NOTE: This section also applies to ceded or spent assets.
The concepts of RESPONSIBILITY AND REASONABLENESS are used to assess whether:
- property was disposed of for fair consideration.
It must be determined whether a reasonable and responsible person would have acted as the recipient did in similar circumstances. In order to do so, the adult must have an understanding of the normal and predictable consequences to his actions.
Some EXTRINSIC CAUSES can, if proved to create a pathological state beyond the person’s control, explain irresponsible behaviour. The main extrinsic causes are drug addiction and alcoholism.
Fair consideration is assessed by:
- taking into account repairs required, the market, efforts made to obtain higher consideration, services provided to maintain the property disposed of;
- an adult or family may use the proceeds from the sale of a house to repay loans, pay legally incurred debts, acquire services and make any reasonable expenditures that are supported by appropriate vouchers;
- the consideration involved in the GIFT of a HOUSE in exchange for a RIGHT OF HABITATION is calculated by assigning a value to that right.
Fair consideration for the disposition is calculated as follows:
- rental value X 12 months X difference between the life expectancy and age (since 2006, life expectancy was 81 years for women and 78 years for men).
The recipient must provide VOUCHERS SHOWING that he or she obtained CONSIDERATION. Every expense supported by written proof is accepted, even if the expense is already covered by the adult-benefit.
In cases of spending, when it is reasonable to believe that the adult or family has spent amounts of money in order to cover its regular needs (food, housing, clothing, etc.), the income security program accepts to calculate these in the considered compensation. Since the budget for these types of expenses vary from one adult or family to another, a minimum monthly amount corresponding to twice the severe employment-related constraint allocation is applied regardless of whether or not this adult or family are clients of a last resort financial assistance program.
When the amount of the regular expenses is recognized for the purposes of calculating the compensation, it is subtracted from the amount of resources of the adult or family. These resources can be in the form of work income or even a financial assistance of last resort allocation.
The adult or family is not required to produce supporting documents for its regular expenses. However, supporting documents are required for any other expenses.
When the monthly amount of the regular expenses is greater than twice the severe employment-related constraint allocation, the adult or family must simply produce its budget. The counsellor then evaluates and determines if it is reasonable.
For the calculation of the ceded or spent value, refer to 3.2.13.