May 30, 2014 (GD2-8). In February 2015, the Appellant was granted a full pension as of May 2014, the effective date that the Appellant had requested on her application form. The Appellant telephoned the Minister’s call centre three times to get information about her retroactivity, and eventually specified that she had put the wrong date on her initial application. [2] On March 24, 2015, within the prescribed timeframe, the Appellant filed a request for reconsideration, in which she admitted her mistake and requested that her OAS pension be made effective as of August 2012, the month in which she turned 65 (GD1-6). On April 13, 2015, the Minister upheld its initial decision (GD1-4). That decision, made in light of the reconsideration, is the focus of the appeal before the Social Security Tribunal (Tribunal). [3] For the reasons set out below, the appeal is allowed in part. Method of proceeding [4] The hearing of this appeal was held by written questions and answers for the following reasons: There are gaps in the information in the file and/or a need for clarification; and This method of proceeding respects the requirement under the Social Security Tribunal Regulations to proceed as informally and as quickly as circumstances, fairness and natural justice permit. [5] The Appellant never answered the Tribunal’s questions. The Minister’s answers were received on November 29, 2016, and the Appellant had until January 6, 2017, to provide additional written submissions, but the Tribunal did not receive any. The law [6] OAS pensions are paid under the Old Age Security Act (OAS Act) and the Old Age Security Regulations (OAS Regulations). To qualify for an OAS pension, an individual must be 65 years of age or older and must first submit an application. For those who are over 65 when they apply, the retroactive payment is limited. Subsection 5(1) of the OAS Act reads as follows: Limitations 5 (1) No pension may be paid to any person unless that person is qualified under subsection 3(1) or (2), an application therefore has been made by or on behalf of that person and the application has been approved, and, except as provided in this Act, no pension may be paid to any person in respect of any period prior to the day on which that person’s application is approved. [Emphasis added] [7] The term “application form” is defined in subsection 2(1) of the OAS Regulations, and section 3 of those same Regulations reads as follows: Application Forms 3(1) Where required by the Minister, an application for a benefit shall be made on an application form. (2) Subject to subsections 5(2) and 11(3) of the Act, an application is deemed to have been made only when an application form completed by or on behalf of an applicant is received by the Minister. [8] Section 8 of the OAS Act and section 5 of the OAS Regulations cover the date on which the Minister’s certification comes into effect and, consequently, the maximum retroactivity authorized by the Act. They read as follows: Commencement of Pension 8(1) Payment of pension to any person shall commence in the first month after the application therefore has been approved, but where an application is approved after the last day of the month in which it was received, the approval may be effective as of such earlier date, not prior to the day on which the application was received, as may be prescribed by regulation. Exception (2) Notwithstanding subsection (1), where a person who has applied to receive a pension attained the age of sixty-five years before the day on which the application was received, the approval of the application may be effective as of such earlier day, not before the later of (a) a day one year before the day on which the application was received, and (b) the day on which the applicant attained the age of sixty-five years, as may be prescribed by regulation. . . . Approval of an Application for a Pension 5. (1) Subject to subsection (2), where the Minister (a) is satisfied that an applicant is qualified for a pension in accordance with sections 3 to 5 of the Act, and (b) approves the application after the last day of the month in which it was received, the Minister’s approval shall be effective on the latest of (c) the day on which the application was received, (d) the day on which the applicant became qualified for a pension in accordance with sections 3 to 5 of the Act, and (e) the date specified in writing by the applicant. (2) Where the Minister is satisfied that an applicant mentioned in subsection (1) attained the age of 65 years before the day on which the application was received, the Minister’s approval of the application shall be effective as of the latest of (a) the day that is one year before the day on which the application was received, (b) the day on which the applicant attained the age of 65 years; (c) the day on which the applicant became qualified for a pension in accordance with sections 3 to 5 of the Act; and (d) the month immediately before the date specified in writing by the applicant. [Emphasis added] [9] As one can already see, individuals who are over 65 when they apply for an OAS pension are treated slightly differently. In fact, these individuals can qualify for certain retroactive payments and, in cases where the pension payment is