Clients presenting a severe employment-related constraint benefit from a global exclusion of $269 092 ncreased by $1000 per year of building occupation as an owner, for all of the following possessions and liquid assets:
- Liquid assets composed of capital assets or amounts targeted by section 3.3.7, namely RESP, RRSP and CDI;
- The possessions that are listed further on, namely the residence or the capital stemming from selling it and indemnities received as compensation for a disaster (also refer to 3.3.11);
- Any other real property;
- The possessions and liquid assets received by the actual adult or a member of the family following an inheritance.
- The benefits of a life insurance policy received following the death of an individual, if they are paid in a lump sum for the portion exceeding the debts and charges to which he/she is responsible for.
The exclusions anticipated in paragraphs 4 and 5 apply if the assets are received over the course of a month during which the person is a client of an assistance program of last resort. A person who receives an allocation by virtue of the overriding principle is not considered a client.
The exclusions anticipated in paragraphs 4 and 5 are maintained up to the date of the claim when the financial assistance that is allocated for the month during which the assets are received is claimed in full, thus avoiding the provocation of a domino effect. However, if the claim results in a false declaration, these assets cannot benefit from exclusion.
Finally, the exclusions anticipated in paragraphs 4 and 5 continue to apply the first time that the assets are transformed into liquid assets or the liquid assets are transformed into possessions.
1. GLOBAL EXCLUSION
Several combinations of assets mentioned in the previous paragraphs are possible since it is the global value of these possessions and liquid assets which must not exceed $269 092.
Example:
A client possesses a residence with a net value of $110 000. The value of the possessions to be considered for this exclusion respects the same principles as for the partial exclusion of $187 996 (refer to 3.2.5). Generally-speaking, when dealing with the residence, the net value is calculated, while for the other possessions the market value is calculated. The following are a few examples of possible combinations for this global exclusion:
- RRSP of $200 000 and a cottage with a market value of $69 092;
- Residence with a net value of $269 092;
- Residence with a net value of $210 000 and a RRSP with a value of $59 092;
- $269 092 in liquid assets obtained by inheritance;
- A building that the client does not live in with a market value of $230 000 and a RESP of $39 092.
1.1 CALCULATION OF AN INHABITED RESIDENCE
The exclusion allows for considering the net value of a residence that the client does not inhabit because of accommodations or relocation for a health or sanitary reason or separation for a two-year period. Once this period expires, if the client still possesses the building, it is the market value of the building that will be calculated in the file and, if applicable, a rate of 2% will be applied to the surplus calculation.
Example:
A client is accommodated on May 1, 2019.. The client’s residence has a market value of $217 129 and a net value of $183 000. The client also possesses a RESP with a value of $20 000. Up until April 30, 2021, the value of the possessions of this client will be $203 000 ($183 000 + $20 000). As of May 2021, the global value of the possessions will be $237 129 ($217 129 + $20 000), meaning the calculation of resources equivalent to 2% × $1722= $34.44
1.2 CALCULATION OF THE SURPLUS
A rate of 2% applies to the calculation of the global value of the possessions and liquid assets when these exceed $269 092. Furthermore, the base exclusion for the possessions and liquid assets does not apply.
Example:
A client possesses a residence with a net value of $265 000 and a RRSP with a value of $20 000. The global value is therefore $255 000. An amount that equates to 2% of $ 15 908 which comes out to $ 318.16 is calculated as a resource and decreases the allocation that the client is entitled to.
2. INITIAL ALLOCATION
The exclusion anticipated in paragraphs 4 and 5 can apply for the month of the application (refer to 5.6.8).
3. ADDITIONAL EXCLUSION OF $1000
When a single adult or an adult who is part of a family is the owner of his/her place of residence, the global exclusion of $ 269 092 for possessions and liquid assets is INCREASED by $1000 per year of occupation as the owner of this same place of residence. Furthermore, this additional exclusion is maintained in the case of a single adult or an adult who is part of a family presenting a severe employment-related constraint who was obligated to change property for reasons other than his/her desire to do so as long as he/she has remained the owner of a place of residence without interruption. In these situations, a substitution is simply considered as having taken place.
Examples:
- Change of residence necessary, according to the OPHQ, in order to allow for making adjustments to the home for functional limitations;
- Relocation following an expropriation or a disaster.
4. SEPARATION OR DEATH
In order to be eligible for the exclusion, the client must present a severe employment-related constraint. If a modification to the person’s family situation causes him/her to no longer be considered as having an employment-related constraint or a temporary employment-related constraint, the person loses the benefit of this exclusion starting from that moment on.
