APPEAL NUMBER 2020-00075 PART C – DECISION UNDER APPEAL The decision under appeal is the Ministry of Social Development and Poverty Reduction (“the ministry”) reconsideration decision dated March 6, 2020 in which the ministry found that the appellant had an overpayment of income assistance (“IA”) between December 2018 and June 2019 because she had earned income (from employment) that was higher than her rate of assistance and should have been deducted from her IA. The ministry applied sections 1, 10 and 28, and Schedules A and B of the Employment and Assistance Regulation (“EAR”) that was in force in 2018-2019 to determine the appellant had an overpayment. The ministry further found that the appellant is required to repay $3,429.39 IA that she was not eligible to receive. The ministry found that the appellant has to repay the government pursuant to sections 27 and 28 of the Employment and Assistance Act (“EAA”). PART D – RELEVANT LEGISLATION Employment and Assistance Act - EAA - sections 27, and 28 Employment and Assistance Regulation - EAR - sections 1, 10, 28, and 33, and Schedules A and B
APPEAL NUMBER 2020-00075 PART E – SUMMARY OF FACTS The evidence and documentation before the minister at the reconsideration consisted of: 1. Information from the ministry’s reconsideration decision indicating that on February 7, 2020, the appellant was advised of an overpayment of $3,958.98 and the requirement to repay that amount. On February 21, 2020, the appellant submitted a Request for Reconsideration (“RFR”). On March 6, 2020, the ministry completed the review of the RFR. The ministry record includes the following background information: The appellant is a sole recipient of disability assistance (“DA”). The appellant’s file has been open since October 12, 2017 and she qualified as a Person with persistent multiple barriers to employment (“PPMB”) effective March 1, 2019. On June 14, 2019, the ministry approved the appellant’s Persons with disabilities (“PWD”) designation, effective July 1, 2019. On February 7, 2020, the ministry completed a compliance review of the file and determined the appellant received $3,958.98 for IA between December 2018 and June 2019 that she was not eligible to receive. The ministry says that the overpayment occurred because the appellant did not report her employment earnings. On February 21, 2020, the appellant confirmed that she had net earnings of $4043.87 in 2018, and $5,824.61 in 2019. The appellant explained that she had difficulty finding employment; that both her PPMB and PWD applications were delayed; and that she “googled online” for information on the “annual earnings exemption.” The appellant explained that she did not report her income because it was below what she believed to be the annual exemption amount. The ministry revised the overpayment amount based on the appellant’s PPMB status for the March to June 2019 assistance months. The ministry allowed a $700 per month earnings exemption while the appellant was receiving the PPMB rate for IA. The ministry explains that for the earlier months (December 2018 to February 2019) the earnings exemption was $400 per month as the appellant was receiving regular IA for that period. Based on the higher monthly exemption for PPMB, the ministry reduced the amount of the overpayment from $3,958.98 to $3,429.39. On reconsideration, the ministry determined the appellant had an overpayment of $3,429.39 and the appellant is liable to repay that amount. The ministry provides a chart in the reconsideration decision that summarizes the appellant’s monthly net earnings from October 2018 to April 2019; the allowable earnings exemption, the amount of IA received, the IA entitlement for each month, and the amount the appellant was overpaid. The ministry states that the decision to apply a sanction to reduce the appellant’s DA by $25 per month is addressed in a separate reconsideration decision. The ministry explains that if the appellant is disputing the date she became eligible for PWD designation, this would need to be assessed separately by ministry staff. The ministry notes that this reconsideration decision is about whether the appellant received an overpayment for IA between December 2018 and June 2019. In section 2 - Decision to be Reconsidered, the ministry notes the following: - On January 14, 2020, the ministry contacted the appellant to discuss an Employment Insurance (“EI”) claim. The appellant confirmed that she was employed from October 17, 2018 to April 17, 2019. - On January 15, 2020, the appellant submitted Records of Employment and copies of pay stubs to confirm her earned income. The ministry notes that during the period October 17, 2018 to April 17, 2019, the appellant was eligible for IA and her “monthly net earning exception” was $400 per month. The ministry reports that no income was declared during this period. - On January 22, 2020, the ministry sent the appellant a letter advising of a potential overpayment of IA due to employment income.