delayed, they can also receive a readjusted pension on an actuarial basis for the period of the delay (as of July 1, 2013) (OAS Act, section 7.1). [10] On March 1, 2013, the OAS Act was amended to enable OAS pension beneficiaries to request its cancellation. The relevant provisions are section 9.3 of the OAS Act and section 26.1 of the OAS Regulations. Request to Cancel Pension 9.3 (1) A pensioner may, in the prescribed manner and within the prescribed time after payment of a pension has commenced, request cancellation of that pension. Effect of Cancellation (2) If the request is granted and the amount of any pension and related supplement and allowance is repaid within the prescribed time, a) the application for that pension is deemed never to have been made; and b) the pension is deemed for the purposes of this Act not to have been payable during the period in question. . . . Cancellation of Pension 26.1 (1) For the purposes of subsection 9.3(1) of the Act, a request for cancellation of a pension shall be made to the Minister in writing no later than six months after the day on which payment of the pension begins. (2) For the purposes of subsection 9.3(2) of the Act, the amount of any pension and related supplement or allowance shall be repaid no later than six months after the day on which the request is granted. Issue [11] Simply put, does the Appellant qualify for an OAS pension prior to the date that she specified on her application form? Submissions [12] The Appellant argued that she became eligible for her OAS pension in August 2012 and that she was denied sums owed to her. [13] The Minister argued that an applicant can make changes to their pension application as long as it has not been approved and processed for payment. Once payments had been issued, the Appellant could no longer request that her benefit be changed. At that stage, the only recourse available to the Appellant was to cancel her current pension, then submit a new OAS pension application. Therefore, the maximum retroactivity authorized by the Act—11 months—could have been applied based on the date on which the new application was filed. Evidence and analysis [14] The material facts are not in dispute. On May 26, 2014, the Appellant applied for an OAS pension (GD2-8). Below is how the Appellant answered question 10 on her application form (GD2-9): 10. When do you want your pension to start? Important: Please read the information sheet under “When to apply” before completing this section. Select one only As soon as I qualify As of (indicate a date) __2014-05_ Note: If you indicate a date, no payment will be made for any period before that date, even if you qualify before. [15] Upon receipt of the supplementary documents, the Appellant’s claim was approved on February 11, 2015, at the rate of a full pension (GD2-5). The letter specifies that the pension was made effective from May 2014, and that the first payment would therefore cover the period from May 2014 to February 2015. The letter that the Minister sent concludes as follows (GD2-7): [Translation] If you disagree with our decision If you wish to know how we made this decision, you can call us or write to us, and we will provide you with an explanation. If you disagree with our decision, you can ask us to reconsider it. This means that we will review your file again as well as the reasons why you disagree with us. Employees who were not involved in the initial decision will reconsider this file. After the reconsideration, we will inform you whether we have amended our decision. If you wish for us to reconsider our decision, you must submit to us a request in writing within 90 days of receiving this letter. You must include the following information in your request: Your name, address and client identification number [...]; the reasons why you disagree with our decision; any new information that you believe could have an effect on our decision. [Emphasis added] [16] Upon receiving the notice of eligibility, the Appellant telephoned the Minister’s agents to ask them for explanations, and she noticed that she had made a mistake (GD3-2, para. 6). On March 24, 2015, within the prescribed timeframe, the Appellant filed a request for reconsideration in which she claims the following (GD2-4): Born on August 5, 1947, which therefore means that I became eligible to receive my old-age pension in August 2012. […] At the end of February 2015, I finally received an initial payment that would cover the period from May 2014 to today. To my surprise, I realized that I had not received all that was owed to me, namely an amount covering the period from August 2012 to April 2014. I therefore contacted one of your agents, as suggested in your letter dated February 11, 2015, letting them know that I failed to understand why I had received the benefits covering the period from May 2014 to today instead of the benefits that were owed to me. Your agent kindly informed me that I had checked the wrong box, namely the one that stipulated the beginning of payment in May 2014 instead of August 2012. Following their response, I deduced that the amount owed to me had not been paid to me, not because I was ineligible, but because I had made a mistake on my application. I therefore ask that my file be revised