2.10 - Wages

For applicants/clients who are not in receipt of, but are awaiting wages, see Awaiting Income Other than Employment Insurance.

For applicants who are employed, actual income stubs are to be used for both the initial interim cheque as well as for the first month for which assistance is given.

Note: Income stubs for the reporting period prior to the current date are required in order for the interim cheque to be calculated correctly.

The calculation of the amount of the first cheque for an applicant who is no longer employed is dependent upon the last pay received. If the last pay has been received within the current month, eligibility begins subsequent to that pay. If it is a two week pay, eligibility begins two weeks later whereas if it is a one week pay, eligibility will begin in one week.

Assistance will be calculated by use of the following calculation:

• Number of days to be paid divided by
• Number of days in the month - this total is multiplied by
• The total of: the Basic Household Rate minus
  - Monthly income from any remaining employment
  - Any prior assistance for the same period
  - Any deductions

For those clients who are receiving income from operating a recognized boarding house, this income is considered wages and must be reported monthly. The 25% business deduction will be applied; after which the Wage Exemption is also applied, if client is eligible. See Boarder.

A deduction to allow for business expenses may be provided for the following types of wages, and may be provided in addition to a wage exemption:

• Boarder - 25%
• Self-Employed - up to a maximum of 50%

The intent of this policy is to ensure Clients have enough resources to meet their basic needs at the first of a month when they first become employed.  It is also to ensure they transition from assistance without being placed in a hardship situation due to finding employment.  Clients who become employed either through their own initiatives or those of SD must begin reporting wages immediately.

Eligibility is manually predetermined, taking the wage exemption into account, to determine if the client has sufficient resources.   Please refer to the Client Who Becomes Employed procedure for information on how to calculate and add the income information to the client file.

Other related issues:

When a client finishes his/her employment, a Wage Top-Up benefit may be issued for one or two months to ensure the client is receiving the equivalent of the basic rate of assistance. 

If adequate information regarding the pay start day and pay cheques received cannot be obtained, the case may be closed effective the date of the client’s contact.

A client who receives a basic assistance cheque on the first of a month would also be eligible for the Income or Fuel Supplement.  Certified Blind, Deaf or Disabled clients would also be eligible for the Disability Supplement.

When determining whether or not you want to issue an employment related special benefit such as child care or transportation for the month after employment has started, both the wages and basic assistance should be taken into account when calculating available resources.

Clients who are no longer employed, and who had been reporting wages; may be issued a cheque for the amount required to bring their total monthly income up to the basic household rate. When calculating the amount of assistance for which the client will qualify, the duration (1 or 2 weeks) of the final cheque should be taken into account and it should be verified by the case manager that there was no additional wages or vacation pay which have been or will be received after the client's final pay. Any additional wages/vacation pay should be deducted from the assistance cheque issued following receipt of these pays.

For clients who are employed, see Reporting Wages.

Part-time or casual wages which do not generate Employment Insurance benefits and which are related to harvesting only (picking strawberries, apples, potatoes, blueberries etc,) are not to be considered when calculating the budget deficit. No special benefits will be issued to these clients during the period of harvesting.

Clients and applicants reporting wages should ensure that income tax is being deducted at the minimal rate. The completion of the Canada Customs and Revenue Agency’s TD1 form allows for income tax to be deducted based on household size and anticipated yearly income. It may take a client/applicant up to a month to have their employer adjust the amount of income tax being deducted in which case the actual amount of income tax is to be considered an allowable deduction. A large percentage of clients should not have income tax deducted from their wages.

All full or part-time wages of any household member must be included in the calculation of the household's assistance. Net income from wages refers to the gross monthly wages less deductions for Canada Pension Plan, Employment Insurance, union dues, private health insurance, and compulsory income tax. Real net income is client's actual take home pay. Pay stubs should be read very carefully. Wages will be calculated based on the previous month's wages, (e.g. wages received during the month of April will be used to calculate assistance for the May cheque), and pay stubs should be received before the 21st day of each month (or the last business day before) in order for the cheque to be issued by the first of the month.

Applicants who are employed and clients who become employed must be given a copy of the Guidelines for Those in Receipt of Income form letter.

Documentation used by the client to verify wage income can either be a pay stub or written confirmation from the employer.

It must include the following characteristics:

• Name of client
• Gross amount of pay
• Details of all deductions
• Net pay amount
• Pay period - Pay from and to dates
• Date that the pay was actually received
• Number of hours worked, and
• Employers name

An income stub will be considered inappropriate if it is informally written (i.e. on a scrap of paper), or if information listed above is either unclear or missing.

Note: When an income source ends, for which a monthly income stub is not required, the next cheque will not be reduced unless the end date is the same as the cut-off date.

When a tenant's rent is reduced by the landlord for work performed by the tenant (client) for the landlord, the amount by which the rent is reduced would be considered a wage. Example: Tenant/client would normally pay $500.00 per month for rent. Tenant/client works for landlord (painting, cleaning, superintendent duties, etc.) and the client rent is reduced by $250 per month. The monthly income from wages would be $250.00. This amount would be set up as an income on the client's file (not as a Third Party payment). The monthly rental amount would be recorded as $500.00 in the address window.

Required Documents:

1. Monthly pay stub or letter from the landlord.

See Self Employed.

Severance pay is compensation paid to an employee who has his or her employment "severed". It compensates an employee for loss of seniority and job-related benefits. It also recognizes an employee's years of service.

Applicant's who have received a severance pay will have the income prorated based on their regular wage (weekly, bi-weekly, semi monthly or monthly). This will determine the number of weeks the severance covers and the future date of eligibility. The regular wage would be the applicant's net income allowing for any mandatory deductions.

For clients where a severance pay is paid for a period in the past where social assistance benefits were paid, the income would be prorated as above and set up for the appropriate period to establish an overpayment. Where the severance is paid for a period where the client was not in receipt of social assistance, the severance would be prorated as above for an applicant.

Example - If an applicant received a $10,000.00 severance and their weekly pay is $500.00, they would be ineligible for 20 weeks (10000/500) from the date of their severance payment. This calculation should compare with the calculation for Employment Insurance benefits.

• Clients

Clients who are students (full or part-time) are subject to the same wage and wage exemption calculations as all other employed clients.

• Dependents

Wages for dependents who re day students (full or part time) in attendance at an accredited educational institution, are totally exempt.

• Summer Jobs

For students who re clients and whose wages from a summer job will make them ineligible for assistance, a Health Card may be considered under Section 4(4) if the case plan indicates the client will be returning to their studies in the fall.

For wage earners who receive tips from employment, a deduction of their gross wages will be made, normally at the following rates:

• waiters and waitresses in unlicensed premises - 10%
• waiters and waitresses in licensed premises - 15%
• bartenders - 25%