Two-Year Financial Independence

Overview

To be eligible for income assistance, at least one applicant in the family unit must demonstrate that they have been financially independent for at least two consecutive years prior to applying for assistance.  The intent of this requirement is to:

  • encourage people to seek and maintain employment or to pursue education as a means to achieve financial independence
  • promote self-reliance and decrease the likelihood of dependence on income assistance

The two-year financial independence requirement does not apply to persons with disabilities under the Employment and Assistance for Persons with Disabilities Act.  

Policy

Effective: July 31, 2008

To be eligible for income assistance, at least one applicant in a family unit must demonstrate that he or she has been financially independent for at least two consecutive years prior to applying for assistance. 

If one person in the family unit meets this requirement or one of the exemptions, the entire family unit is considered eligible for assistance.

The two-year period of financial independence must be consecutive, but does not have to be the two consecutive years immediately prior to applying for assistance.  The two-year period does not have to be two calendar years; the two-year count can start when the applicant started working. 

Applicants are considered to have been financially independent if they meet at least one of the following criteria:
 

  • have worked for at least 840 hours in each of two consecutive years
  • have earned at least $7,000 in gross income in each of two consecutive years
  • have been employed for a portion of two consecutive years, and for the balance of the two years, either:
    • have served a waiting period for or received Employment Insurance (EI)
    • have received income from a private or public income replacement program (for example, Workers’ Compensation Board, Canada Pension Plan, Disability Insurance)

Unearned income, such as student loans, training allowances, or income assistance (from any jurisdiction), does not satisfy the requirement. 

Individuals have to meet the two-year financial independence requirement only once in their lifetime.  If recipients have met this requirement once, it is not applied again if they reapply for assistance in the future.  However, applicants previously exempted from meeting the two-year financial independence requirement must be reassessed upon reapplication to determine if they continue to meet the exemption criteria.

Applicants who supply false documents to satisfy the financial independence requirement and who do not otherwise meet this requirement will be denied further assistance.

Effective: January 22, 2007

In cases where all indications are that the applicant has been financially independent and meets the eligibility criteria, but has exhausted all avenues for direct or indirect verification (rent receipts, etc.), signed declarations from the applicant are acceptable.

To be a declaration, it is sufficient to have a signed and dated letter or note from the applicant to the ministry providing details of how the applicant meets the financial independence requirement.

Declarations must describe previous employment history, employment earnings, and employment duration, as well as details of attempts to obtain verification documents.  The original declaration must be placed on the physical file, and a copy must be provided for the applicant.

For the purposes of verifying two-year financial independence, signed declarations for earnings from illegal activities are not accepted.  However, other earnings not reported for income tax purposes may be accepted.

Applicants who declare income not reported for income tax purposes should be monitored to ensure the practice of not reporting earnings does not continue when requesting continued assistance.

Effective: July 31, 2008

Persons with disabilities are exempt from the two-year financial independence requirement.  In addition, if either an applicant or the spouse (if applicable) is in one of the following categories, the entire family unit is exempt from this requirement:
 

  • applicants under age 19
  • applicants who are pregnant, have dependent children, have a foster child, or have a child in the home of a relative (CIHR)
  • applicants who have or had a medical condition that either:
    • will prevent them from working for a total of at least 30 days from the date of application
    • prevented them from working for at least six months during the two years immediately prior to applying for assistance
  • applicants who were either:
    • supported by an employed spouse for at least two consecutive years
    • supported for part of the two years and, during the remainder of the two years, met the financial independence requirement (on a pro-rata basis) on their own
  • applicants who were incarcerated in a provincial or federal correctional institution for at least six months during the two years immediately prior to applying for assistance
  • regardless of the applicant’s current age, applicants who were in the care of the Ministry of Children and Family Development including those with youth agreements, when they turned 19 years of age (this includes persons in the care of the state in another province of Canada)
  • applicants who have, within the past six months, separated from an abusive spouse or fled an abusive relative with whom they resided, and as a result, their ability to work is impaired
  • applicants with a two-year diploma or certificate, bachelor’s degree, or higher from a post-secondary institution
  • applicants who have persistent multiple barriers to employment
  • applicants who reside with and care for a spouse who has a physical or mental condition that precludes them from leaving home for the purposes of employment
  • applicants who are providing full-time care for a non-dependent child under an agreement with the Ministry of Children and Family Development

The following categories are not exempt from this requirement:
 

  • applicants who are former CIHR clients
  • applicants who were supported by the Ministry of Children and Family Development  under the terms of a youth agreement with their care providers, where the youth agreement ended before they turned 19 years of age

Effective: December 1, 2009

A supervisor may use discretion to authorize the issuance of assistance in cases where, due to circumstances beyond an applicant’s control:
 

  • the applicant has been prevented from searching for, accepting or continuing employment and could not have achieved two consecutive years of financial independence prior to applying for income assistance, and
  • the family unit would otherwise experience undue hardship if eligibility were denied. 

