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Social Housing (Ontario) Legal Guide
(23 November 2021)

Ch.10 - RGI Overpayments


  1. Overview
  2. Social Assistance Overpayment Comparison
  3. RGI Overpayment Collection in Context
  4. Limitations on RGI Overpayment Collection Against Household



Note:
These RGI overpayment provisions apply not only to HSA Part V 'designated housing projects' [which make up the bulk of the Social Housing (Ontario) Legal Guide], but generally to municipally-run (ie. by 'service managers') RGI-assisted social housing of which Part V housing is only one form [HSA 39(2)].

1. Overview

Sometimes, due to service manager mistake or household mis-disclosure or non-disclosure, too much RGI rent assistance is paid - I'll call this an 'RGI overpayment'.

All members of the household who are parties to the lease or occupancy agreement are jointly and severally liable to pay for an RGI overpayment [HSA 56(3)]. This treats the RGI rent situations like that of 'joint tenancies' in the larger law of landlord and tenant.

RGI overpayments are debts owed to the service manager (the local municipality or DSSAB), and they "may recover the debt by any remedy or procedure available to the service manager by law" [HSA 56(4)].


2. Social Assistance Overpayment Comparison

The analogous situation with welfare or ODSP is an 'overpayment', and it is dealt with similarly: Overpayments (ODSP) [HSA 56(1)]. The collection of an overpayment is discretionary on the service manager ["the service manager may require the household to pay": HSA 56(2)], which brings up interesting and novel issues respecting the Surdivall case discussed at that link respecting the discretion of the welfare administrator/ODSP director to collect overpayments (which see).

Transference of Surdivall law to social housing is complicated by an HSA Regulation provision [Genl Reg 64(1,2)] which - on it's face - denies a service manager the ability to collect an RGI overpayment that is the service manager's 'fault', but denies that leniency in the case to "an error made by a member of the household".

So which rules: Surdivall or Regulation 64? There are some subtle issues of statutory interpretation here which I am not engaging with yet.


3. RGI Overpayment Collection in Context

One method commonly used to 'collect' an RGI overpayment is to increase the rent charged to the household until the RGI overpayment is paid off (subject to limitations set out below) [HSA 56(5)].

But, unlike welfare/ODSP overpayments, the RGI rent situation is a three-party relationship - and that needs some explaining. Remember the service manager (ie. the municipality or the DSSAB) 'funds' the RGI scheme, while the housing provider (typically a housing corporation of some sort) 'operates' the tenancy - the latter similar to a normal landlord. The housing provider directly collects the rent - but the service manager pays the housing provider a 'subsidy' to enable the housing provider to provide reduced RGI rent to the household [HSA 28, 78].

So when a household RGI overpayment occurs, in fact two overpayments are created: one against the household, and the second against the housing provider who has been 'overpaid' (or over-compensated) their subsidy.

Consequently a two-stage RGI overpayment collection exists [HSA s.56(5)]:
  • Rent Increases to the Household

    The service manager (who controls the rent amount owed by the household to the housing provider) may recover an RGI overpayment by increasing the rent payable by the household to the housing provider. In the case of such an increase, the RTA 'Notice of Rent Increase' duties are dispensed with [HSA 56(6); RTA 116, 118] (but see s.4: "Limitations on RGI Overpayment Collection Against Household", below).

  • Reducing Subsidy or Housing Provider Payment

    The service manager adjusts the subsidy that it pays the housing provider by reducing it, or requiring the housing provider to make a compensating payment.

4. Limitations on RGI Overpayment Collection Against Household

The following limitations apply to any increase on rent payable by a household as a result of RGI overpayment collection (this also is very analogous to the welfare/ODSP situation) [Genl Reg 65]:
  • No More than 10% Increase

    The increase may not be more than 10 per cent of the RGI rent that would otherwise be payable.

  • Notice of Increase Shall be Sent by the Service Manager

    Note (from immediately above) that in the case of such an RGI overpayment increase, the RTA 90-day 'Notice of Rent Increase' duties are dispensed with [HSA 56(6); RTA 116, 118]. But in it's place the service manager still has a duty to provide a notice of increase [there is no LTB form for this], and "the increase is not effective until the beginning of the second month after the month in which the notice was given". This notice must be given to both the household and the housing provider.

    Due to the COVID crisis, if an increase in rent would otherwise come into effect during any period in 2021, the increase is delyed until January 1, 2022.

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