APPEAL NUMBER 2020-00075 - On January 29, 2020, the appellant submitted an explanation and documents pertaining to her PPMB application as reasons she believes there should not be an overpayment. - On February 7, 2020, the ministry sent the appellant a decision letter (with Overpayment Chart and supporting evidence) confirming the overpayment. - On February 7, 2020, the ministry phoned the appellant to inform her that the overpayment decision had been mailed. The appellant verbally requested a reconsideration of the decision to apply an overpayment of $3,958.98. 2. The RFR, signed by the appellant on February 21, 2020, with the following attachments: A letter to the ministry dated January 14, 2020 in which the appellant provides the following information: - The appellant’s net pay in 2018 was $4,043.87 (gross $4,294.41) and her net pay in 2019 was $5,824.61 (gross $6,184.47). - The appellant states that she was on IA in 2018 and the “annual earnings exemption on qualified income” is $4,800. The appellant says she had PWD designation in 2019 and the “annual earnings exemption on qualified income” is $12,000. - The ministry denied the appellant’s PPMB application twice in 2019 (despite her medical conditions and supporting medical reports). The appellant states that she was finally approved for PWD on June 14, 2019, but she should have been on PWD from the beginning of 2019. - On March 27, 2019, the appellant was injured at work and left her employment. A letter to the ministry dated January 28, 2020 in which the appellant provides additional information: - The appellant started working in mid-October 2018, with a low hourly rate of pay and uncertain weekly work hours to be randomly assigned by the employer. Prior to October 2018, the appellant struggled to find a job despite her best efforts. - The appellant says she made sure that her employment income did not exceed the “allowable exemption limits of $4,800 per year for IA and $12,000 per year for PWD.” The appellant states that she “did not indicate the earned amount in monthly reports because the yearly earnings report can show clearly how much I make from the workplace with all actual figures.” The appellant states that she thought the ministry’s system would correctly accumulate her work hours from one month to the next (for an annual total). The appellant also “googled online” the exemption amounts for IA / PWD (which she believed were $4,800 and $12,000 respectively). - No hours were guaranteed by the appellant’s employer when she could only choose to work part-time. - The appellant indicates that she also gave the ministry copies of medical reports for her PPMB application; copies of ministry letters in 2018-2019; and an “overpayment chart analysis” with handwritten amounts on a copy of the ministry Overpayment Chart: “$4,043.87 (2018)” and $5,824.61 (2019).” 3. A letter from the ministry to the appellant dated February 7, 2020, advising of an overpayment of $3,958.98 for assistance the appellant was not eligible for. The letter states that the appellant failed to accurately declare her employment income from October 17, 2018 to April 17, 2019. During this period the appellant received $9,868.48 net earnings and declared $0.00. The letter explains that the undeclared income resulted in an overpayment of $3,958.98. The letter states that the ministry received no additional information regarding the overpayment in response to an earlier letter dated January 22, 2020. The letter further states that the appellant must repay funds that she was not eligible to receive as set out in the legislation. 4. A letter from the ministry to the appellant dated January 22, 2020 (with attached Overpayment Chart), stating that the ministry reviewed the appellant’s file to ensure she was receiving the correct amount of assistance. Upon review, the ministry identified a potential overpayment of $3,958.58 for seven assistance months. The appellant was employed from October 17, 2018 to April 17, 2019. The case status was “employable” and no income was declared.
