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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