A perfect storm: Ontario Autism Program changes may inflict more pain on federal public servants burnt by the Phoenix pay system
The changes to the Ontario Autism Program (OAP) from a needs-based service to a financial supplement scheme is throwing many families into crisis. We hear gut-wrenching stories of life changing services being ripped away from vulnerable kids and teens with autism, and hopes and dreams crushed for those that had been waiting their turn for these services. Ontario’s schools have expressed major concerns as they’re not in a position to accommodate an influx of autistic kids with varying needs into the system full-time.
But here’s an interesting angle from a conversation I had with some folks at the massive autism protest at Queen’s Park on March 7; how the Government of Canada’s pay system could make life more difficult for its public servants living in Ontario with children on the autism spectrum.
Federal public servants have been experiencing pay issues for just over 3 years since the beleaguered Phoenix pay system was implemented in February 2016. The botched pay system has resulted in public servants being overpaid, underpaid, or not paid at all.
Currently 68% of public servants have a pay issue. As of January 23, the backlog of pay issues numbered 275,000 transactions. It’s been difficult for the government to estimate when the backlog of pay issues will be cleared, however they’re targeting between 3–5 years.
The Government of Canada employs a massive 273,571 people across the country. In Ontario alone, there are approximately 115,000 federal public servant jobs (Note: the government reports employees in the Ottawa-Gatineau Quebec “Capital region” together, however about three quarters of those jobs are located in Ottawa, with another 38,383 Ontario based jobs outside of Ottawa).
The rally-cry of the Public Service unions is that its members have been “burnt by Phoenix”, and those with autistic kids and teens just might be inflicted with more pain due to the changes to the OAP.
The new OAP’s financial supplement scheme uses income testing to determine how much of a supplement a family can receive for autism related services. How will the OAP determine your income? Through your tax returns. Initially this will be evaluated by your net income from line 236 of your Notice of Assessment. To be clear, this is your income less deductions like RRSPs, union dues, and child care expenses; which is not the same as your net pay which is less income taxes, EI, CPP, etc. Eventually the Ontario government plans to fully automate this process using adjusted family net income:
Adjusted Family Net Income is your family net income minus any universal child care benefit (UCCB) and registered disability savings plan (RDSP) income you’ve received plus any UCCB and RDSP amounts repaid.
You might be thinking didn’t the Harper Government’s UCCB get replaced by the Canada Child Benefit from the Trudeau Government? You’d be right. The UCCB was eliminated in 2016. Why this terminology is being used by the Ontario government is baffling, but it fits with the overall quality of program details revealed to date, with just 3 weeks until implementation.
The combination of how the Ontario Government determines your eligibility for the autism financial supplements and the Federal Government’s prolonged duration to resolve pay issues, is like a perfect storm of 2 flawed systems that may burn families again.
Before we look at a couple of scenarios, it’s important to understand that there are supplement thresholds based on the child’s age. Those under 6 can receive up to $20,000 a year, those 6 and over can receive up to $5,000 a year. There’s also a sliding scale income claw-back of 1.5% for every $3,000 in income starting at $55,000.01, and the supplement is eliminated when income is over $250,000.
For those that have been underpaid by the Phoenix pay system, the resolution of your pay issue may occur in a subsequent tax year. Here is how the CRA explains this issue:
The T4 system is based on actual amounts you are paid and receive in a calendar year. Therefore, if an amount was owed to you in 2018, but is only paid to you in 2019, that payment will be reported on your 2019 T4 even though it was owed for 2018. In this case, you could pay lower income taxes than usual in 2018 and higher income taxes than usual in 2019.
A common underpayment problem occurs when acting in a higher-level position. As an example, someone may be an acting manager, but their substantive position is a lower pay grade. So, let’s say your 2018 net family income should be $100,000 a year, but you’ve been underpaid by $10,000. For simplification, let’s say their 2018 net income reported to CRA shows as $90,000. Then, in mid-2019 your pay issue gets resolved adding $10,000 of income for 2019. How could this affect your OAP funding?
Well, if you’re child is under 6, the OAP would grant you 82% of the $20,000 available to you, so $16,400 this year due to your underpaid 2018 income of $90,000. For your subsequent year’s budget, the OAP will reassess your family income. This additional $10,000 in backpay is now added to your income, plus you’re now getting paid your full $100,000 salary, bringing your 2019 income to $110,000. Due to this change, you’re only eligible to receive 71.5% of the supplement, or $14,300. The childhood budget has now been reduced by $2,100.
You might think, well what’s the big deal? They received their backpay and now they can use that to make up the autism supplement gap. Well perhaps, but let’s not assume we know the financial position the family is in. Autism families are typically debt riddled as they are forced to use their savings and remortgage their homes to pay for therapies out of pocket. Also, quite often those that have had pay issues with Phoenix have also incurred debt to make up the loss in income. Therefore the backpay may needed for debt payments rather than making-up autism funding gaps.
Thankfully those that are overpaid and report the overpayment in the year it occurred are not impacted, as their T4 is amended to not show the overpayment.
However, those that don’t discover the overpayment until the subsequent year could be impacted if their OAP childhood budget has already been determined and you’re spending it. In this scenario, the employee will receive an amended T4 and their tax return will be reassessed. This would lead to a reduction in net income and potentially put the family into a lower claw-back scenario. It’s unclear how the OAP would handle such a situation. Would the family be able to have their annual “childhood budget” allotment amended to access the additional financial supplement?
What would happen if the overpayment timeframe falls within the child turning 6 years old? The childhood budget is now lowered to up to $5,000, but they’ve now lost out on a portion of the pre-6 childhood budget that was up to $20,000. Would the OAP grant childhood budgets retroactively? My guess is not, but who knows. These types of scenarios have not been disclosed by the OAP.
Families impacted by Phoenix pay issues undergo a significant amount of stress as it is. Caring for children on the autism spectrum also brings additional pressures to the family. Having your pay system cause additional autism therapy stresses is just another kick in the teeth that these families really could do without.