APPEAL NUMBER 2020-00075 The letter invites the appellant to submit any additional information related to the potential overpayment. The letter advises that if the overpayment is confirmed, the debt will be added to the appellant’s file and deductions will be made from her assistance until the debt is repaid. The letter reminds the appellant of the requirement “to accurately and completely report your income, assets, and circumstances, including any changes, when you apply for assistance and on the monthly report form (‘stub”).” 5. An Overpayment Notification dated February 21, 2020 with the appellant’s acknowledgment of receipt, setting out an overpayment of $3,958.98 due to the appellant receiving assistance she was not eligible for. The notice explains that the overpayment is a debt due to the government which the appellant is liable to repay, and the ministry will deduct $10 per calendar month from the appellant’s assistance to repay the debt. 6. The appellant’s Earnings Statements from October 26, 2018 to April 26, 2019 showing the appellant’s employment income for two or three paydays per month. The appellant’s net pay for the following months was: 2019 April: $629.59 ($60.80 on April 26, 2019 + $568.79 on April 12, 2019) March: $2,165.19 ($876.47 on March 29 + $767.66 on March 15 + $521.06 on March 1) February: $1,143.55 ($318.02 on February 15 + $825.53 on February 1) January: $1,886.28 ($829.98 on January 18 + $1,056.30 on January 4) 2018 December: $2,156.48 ($1,002.58 on December 21 + $1,153.90 on December 7) November: $1,800.49 ($1,115.54 on November 23 + $684.95 on November 9) October: $86.90 (on October 26) 7. Documents for the appellant’s PPMB application including a Medical Report; ministry letters and Decision Summary dated January 29, 2019, and February 27, 2019 (rejecting the application); and a letter from June 14, 2019, approving PWD designation effective July 1, 2019. Additional information Subsequent to the reconsideration decision neither party submitted any new evidence requiring an admissibility determination in accordance with section 22(4) of the EAA. On March 12, 2020, the appellant filed a Notice of Appeal with a hand-written statement and typed submission which the panel accepts as argument. Both parties presented argument at the hearing. Procedural matters The ministry attended the hearing with an observer. The appellant consented to the observer listening in at the teleconference.
APPEAL NUMBER 2020-00075 PART F – REASONS FOR PANEL DECISION The issue in this appeal is whether the ministry reasonably determined the appellant had an overpayment of IA between December 2018 and June 2019 because she had earned income (from employment) that was higher than her rate of assistance and should have been deducted from her IA. Did the ministry reasonably apply sections 1, 10, and 28, and Schedules A and B of the EAR that was in force in 2018-2019 to determine the appellant had an overpayment? In addition, was the ministry’s finding that the appellant is required to repay $3,429.39 IA reasonably supported by the legislation, specifically sections 27 and 28 of the EAA? The ministry based the reconsideration decision on the following legislation: EAA Overpayments 27 (1) If income assistance, hardship assistance or a supplement is provided to or for a family unit that is not eligible for it, recipients who are members of the family unit during the period for which the overpayment is provided are liable to repay to the government the amount or value of the overpayment provided for that period. (2) The minister's decision about the amount a person is liable to repay under subsection (1) is not appealable under section 17 Liability for and recovery of debts under Act 28 (1) An amount that a person is liable to repay under this Act is a debt due to the government that may be (a) recovered in a court that has jurisdiction, or (b) deducted, in accordance with the regulations, from any subsequent disability assistance, hardship assistance or supplement for which the person's family unit is eligible or from an amount payable to the person by the government under a prescribed enactment. (2) Subject to the regulations, the minister may enter into an agreement, or accept any right assigned, for the repayment of an amount referred to in subsection (1). EAR Definitions 1(1) In this regulation: "earned income" means (a) any money or value received in exchange for work or provision of a service,
APPEAL NUMBER 2020-00075 Limits on income 10(1) For the purposes of the Act and this regulation, "income", in relation to a family unit, includes an amount garnished, attached, seized, deducted or set off from the income of an applicant, a recipient or a dependant. (2) A family unit is not eligible for income assistance if the net income of the family unit determined under Schedule B equals or exceeds the amount of income assistance determined under Schedule A for a family unit matching that family unit. Amount of income assistance 28 Income assistance may be provided to or for a family unit, for a calendar month, in an amount that is not more than (a) the amount determined under Schedule A, minus (b) the family unit's net income determined under Schedule B. Monthly reporting requirement 33 (1) For the purposes of section 11 (1) (a) [reporting obligations] of the Act, (a) the report must be submitted by the 5th day of each calendar month, and (b) the information required is all of the following, as requested in the monthly report form prescribed under the Forms Regulation, B.C. Reg. 95/2012:… (iii) all income received by the family unit and the source of that income; (iv) the employment and educational circumstances of recipients in the family unit; Schedule A Income Assistance Rates (section 28 (a) ) Maximum amount of income assistance before deduction of net income 1 (1) Subject to this section and sections 3 and 6 to 10 of this Schedule, the amount of income assistance referred to in section 28 (a) [amount of income assistance] of this regulation is the sum of (a) the monthly support allowance under section 2 of this Schedule for a family unit matching the family unit of the applicant or recipient, plus (b) the shelter allowance calculated under sections 4 and 5 of this Schedule.
