POSSESSION
It should be noted that the Act respecting income support, employment assistance and social solidarity uses the expression "property owned by the independent adult or the members of a family".
The notion of possession used in the expression “assets that the single adult or the members of the family possess” to a broader sense than one of ownership.
The concept of possession has a broader sense than that of ownership. Possession of a property within the meaning of the Act supposes that the person has all the rights of ownership, including the right to dispose of it such as for example selling or renting. For this reason, property owned under an INSTALLMENT SALES CONTRACT is taken into consideration since the buyer may dispose of it and terminate his or her liability for payment to the vendor.
However, when recipients who have possession of property do not have all the rights of ownership and for this reason cannot sell it, they are regarded as holders and the value of the property cannot be included for benefit calculation purposes (for example, leasing of a vehicle).
However, a recipient may be regarded as having possession of property acquired through theft and that this should be taken into account under the general rules in the calculation of the benefit.
Co-ownership of property with an adult who is eligible for the 66/72 benefit
When an adult client of the Income Security Program co-owns a liquid asset with a spouse who is eligible for the 66/72 benefit, only the value of his or her part will be taken into account in calculating the benefit.
This is assumed to be 50% unless otherwise specified.
AGGREGATE VALUE
The global value of the assets includes the value of all assets that are not excluded for the purposes of calculating the benefit.
The calculation of the GLOBAL VALUE of the assets requires determining their MARKET VALUE while for some assets, it is necessary to determine the NET VALUE.
If the value of an asset is excluded in part only for the purposes of the calculation, the surplus of this value is included in the global value.
An amount that is equivalent to 2% of the GLOBAL SURPLUS VALUE of the assets is subtracted from the benefit.
For benefit calculation purposes, the AGGREGATE VALUE of property comprises the value of all property possessed except:
- Liquid assets;
- Property excluded in total;
- Property that is part of the $153 000 overall exclusion;
- Partial exclusion of a motor vehicle up to $10,000;
- Goods excluded due to legal impediment;
- Possessions as well as liquid and capital assets up to a limit of $219 000 for clients with a severe employment-related constraint. Furthermore, the exclusion also covers the real estate that a client possesses or receives following an inheritance, provided that it was received while they were income security clients.
A person who surrendered his or her property under the Bankruptcy and Insolvency Act is also considered as not possessing that property any longer.
The document attesting this surrender and the date thereof is named “Notice of bankruptcy and of impending automatic discharge of first-time bankrupt, and request of a first meeting of creditors”.
If only part of the value of the property is excluded, the remainder of the value of the property is included in the aggregate value.
MARKET VALUE
- Value of an immovable:
The value of any immovable entered on the ASSESSMENT ROLL of an Housing Officer is equal to the value that is indicated there.
Recipients apply to the Bureau de révision de l'évaluation foncière if they wish to CONTEST the VALUE assigned to their immovable by the municipality. When the decision rendered has the effect of decreasing the value of the property, the ASSISTANCE granted is ADJUSTED retroactively to the effective date of the new assessment.
However, if it has the effect of increasing the value, the change is made beginning in the month following the date of the decision.
- Value of a movable:
The value of a property is its MARKET VALUE.
The market value of a property is what a vendor who does not have to sell, but wants to sell the property could get from a buyer who does not have to buy, but wants to buy it.
NET VALUE
The NET VALUE of property is equal to its value less the value of the real rights with which it is charged.
REAL RIGHTS
- Immovables:
REAL RIGHTS pertaining to immovables are registered in the registry office of the registry division in which the immovables are located; the most common form of such rights is a HYPOTHEC.
The value of the hypothecs on a principal residence are subtracted from its value on the assessment roll in order to determine the net value of the immovable; EVEN IF the hypothec was NOT USED to purchase, build or repair the residence. (For example, a hypothec taken to guarantee a personal debt, even a third-party debt, is taken into consideration in assessing the net value of the residence).
Furthermore, section 1119 of the Civil Code of Quebec stipulates that the USUFRUCT, USE, SERVITUDE and EMPHYTEUSIS are real rights. The value of these rights is very difficult to determine, it is however recognized that they considerably reduce the value of the property. For that reason, we consider that the net value of an immoveable affected by such a right is equal to $1.
- Movables:
In the case of MOVABLES, the real right is the MOVABLE HYPOTHEC.
DEBT
A debt for which the recipient may obtain immediate repayment is considered a liquid asset (see section 3.3.1)
A debt for which repayment cannot be immediately obtained is property. The market value depends on its nature:
- unsecured debt: value considered to be nil as long as the debt is not due or payable;
- secured debt: nominal value.
Most SECURED DEBTS are secured by an immovable hypothec. In order to determine the validity of the security, the rank of the hypothec, the equity in the property, the term, the interest rate and so on will be assessed. Other types of security, such as a business or a term deposit, may also be considered. A debt on which the debtor makes regular payments is also considered to be secured.
The market value of a debt against which a debtor regularly makes payments is also considered for the purpose of calculating assistance.
TYPES OF HYPOTHECS
A HYPOTHEC is a real right to an immovable that serves to guarantee a liability.
A CONVENTIONAL hypothec, which is the most common kind, is the result of a voluntarily agreed-to hypothec deed. For the monthly payments to be included in calculating housing costs, the hypothec must be for the purchase, construction or repair of a principal residence.
A LEGAL hypothec may result from a judicial act or decision. The monthly payments are included in calculating housing costs if the act that created the hypothec is for a loan for the purchase, construction or repair of a principal residence. It should be noted that only in very rare instances does a legal hypothec cover this kind of loan. Consequently, as a general rule, legal hypothecs do not affect housing costs.
The Framework Policy treats a simple loan intended for the purchase, setting up or repair of a MOBILE HOME that serves as a principal residence as a hypothec. For the monthly payments on this loan to be included in housing costs, the mobile home must be the recipient’s only place of residence and the recipient must have the intention to reside there indefinitely. Furthermore, the concept of residence implies a certain attachment to the ground, regardless of whether the mobile home is on wheels or has been placed on concrete blocks.
PAWNING
The PAWN of a thing is a contract under which a debtor gives his or her creditor a movable as a deposit to ensure payment of a debt. The debtor is still the owner of the thing; the creditor holds it only as a deposit to ensure payment of the debt.
PLEDGE
In the case of a commercial PLEDGE, the property provided as security for a loan is still owned by and in the possession of the merchant unless there is default on their part to fulfil their obligations.
RECOGNITION OF A PRÊTE-NOM
Despite appearances provided by documents such as an act of property, a contract of acquisition, a registration certitude, etc., the Income Security recognizes that in the context of last resort assistance, it is sometimes required to determine who is the real owner of a property or liquid assets and that the existence of a prête-nom must therefore be recognized.
The Band Council can demonstrate that a person has served as a prête-nom for a beneficiary, or a person can prove that they served as a prête-nom for another, when:
- The circumstances surrounding this decision are credible;
- The facts are coherent;
- The facts are demonstrated.
The beneficiary is required to rectify the facts as soon as possible when they have:
- Acted as a prête-nom;
- Used a prête-nom illegally.
However, when the prête-nom is recognized and the person has acted accordingly with the intention of concealing information from the Band Council while failing to take immediate action to rectify the facts, the Band Council must consider, for the future, the liquid assets or properties in the calculation of the benefit.