followed up with my claim. [17] On March 27, 2015, a “level 2 benefit agent” suggested (on page GD2-3) [Translation] “that the start date of the OAS benefit of Ms. be changed so that she can be paid the retroactivity for which she qualifies, namely from June 2013 to today.” The necessary steps for implementing this suggestion are specified; but the suggestion was not actioned. Before the Tribunal, the Minister considers this information as a query on the part of the analyst who had processed the Appellant’s application for payment (GD4-2), rather than as a recommendation. [18] Therefore, on April 13, 2015, the Minister upheld its initial decision by saying that the Appellant had been granted an OAS pension based on the date specified in her application form (GD2-1). Furthermore, she had been sufficiently advised of the consequences of her choice by the note appearing at the bottom of the question (para. 14 above). Finally, due to the delay of her pension, the Appellant was granted an actuarial adjustment of 6%. Retroactive Payments from August 2012 to May 2013 [19] Firstly, subsection 5(1) of the OAS Act states that a person must submit an application for benefits to qualify for an OAS pension and that retroactive payments are permitted only as provided by this Act. [20] Subsection 8(2) of the OAS Act and subsection 5(2) of the OAS Regulations authorize these retroactive payments. However, they state clearly that the effect of the Minister’s certification cannot precede the receipt date of the application by more than one year. Because the first payment is carried out in the month after the certification of the claim (OAS Act, subsection 8(1)), the maximum retroactivity authorized by the Act cannot exceed 11 months from the month in which the application is received. [21] As a result, the retroactive payments that the Appellant has claimed for the period from August 2012 to May 2013 are refused. Retroactive Payments from June 2013 to April 2014 [22] In deciding on this delicate issue, the Tribunal noted the Federal Court decision in Canada (Minister of Human Resources Development) v. Stiel, 2006 FC 466, in paragraph 28, where Judge Snider examined the objectives of this legislative plan: I would describe the OAS regime as altruistic in purpose. Unlike the Canada Pension Plan [R.S.C., 1985, c. C-8], OAS benefits are universal and non-contributory, based exclusively on residence in Canada. This type of legislation fulfills a broad-minded social goal, one that might even be described as typical of the Canadian social landscape. It should therefore be construed liberally, and persons should not be lightly disentitled to OAS benefits. [23] In Ward v. Canada (Human Resources and Social Development), 2008 TCC 25, in paragraph 8, Judge Hershfield noted that the OAS Act is “social welfare legislation which must be construed liberally to favour those who might reasonably be expected to benefit from it.” [24] As such, because the Appellant was over 65 when submitting her application for an OAS pension, it was approved under subsection 5(2) of the OAS Regulations, as follows: 5.(2) Where the Minister is satisfied that an applicant mentioned in subsection (1) attained the age of 65 years before the day on which the application was received, the Minister’s approval of the application shall be effective as of the latest of a) the day that is one year before the day on which the application was received [May 2013]; b) the day on which the applicant attained the age of 65 years [August 2012]; c) the day on which the applicant became qualified for a pension in accordance with sections 3 to 5 of the Act [August 2012]; and d) the month immediately before the date specified in writing by the applicant [April 2014]. [25] The date that was used as the effective date of the Minister’s certification is the month preceding the date specified in writing by the Appellant. [26] The Tribunal also notes firstly that paragraphs 5(2)a) to c) of the Regulations provide that an individual cannot be paid their OAS pension before their eligibility date. Furthermore, as we have just seen, retroactive payments are limited for those individuals who submit a late application. However, paragraph 5(2)d) of the Regulations is slightly different: it consists of a date chosen entirely at the discretion of an applicant who wishes to delay their pension. This provision can be appealing, for example, for those who wish to mitigate tax implications that an OAS pension may cause and for those who wish to benefit from the adjusted pension on an actuarial basis. [27] The Appellant argues that the date written on her application form was a mistake and that it must be changed as specified, in writing, in her request for reconsideration (GD2-4). However, the Minister maintains that the date cannot be changed once payments have begun. To support its position, the Minister does not cite a particular legislative provision, but claims that the OAS Act must be interpreted this way, given the entirety of the text and section 9.3 of the OAS Act, which, since 2013, has enabled beneficiaries to receive a pension or to request its cancellation. [28] In this regard, the Tribunal finds that this legislative plan contains an ambiguity. Paragraph 5(2)d) of the OAS Regulations (cited above) makes a single reference to the “date specified in writing by the applicant.” The legislator had determined that it was worth defining the term “application form” in subsection 2(1) of the OAS Regulations. According to subsection 3(2) of those same Regulations, the Minister may insist that an application form be used. Therefore, if the legislator had wanted to hold an applicant to the date specified on their application form, it could have easily done so by adding a reference in paragraph 5(2)d) to the date that the applicant specified on their application form. However, these words do not appear in the relevant provision. The Tribunal must give effect to the legislator’s decision to omit these words from paragraph 5(2)d). [29] The Tribunal notes that although the Appellant was not held to the date provided on her application form, the Appellant did retain the option of amending that date, as long as the request for amendment was in writing. [30] The Minister does not contest this conclusion. The Minister recognizes that an individual may make changes to their pension claim; however, it argues that such a request should be submitted within a certain timeframe, namely before the first payment of the benefit. In this case, because the payment of the pension had begun, the Appellant had no choice but to request the cancellation of the pension service under section 9.3 of the OAS Act and section 26.1 of the OAS Regulations. In fact, these provisions provide that: a) a pensioner can submit to the Minister an application for cancellation, in writing, within six months of the first payment of the pension; b) the Minister must approve the application for cancellation; and c) all sums paid out must be paid back within six months of the certification date of the application. [31] In response, the Appellant claims that she was unaware of her mistake before the certification of her application. According to the Minister’s calculations, this mistake would have cost the Appellant the following amount (GD4-2): [Translation] “The retroactivity from June 2013 to April 2014 would have represented $6,054.87, and the benefit from May 2014 would have been $551.54 (without mark-up) instead of $584.63 (with mark-up), and so forth for the other payments between June 2014 and those being received presently.” It is therefore understood that, if the appeal is allowed, the Appellant will receive a retroactive payment that is just as substantial, but her monthly payments will decrease. The Minister created a helpful table to illustrate this decrease from about $33 per month to $35 per month (GD4-3). [32] When an applicant is dissatisfied with a decision by the Minister, section 27.1 of the OAS Act applies. For more clarity, the Tribunal cites this provision in both official languages: Request for Reconsideration by Minister Demande de révision par le ministre 27.1 (1) A person who is dissatisfied with a decision or determination made under this Act that no benefit may be paid to the person, or respecting the amount of a benefit that may be paid to the person, may, within ninety days after the day on which the person is notified in writing of the decision or determination, or within any longer period that the Minister may, either before or after the expiration of those ninety days, allow, make a request to the Minister in the prescribed form and manner for a reconsideration of that decision or determination. 27.1 (1) La personne qui se croit lésée par une décision de refus ou de liquidation de la prestation prise en application de la présente loi peut, dans les quatre-vingt-dix jours suivant la notification par écrit de la décision, ou dans le délai plus long que le ministre peut accorder avant ou après l’expiration du délai de quatre-vingt-dix jours, demander au ministre, selon les modalités réglementaires, de réviser sa décision. [33] The Tribunal sees nothing in the OAS Act preventing an applicant from making a change to their pension application at this stage of the process. The Appellant is dissatisfied by a decision “respecting the amount of a benefit that may be paid to [her]” by the Minister. As provided for in Section 27.1, she thereby submitted, within the prescribed timeframe, a request for reconsideration in writing. In the notice of eligibility letter (GD2-7), the Appellant was invited to include with her request for reconsideration [Translation] “any new information that you believe could have an effect on our decision.” [34] In her request for reconsideration in writing (GD2-4), the Appellant therefore amended the date requested for the effective date of her pension, a date that was fully at her discretion to choose. There is no legislative provision that would prevent the Minister from acting on this change while remaining within the limits of the Act. [35] In this case, the Appellant asked that her OAS pension be processed for payment as of her 65th birthday. The Tribunal notes that she had the right to make this change to her application; however, the retroactive payments that could be granted to her were still limited to the 11 months provided for in subsections 5(1), 8(1) and (2) of the OAS Act and paragraph 5(2)a) of the OAS Regulations. [36] Critically, the conclusion that the Minister sought