APPEAL NUMBER 2020-00075 Monthly support allowance 2 (1) A monthly support allowance for the purpose of section 1 (a) is the sum of (a) the amount set out in Column 3 of the following table for a family unit described in Column 1 of an applicant or a recipient described in Column 2, Age or status of applicant or Amount of Item Family unit composition recipient support $335.00 Sole applicant/recipient and no dependent Applicant/recipient is under 65 years 1 (before April 2019) children of age $385 (after April 2019) Applicant/recipient is under 65 years $382.92 (before Sole applicant/recipient and no dependent of age and is a person who has 2 April 2019) children persistent multiple barriers to $432.92.(after April employment 2019) Monthly shelter allowance 4 (2) The monthly shelter allowance for a family unit to which section 15(2) of the Act does not apply is the smaller of (a) the family unit's actual shelter costs, and (b) the maximum set out in the following table for the applicable family size: Item Family Unit Size Maximum Monthly Shelter 1 1 person $375 Schedule B Net Income Calculation (section 28 (b) ) Deduction and exemption rules Exemption - earned income 3 (1) Subject to subsection (2), the amount of earned income calculated under subsection (6) is exempt for a family unit:
APPEAL NUMBER 2020-00075 (6) The exempt amount for a family is the lesser of the family unit’s total earned income in the calendar month of calculation and the following: (a) $400 if the family unit is not described in paragraph (b), (c), or (d); (d) $700, if the family unit includes a person who has persistent multiple barriers to employment. *** Analysis Overpayment (between December 2018 and June 2019) Arguments Appellant In her submissions for the appeal and reconsideration, the appellant maintains she did not receive an overpayment of IA because her net employment earnings in 2018 and 2019 do not exceed her “eligible annual exempt amount.” The appellant argues that before her status was changed to PWD, she had an annual exemption of $4,800 for employment income ($400 per month x 12 months). The appellant argues that her eligible annual exemption increased to $12,000 in 2019 based on her PWD designation. The appellant argues that her “limited low income” has to be calculated over a year and not by the month because she was not guaranteed pay every month due to uncertain work hours (“randomly arranged” by the manager) and she also faced barriers in finding a job due to her disability. The appellant asks, “how could people like me get paid on time with the guaranteed basic amount if I have the chance to work more hours for some months but work less hours or no hours at all for other months within one year?” The appellant maintains she was “not trying to hide anything”; she calculated her work hours and amount of earnings very carefully so that she would not exceed the amount “that can be exempted within one year which is $4,800 and $12,000.” The appellant explained that she thought the ministry’s web system would correctly accumulate her work hours from each month to come up with her annual earnings and confirm that her earnings were below the “annual exemption limits.” When asked which website she accessed to get information about an “annual exemption”, the appellant explained that she entered the search words “social assistance” into google.com. The appellant argues that she is vulnerable because of her low income and social and medical barriers and the ministry has to consider this. The appellant expressed frustration with the ministry process including the delays and “rejections for no reason” she encountered in having her PPMB and PWD applications finally approved. At the hearing, the appellant noted that income tax is filed yearly, not monthly. The appellant explained that she did not report her income on the monthly reports because at the end of the year the ministry would know how much employment income she had based on her tax returns which are shared with the ministry. The appellant notes that she also declared income when filing for EI. The appellant argues that the ministry “should be working together with these other organizations to help low income people have a better lifestyle.” The appellant argues that the ministry “needs to improve their calculations and understand the humanitarian side.” The appellant indicates that she found it confusing that the ministry initially set the overpayment at $3,958.98 then changed it to $3,429.39 based on her PPMB status.
