Subject: Requesting Notice of Tax Assessment at the Annual Review

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1 1 HIP Housing In Peel Policies & Procedures No Revision: N/A Date: February 5, 2007 Subject: Requesting Notice of Tax Assessment at the Annual Review Reference: [O. Reg.298/01 s. 11.(1), (2), (3, (3.1)); 12. (1) (i), (1.1); 50. (3) 26; and s. 52. (1)] Who is this applicable to? Please check: Municipal Non-Profit and Private Non-Profit Co-operatives Federal Non-Profit OCHAP/CSHP Rent Supplement Under each Service Agreement signed with the Regional Municipality of Peel, social housing providers are required to comply with Regional policies and procedures. Provider Points Effective immediately, at the time of the next annual income review each member of a Rent-Geared-to-Income (RGI) household who is 16 years or older, is required to provide their most recent Notice of Tax Assessment. The exception to this policy is a dependent student of the household who is 16 years or older and in full-time attendance at a recognized educational institution as defined in O. Reg. 298/01 s. 50 (3) 26. The Notice of Tax Assessment is to be used as a tool to help to verify data already collected and to encourage the accurate reporting of all sources of income.

2 2 Purpose/Overview To implement a policy to request the Notice of Tax Assessment at the Annual Income Review. This is in keeping with a recommendation of the most recent Internal Audit of the Housing and Property Department of the Region of Peel. Implementing this policy will help to ensure that all sources of income are declared for the purpose of accurately determining the amount of RGI assistance for which a household is eligible. Background Legislative/Discussion Under the Social Housing Reform Act, 2000, Ontario Regulation 298/01, the income of every household that receives rent-geared-to-income assistance must be reviewed at least once each year to determine if the amount of rent they pay should be changed or remain the same. The Internal Audit recommended that each member of a household 16 years or older be required to submit the most recent Notice of Tax Assessment at the time of the annual income review. This is in addition to the income verification documents that are currently requested, such as current pay stubs or letter/s of employment verification, bank statements, etc. As such, the Region is implementing a policy to this effect. Policy At the time of the annual income review, the most recent Notice of Tax Assessment is required to be provided for each member of the household who is 16 years or older. This is in addition to the appropriate forms of verification documents required to verify current gross monthly income, such as current pay stubs, letter/s of employment verification, bank statements, etc. Exception to this rule: A dependent student of the household who is 16 years or older and in fulltime attendance at a recognized educational institution as defined in O. Reg. 298/01 s. 50. (3) 26.

3 3 Applying the Policy This policy is to be implemented at the time of each household s next annual income review. The Notice of the Annual Income Review given to the household must include a request for the most recent Notice of Tax Assessment for each member of the household who is 16 years or older. This is in addition to the documents typically requested to verify the household s current gross monthly income, i.e. current pay stubs, letter/s of employment verification, bank statements, etc. The request should also specify that a dependent child of the household who is 16 years or older and in full-time attendance at a recognized educational institution is exempt, providing they meet the definition specified in the regulation (O. Reg. 298/01 s. 50 (3) 26). How should the information on the Notice of Tax Assessment be used? The Notice of Tax Assessment is to be used as a tool to encourage the accurate reporting of all sources of income and to check that the income reported in the previous year was not less than the income specified in the Notice of Tax Assessment. If on reviewing the Notice of Tax Assessment it is suspected that the household member has not reported all income to the housing provider, and the member cannot provide a reasonable explanation, a certified copy of the member s income tax return, may be requested. The certified copy of the income tax return form will provide more details than the Notice of Tax Assessment. However, housing providers should only request a certified copy of the income tax return if necessary, as it is cumbersome to obtain and the household may have to pay a fee for it. Note that the Notice of Tax Assessment reflects income for the previous tax year, which may be different from the current income. What if a household fails to provide the Notice of Tax Assessment? If a household fails to provide all the information and documents required by the housing provider within the time specified, the household will cease to be eligible for RGI assistance. (Refer to O. Reg. 298/01 s. 12 and s. 11.) However, section 11. (3.1), and section 12. (1.1) of O. Reg. 298/01 allow the service manager some flexibility.

