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Details: proposed regulation changes for RGI calculations

Published May 29, 2019

The Community Housing Renewal Strategy contains some good news about rent-geared-to-income (RGI) calculations.

Every year, co-op members who receive a rent-geared-to-income subsidy go through a complex process to prove their eligibility to continue to receive it. And every year, co-op staff spend a lot of precious time processing and reporting on each subsidy.

Under the Strategy, the proposed changes mean RGI will be based on a simple calculation from income reported on a tax return, beginning July 1, 2021.

Here are some pertinent details:

RGI calculations: what remains the same

  • will still be calculated annually on the basis of 30% of a household’s total income
  • for members receiving social benefits and whose monthly non-benefit income is under the prescribed limits, housing charges will still be determined by the existing “rent scales”
  • members still have to report on certain changes to their household:
    • a permanent change in household composition
    • a member of the household that begins or stops receiving social assistance
    • a member of the household that begins or stops being a full-time student

RGI calculations: what changes

  • Household income:to be defined by line 236 (Adjusted Family Net Income) of Canada Revenue Agency’s Notice of Assessment
  • Housing charge calculations:
    • 30% of the Adjusted Family Net Income
    • divided by 12 months
    • modified for monthly utility charges or allowances
  • Employment deduction, If applicable: $1,800 per year, applied to the Adjusted Family Net Income
  • Student income: exempt from housing charge calculations if student is full-time at a recognized educational institution
  • Imputed income: not included in RGI calculations for non-interest bearing assets (e.g., art, RESPs, RRSPs)
  • In-year increases to income: do not need to report and will not change current housing charges, unless the household was subject to a tax reassessment
  • 20% or more income decrease: can request a RGI re-calculation, once every fiscal year
  • Exceptions to annual calculations: For some members, like seniors on fixed incomes, Service Managers would be allowed to forgo annual calculations (e.g. verify income every other year)

Other proposed changes to the RGI program:

  • Minimum rent: will be in effect July 1, 2021, and it will be adjusted annually by provincial rent guidelines
  • Eligibility: will not be eligible to return to an RGI subsidy after paying market rate housing charges for 24 months in a row
  • Income tax return: Households will have to file their income tax every year by the appropriate deadline, or lose their eligibility for subsidy, subject to Service Manager discretion

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