Factors beyond an applicant’s control could include the following examples:
 

  • long term incapacitating physical, social or mental health problems, such that two consecutive years of financial independence would not have been possible
  • long term dependency upon government assistance, such that two consecutive years of financial independence would not have been possible
  • chronic medical problems or addictions, which prevent two consecutive years of financial independence
  • extended periods of caring for dependent or disabled family members such that two consecutive years of financial independence would not have been possible
  • previously restricted to living in a community, or country, where the economic and/or social conditions prohibited or precluded the possibility of two consecutive years of financial independence

AND

Possibility of undue hardship:
 

  • The family unit will be unable to secure basic food, shelter and/or required medical attention if denied income assistance.

Reapplication
 

  • Applicants previously granted assistance as a result of discretion provided in policy must again meet the two-year financial independence requirement upon application.

Procedures

Effective: December 1, 2008

The following are examples of documents that may be used to verify financial independence:
 

  • T4 slips or Canada Revenue Agency, Notice of Assessment for the required time period
  • Pay records or letter from employer(s) verifying employment income and period of employment
  • Records of Employment
  • Canada Pension Plan (CPP) Statement of Contributions

Note:  Obtaining a CPP Statement of Contributions from the Employment and Social Development Canada (ESDC) may take 2-3 weeks.  During Stage 1 of the application process, ministry staff advises the applicant of the documentation requirements and if necessary, the applicant requests their CPP Statement of Contributions.  [see Additional Resources]

Ministry staff on behalf of the applicant (with written or verbal consent) may contact ESDC online to request a CPP Statement of Contributions to be mailed to the applicant. [see Contacts]

Examples of Documents or Evidence

While not exhaustive, the following table lists examples of documents or evidence that may be used to confirm circumstances under which an applicant is exempt from the two-year financial independence requirement.

Table: Verification of Exemptions

Exemption

Examples of Documents or Evidence

Medical conditions, including pregnancy

Note or letter from, or a telephone conversation with, a medical practitioner or nurse practitioner confirming the medical condition and duration

Homemaker supported by spouse for at least two years or a portion thereof

Income tax statements, tenancy documents, shared mortgage/rental agreements

Incarcerated for at least six months during the two years immediately prior to application

Documents or letters from the corrections institution, or a telephone conversation with the institution, confirming the period of incarceration

In the care of, or had a youth agreement with, the Ministry of Children and Family Development upon turning 19 years of age

E-mail or letter from the social worker, or a telephone conversation with an official of the relevant organization, confirming eligibility

Separated from an abusive spouse or fleeing from abuse

Applicant states they are fleeing abuse from a spouse or relative

Granted a post-secondary certificate, diploma, or degree

Certified copy of the educational credential (diploma, degree, certificate)

Effective: November 24, 2014

Marital / Spousal Breakdown – When files are split because of marital or spousal breakdown, neither individual has to reapply or meet the financial independence requirement unless there is at least a two-month interruption in assistance. 

Applicant Supplies False Information – Applicants who supply false documents to satisfy the financial independence requirement and who do not otherwise meet this requirement should be denied further assistance.  To address the issue of past overpayment to the applicant, a referral to Prevention and Loss Management Services should be recorded by staff on an Allegation Fraud Incident. 

Effective: January 18, 2006

Procedures for the application of discretion

If the applicant (and the applicant spouse, if applicable) is not eligible under the two year financial independence criteria and does not belong to one of the exempt categories, determine whether the client’s circumstances warrant the use of discretion to issue assistance.

If it appears that the applicant (or applicant’s spouse, if applicable) could not have achieved two years of financial independence due to factors beyond his/her control and undue hardship would result if the client was denied, the Supervisor may authorize the issuance of assistance.

Workers must note the factors considered in the exercise of discretion and the circumstances of undue hardship on the case. These are to include, or be followed by, an entry indicating the Supervisor’s approval before assistance is issued.

Effective: December 1, 2008

To determine whether an applicant meets the requirement for two years of financial independence, complete the following procedure.  If it is unclear if the applicant meets the requirement a case should be opened pending verification.  If during the application it is determined that the applicant does not meet the requirement or the exemption, then they are not eligible and the case is closed. Applicant must be provided information on the reconsideration process.
 

  1. Determine if the applicant (or spouse, if applicable) is exempt from this requirement.  [see Policy – Exemptions]
  2. If the applicant is exempt, proceed with assessing eligibility.  If not, determine if the applicant meets the criteria of being financially independent.
  3.  If the applicant has been financially independent, determine if the applicant has documentation proving financial independence.  If so, verify that the documentation is acceptable.  If not, request further verification or consider a signed declaration in the absence of verification.  [see Procedure – Signed Declaration in the Absence of Verification]
  4. If necessary, verify the applicant’s financial independence.
  5. Complete the questions on the Two-Year Independence Assessment (HR3267) [see Forms and Letters]
  6. Note the results and scan and profile the form to the case.

Example of when two-year financial independence requirement is met:

James is a 21-year-old single man who has never been on assistance before.  In 2000, he worked more than 840 hours and earned more than $7,000.  In 1999, he worked for $7.15 per hour while he was in school and earned $6,616.45. 

James meets the financial independence requirement because he worked over 840 hours in each of two consecutive years.  To calculate the number of hours he worked in 1999, his gross income of $6,616.45 is divided by his hourly wage of $7.15, which works out to just over 925 hours.

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