Example:
Ms. Awashish, a member of a family with a spouse presenting a severe employment-related constraint, inherits in June 2023 a cottage from her parents with a market value of $50 000. The possession is included in the global exclusion of $269 092. On October 10, 2023, Ms. Awashish’s spouse passes away. Ms. Awashish’s situation is therefore re-evaluated with respect to the financial assistance for the month of February since the three-month delay for maintaining her spouse in the family size has come to an end. The evaluation confirms that Ms. Gagnon is eligible as a single person without a severe employment-related constraint. The $50 000 cottage can no longer be excluded. A resource of $970 will be included in her file in the following manner: $50 000 - $1500 = $48 500 × 2% = $970.
5. ASSETS RECEIVED BY WAY OF INHERITANCE, LIFE INSURANCE BENEFITS AND DEATH INDEMNITIES
A single adult or a family can benefit from the exclusion anticipated in paragraphs 4 and 5 if the assets are received over the course of a month during which the person is a client of the last resort financial assistance program.
The following are considered clients:
- Those who receive an allocation;
People who receive an allocation by virtue of the discretionary power are not considered clients for the allocation of this measure.
The value of an inheritance is determined after the charges to which the inheritance is subject to have been applied. The value of the possessions and liquid assets is evaluated in accordance with the usual criteria which is the net value for the residence and the market value for the other possessions.
5.1 DURATION OF THE EXCLUSION
The exclusion anticipated in paragraphs 4 and 5 is maintained for as long as the adult or the family member presents a severe employment-related constraint. Moreover, it continues to apply the first time that the possessions are transformed into liquid assets or the liquid assets are transformed into possessions.
Example:
A client inherits a building with a market value of $75 000. He/she sells the building for $90 000. Since the building stems from an inheritance, the $90 000 amount can benefit from the $269 092 exclusion. Afterwards, the same person uses the $90 000 in order to purchase a $50 000 cottage. The cottage cannot be part of the exclusion for the inheritance. However, it can benefit from the exclusion for another real property. The $40 000 that remains as a result of the transaction can continue to benefit from the exclusion for an inheritance. A few months later, the client sells the cottage for the amount of $45 000. This amount of liquid assets can no longer be excluded, since the exclusion for the inheritance came to an end following the first transformation. These liquid assets are added to the client’s regular liquid assets and he/she can only benefit from the base exclusion which is $2500 for a single adult or $5000 for a family. The allocation for the following month will be cancelled because of the surplus in terms of liquid assets. (Note that cottages or cabins are not part of the partial exclusion of property for adults without limited capacity for employment.)
5.2 CLAIM FOR THE FINANCIAL PERIOD DURING WHICH THE ASSETS WERE RECEIVED
The adult or family can no longer benefit from the exclusion anticipated in paragraphs 4 and 5 when the financial assistance period during which the assets were received is claimed in full. In these situations, the loss of exclusion only applies to the periods following those in which the claim was established.
Example:
- Client presenting a severe employment-related constraint since February 2019;
- An inheritance of $50 000 is received in July 2020;
- In the month of September 2021, the financial assistance received between February 2019 and May 2020 is claimed in full because of the fulfilment of a SAAQ claim.
The client will lose the exclusion benefit for the financial assistance of October 2018. In this particular case, the file will have to be cancelled because the amount of $50 000 exceeds the base exclusion for liquid assets. If the inheritance had been a cottage, its value would have been excluded, because of the application of paragraph 3 in this instance.
However, if the claim is the result of a false declaration, the adult or family cannot benefit from exclusion as anticipated by paragraphs 4 and 5 for these assets as of their reception.
For the previous example, the financial assistance must be subjected to a new calculation while taking into consideration the value of the inheritance as a regular liquid asset generating a claim. If the inheritance had been a cottage, its value would have been excluded because of the application of paragraph 3.
5.3 BENEFITS AND INDEMINITIES PAID IN A LUMP SUM
The exclusion anticipated in paragraph 5 targets life insurance policy benefits and death indemnities that are paid in the form of a lump sum. These amounts can be intended as compensation for the death of an individual or for covering funeral costs.
However, a particularity applies for death indemnities that are paid to the surviving spouse by the SAAQ: it can be paid in a single lump sum or be spread out in the form of periodical payments, divided over a maximum period of twenty years. Whether the allocation is in a lump sum or spread out, the recipient has access to the entire indemnity (capital and interests). The entire indemnity constitutes liquid assets that the client can access freely. These liquid assets are excluded up to a limit of $269 095. Since the entire indemnity is already considered liquid assets, the amounts that are allocated periodically to the client have no impact on the allocation.