APPEAL NUMBER 2020-00075 Ministry The ministry’s position is that the appellant had an overpayment of assistance of $3,429.39 for assistance months January to May 2019 because she did not report employment income received between October 2018 and April 2019. The ministry argues that the appellant received IA she was not eligible for. The ministry argues the appellant was not eligible for any IA for assistance months January, February, March, and May 2019 in accordance with section 10(2) of the EAR. The ministry found that for those assistance months, the appellant’s net income (received in November and December 2018, and January and March 2019) was higher than the rate of assistance for the appellant’s family unit size. The ministry argues the appellant was not eligible for the full IA rate for April 2019 because her net income of $364.37 received in February 2019 should have been deducted from her assistance rate in accordance with section 28 of the EAR. The ministry found that the appellant’s employment income meets the definition of earned income under section 1(1) of the EAR. Regarding exemptions from earned income, the ministry argues the appellant did not qualify for an “annual exemption” until July 1, 2019 when her PWD designation was effective. At the hearing, the ministry explained that the ministry has two distinct programs for assistance, “IA versus PWD with different rules and regulations for each.” In response to a question from the panel, the ministry explained that the annual earnings exemption of $12,000 for PWD clients would not apply to the appellant until July 1, 2019 (the effective date of her PWD designation). The ministry explained that the PWD exemption would be pro-rated based on the months the appellant was eligible for DA (July 2019 forward). The ministry emphasized that there is no “annual earnings exemption” under the EAR for IA/ PPMB recipients. The ministry explained that under section 3 of Schedule B, the first $400 of employment earnings was exempt for each month that the appellant was receiving regular IA. Similarly, the first $700 of earnings was exempt for each month that the appellant qualified for the PPMB rate of IA. The ministry emphasized that these exemptions are for “each and every month, it is not by the year.” The ministry explained that IA recipients have the obligation to report all income on a monthly basis on the stubs that they submit to the ministry. The ministry acknowledges that the appellant filed monthly reports, and supplied all of her income information once the ministry compliance specialist asked for it. However, when the appellant filled out the monthly reports, she indicated $0.00 for employment income. The ministry explained that the monthly reports are a legal document that give the client different options (boxes to fill in) to report various types of income or changes in their employment status. Regarding information sharing between the ministry and the federal government; i.e., income tax returns or EI benefits, the ministry explained that it only receives data from the Canada Revenue Agency every six months but the ministry needs to know the client’s earnings on a monthly basis in order to calculate the correct amount of assistance under the IA legislation. The ministry argues that “it is not a true reflection of the person’s circumstances” when “they put down all zeros on the stub but have income from work.” The ministry insists that it complied with the legislation in finding that the appellant has an overpayment. Panel’s decision re: overpayment The panel finds that the ministry was reasonable to find that the appellant had an overpayment of $3,429.39 IA between December 2018 and June 2019. The appellant acknowledges she was working during this period and despite variable work hours, the appellant received employment earnings each month between October 2018 and April 2019 as evidenced by her bi-monthly pay stubs. The appellant does not dispute that her employment income meets the definition of earned income in subsection 1(1)(a) of the EAR.
It is unfortunate that the appellant thought there was an “annual exemption” for employment income for IA/ PPMB recipients and reported $0.00 on her monthly reports because she expected the ministry to calculate her annual earnings and deduct that amount from an “annual exemption limit” of $4,800 for regular IA or $12,000 for PWD recipients. The ministry explained that there is no annual exemption for IA/ PPMB recipients under the legislation and the panel finds that the ministry’s interpretation of the legislation is reasonable. Specifically, section 3(6) of Schedule B of the EAR clearly sets out that the earnings exemption of $400 per month for IA and $700 per month for PPMB is based on the family unit's total earned income in the calendar month of calculation [bold text added by panel]. The appellant does not dispute that she received regular IA benefits for the December 2018 and January and February 2019 assistance months; and the PPMB rate for the March to June 2019 assistance months. The panel therefore finds that the ministry reasonably applied the legislation to find that the appellant was not entitled to an annual exemption for earnings before she was designated as a PWD effective July 1, 