4 4 Therefore: It is important that all housing providers immediately advise all geared-toincome tenants/members in writing that the Notice of Tax Assessment will be required for all future annual income reviews. They should also be informed that if it is not provided, the household will cease to be eligible for RGI assistance for failing to provide the document. (See attached Appendix 1 for a sample letter and Appendix 2 for a sample Notice for posting on a notice board.) If the tenant/member has already filed his/her income tax, but needs extra time in order to obtain a copy of the Notice of Assessment from Canada Customs and Revenue Agency (CCRA), the deadline may be extended by a reasonable time (six (6) weeks recommended). If the tenant/member does not comprehend English well, or has a psychiatric or developmental disability, they should be encouraged to contact an appropriate agency who will be able to explain the situation to them and/or advocate on their behalf to assist them to file their income tax return. (See Helpful Hints below for examples of agencies.) Move-in Date Prior to September 2004 For the first year of administering the policy, do not withdraw the RGI subsidy if the tenant/member was housed prior to September 2004, and is unable to provide a Notice of Tax Assessment because they did not file their income tax. Note: effective September 2004, new RGI households are required to provide their Notice of Tax Assessment for Peel Access to Housing (PATH). As such, RGI households who were housed after that date should be able to provide a Notice of Assessment since it was required prior to their moving into the unit. Actions Required Housing Provider s Role Implement the policy as outlined in this document at the time of the RGI household s annual income review. Service Manager s Role Provide advice, suggestions and information as required to housing providers.

5 5 Monitor, through the operational review process, the housing providers compliance with policy. Helpful Hints It is important to immediately notify all RGI households in writing of the new policy. (See attached Appendix 1 for a sample letter. You will need to modify as appropriate.) Post a notice in a central location in your building informing residents of the new policy. (See attached Appendix 2 for a sample Notice. You will need to modify as appropriate.) In addition to the posted notice and the letter, it may also be useful to speak directly with any tenants/members who may have difficulty comprehending the policy or the serious implication of not providing the Notice of Tax Assessment. This policy requirement should be included in the lease/agreement signing package for new tenants/members. Discuss with the new household the serious consequence of failing to provide the Notice of Tax Assessment or any other information requested to verify income. If appropriate, refer the tenant/member to an agency that may be able to advocate on their behalf to ensure they fully understand the consequences of failing to provide this information and/or can assist them to file their income tax return or obtain the Notice of Tax Assessment. Example of such agencies are: o For translation services, Catholic Cross-Cultural Services, Brampton ,7740 or Mississauga ; o For psychiatric services, Canadian Mental Health Association, Peel Branch, ; and o For developmental disability, Community Living Mississauga, or Brampton Caledon Community Living, Please contact your Region of Peel Social Housing Administrator if you require further clarification on this document.

6 6 Sample Letter Appendix 1 Date: Dear Resident, The Region of Peel has implemented a new policy for households who receive a rent-geared-to-income subsidy. The policy requires each member of the household who is 16 years or older to provide a Notice of Tax Assessment at the time of the annual income review. If you have a dependent child who is 16 years or older, a Notice of Tax Assessment is not required for this child provided he or she attends school or college or university full-time. What does this new policy mean to you? This new policy means that at the time of your annual income review you must provide the most recent Notice of Tax Assessment for every member of your household who is 16 years or older. If you have a dependent child who is 16 years or older and attends school, college or university on a full-time basis, they do not need to provide a Notice of Tax Assessment. It is very important to note that if you do not provide the Notice of Tax Assessment when requested, you will cease to be eligible for a geared-toincome subsidy. This means you will lose your rent-geared-to-income subsidy and will have to pay the market rent for your unit (or housing charge for co-operatives). What is a Notice of Tax Assessment and how do I get one? A Notice of Tax Assessment is received from Canada Revenue Agency (CRA) a few weeks after you file your annual income tax form. You must file an annual income tax return before you can receive a Notice of Tax Assessment. If you need more information about this new policy, please contact (please give the resident the name and telephone number of a contact person from your project).

7 7 Sample Notice Appendix 2 Date: January 2007 NOTICE OF POLICY The Region of Peel has implemented a new policy for households who receive a rent-geared-to-income subsidy. The policy requires each member of the household who is 16 years or older to provide a Notice of Tax Assessment at the time of their annual income review. If you have a dependent child who is16 years or older, a Notice of Tax Assessment is not required for this child provided he/she attends school or college or university full-time. You must provide the Notice of Tax Assessment at the annual income review. You must also provide all the documents and information requested by your housing provider to verify your current gross household income. If you fail to provide the Notice of Tax Assessment to your housing provider when requested, you will cease to be eligible for a rent-geared-to-income subsidy. This means you will lose your rent subsidy and have to pay the market rent (or occupancy charge) for your unit. For more information please contact your housing provider.