would have the effect of denying the Appellant of retroactive payments for which she qualifies. In doing so, the Minister failed to interpret the OAS Act broadly, and thoughtlessly deprived the Appellant of OAS benefits, all of which was contrary to the Federal Court’s decision in Stiel and the Canadian Tax Court’s decision in Ward. If the legislator had wanted to deny the Appellant of the possibility of making this change at this stage, it should have done so in much more explicit terms. [37] To emphasize this point, the Minister specified in its submissions that the Appellant should have requested the cancellation of her OAS pension in February 2015, when she realized her mistake. Thereafter, she would have had to wait for the Minister’s certification, pay back all the payments that she had received and, lastly, submit a new application form stating that she wished to start receiving her pension as soon as possible. [38] However, because it has already been established that the OAS Act does not provide for more than 11 months of retroactive payments, the Appellant would be denied an even more substantial retroactivity. By filing her pension application in May 2014, the Appellant qualified for retroactivity as of June 2013. If the cancellation of the first pension and the subsequent submission of an application for the second pension are required, other months of retroactivity will be lost (even if the actuarial adjustment would be more substantial). The interpretation that the Minister proposed is therefore unsatisfactory for those who find themselves in the same situation as the Appellant. [39] The OAS Act provides that those who make a mistake for various reasons and who submit a late application for an OAS pension can be granted up to 11 months of retroactive payments. Why would the Appellant’s mistake be treated differently, especially since she reported the change that she wanted to make to her application as quickly as possible? [40] In the documents filed with the Tribunal, neither party referred to the relevant case law. Therefore, in its written questions, the Tribunal brought to the parties’ attention the Federal Court case in Larmet v. Canada (Human Resources and Skills Development), 2012 FC 1406. Although the OAS Act has been amended since that decision, it deals with a situation similar to this one. [41] In fact, the conclusions in this decision seem to align with Judge Barnes’ opinions in Larmet, but the latter failed to provide a definite answer to the issue. Instead, it overturned the disputed decision and ordered that the Office of the Commissioner of Review Tribunals (OCRT) retry the case. According to the Minister, the OCRT dismissed Mrs. Larmet’s appeal a second time, and that decision was final (GD4-1). [42] The Minister claims as well that the second OCRT decision is substantiated by the amendments that were made to the OAS Act in 2013 to allow for the cancelling of a pension. According to the Minister, that amendment supports its interpretation of the OAS Act, considered in its entirety. [43] To the extent that this decision may be different than the one in Larmet, the Tribunal is not bound by the OCRT’s decisions, especially a decision that was never communicated to the Tribunal. Furthermore, even if Judge Barnes’ grounds have a non-binding nature, the Tribunal determines that they are convincing, regardless of the amendment that was made to the Act in 2013. Finally, the Minister fails to mention any document or legislative fact that could establish that the objective of these amendments to the OAS Act corresponds to its claims regarding its interpretation. [44] Furthermore, Judge Barnes’ grounds also correspond to the reasoning that the Minister’s benefit agent formulated on page GD2-3: [Translation] “nothing specifies that Ms. cannot change her mind with respect to when she wants to begin her pension to a date other than the one that has been approved.” [45] Finally, as for the note entered on the bottom of question 10 on the application form (see para. 14 above), it has no relevance as long as it has no legislative basis. Nevertheless, it must be said that, in arriving at its conclusion, the Tribunal granted a lot of importance to the fact that the Appellant had requested the change to her application form by exercising her rights to appeal within the time allotted for the submission of a request for reconsideration of the Minister’s decision. This note could prove accurate for those who request a change to their application form after the end of this timeframe. In other words, this decision must not be read as indicating that a pensioner can request amendments to their pension at any given time. Conclusion [46] The Tribunal carefully reviewed the documents in the appeal file, as well as the relevant legislative provisions. The Tribunal concludes that the Appellant qualifies for retroactive payments as of June 2013, namely 11 months before the submission of her application for an OAS pension in May 2014. However, this decision has an effect on the monthly payments that the Appellant is currently receiving. Specifically, the rate of granted actuarial adjustment of 6% is cancelled. As a result, the Minister will calculate an adjustment. [47] The appeal is allowed in part.