2019. The appellant has a monthly reporting obligation under section 33(1) of the EAR to report “all income received by the family unit and the source of that income” as well as her employment circumstances by the 5th day of each calendar month. By failing to report her employment income to the ministry on a monthly basis, the ministry did not have the information it needed to issue the correct amount of IA. The ministry chart, prepared for the reconsideration, confirms that the appellant received IA that she was not entitled to. Under section 10(2) of the EAR, the appellant is not eligible for IA if her net income equals or exceeds the amount of IA for her family unit size (sole recipient). However, the ministry chart shows that the appellant received between $710 and $807.92 IA/ PPMB benefits from January to March 2019 and in May 2019, even though her entitlement was $0.00 due to employment earnings that were higher than her assistance rates for that time period. The chart further shows that In April 2019, the appellant received the full PPMB rate of $807.92 when she was only entitled to $364.37. The chart shows that the appellant had net employment income of $443.55 that should have been deducted from her IA rate pursuant to section 28 of the EAR. The panel notes the ministry states in the reconsideration decision that the appellant’s “net income of $364.37 in February of 2019 should have been deducted from the appellant’s assistance…”, but the net income for February 2019 was actually $443.55 as shown in the ministry chart [reproduced below] and the amount of assistance the appellant was eligible for was $364.37. However, this does not affect the overpayment which is $3,429.39 Income Amount of Assistance Earnings Received employment Month Exemption Income earnings affected Oct 2018 $86.90 Dec 2018 $400.00 Nov 2018 $1800.49 Jan 2019 $400.00 $1400.49 Dec 2018 $2156.48 Feb 2019 $400.00 $1756.48 Jan 2019 $1886.28 Mar 2019 $700.00 $1186.28 Feb 2019 $1143.55 Apr 2019 $700.00 $443.55 Mar 2019 $2165.19 May 2019 $700.00 $1465.19 Apr 2019 $629.59 Jun 2019 $700.00 APPEAL NUMBER 2020-00075 Amount of Net Amount of assistance Amount of assistance you were Overpayment you eligible to received receive $0.00 $745.00 $745.00 $0.00 $710.00 $0.00 $710.00 $710.00 $0.00 $710.00 $757.92 $0.00 $757.92 $807.92 $364.37 $443.55 $807.92 $0.00 $807.92 $0.00 $807.92 $807.92 $0.00 TOTAL = $3429.39
APPEAL NUMBER 2020-00075 Repayment requirement Arguments The appellant argues she should not have to repay $3,429.39 to the ministry because her earnings did not exceed the “annual exemption” of $4,800; and a $400 per month earnings exemption “is very limited for a low income person and the job opportunity and work hours are not stable.” The ministry argues that the appellant has to repay the ministry under section 27 of the EAA because she received IA that she was not eligible for. The ministry notes that it may deduct the debt from the client’s assistance payments pursuant to section 28 of the EAA. Panel’s decision re: repayment The panel finds that the ministry was reasonable to conclude that the appellant is liable to repay the overpayment amount ($3,429.39). Section 27(1) of the EAA clearly sets out that the recipient is liable to repay the overpayment if they receive assistance that they are not eligible for. Section 28(1) of the Act states that an overpayment is “a debt due to the government” and the ministry may deduct the amount owing from subsequent assistance payments. The ministry has no discretion under the legislation to waive the debt. The Overpayment Notification which the appellant signed on February 21, 2020 (acknowledging receipt) states that the ministry will deduct $10 per calendar month from the appellant’s assistance towards repayment of the debt and the terms of repayment are subject to periodic review and revision at the sole discretion of the minister. Conclusion The panel concludes that the ministry was reasonable to find that the appellant had an overpayment of $3,429.39 between December 2018 and June 2019 and that the appellant is liable to repay $3,429.39 as a debt owed to the government for IA that she was not eligible for. The panel finds that the ministry’s decision is reasonably supported by the evidence and is a reasonable application of the legislation. The appellant received IA that she was not eligible for and the ministry has no discretion to waive the repayment obligation. The panel confirms the reconsideration decision. The appellant is not successful on appeal.
Appeal No. 2020-00075 PART G – ORDER THE PANEL DECISION IS: (Check one) UNANIMOUS BY MAJORITY THE PANEL CONFIRMS THE MINISTRY DECISION RESCINDS THE MINISTRY DECISION If the ministry decision is rescinded, is the panel decision referred back to the Minister for a decision as to amount? Yes No LEGISLATIVE AUTHORITY FOR THE DECISION: Employment and Assistance Act Section 24(1)(a) or Section 24(1)(b) and Section 24(2)(a) or Section 24(2)(b) PART H – SIGNATURES PRINT NAME Margaret Koren SIGNATURE OF CHAIR DATE (YEAR/MONTH/DAY) 2020-04-08 PRINT NAME Connie Simonsen SIGNATURE OF MEMBER DATE (YEAR/MONTH/DAY) 2020-04-08 PRINT NAME Adam Shee SIGNATURE OF MEMBER DATE (YEAR/MONTH/DAY) 2020-04-08
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