Ombudsperson report finds BC workers forced to pay back COVID-19 benefit because of retroactive requirement
The Ministry of Finance unfairly clawed back a key COVID-19 benefit that helped thousands of British Columbians offset employment losses during the pandemic, a new report released today by the Ombudsperson finds.
“This report reveals that government hasn’t taken responsibility for failing to tell impacted people when a requirement retroactively changed for a key pandemic benefit,” said Ombudsperson Jay Chalke.
The report focuses on the BC Emergency Benefit for Workers, a one-time tax-free payment of $1,000 announced in March 2020 that paid out $643 million in benefits over the following months.
The Ombudsperson’s report tells the story of two people who applied for the benefit, met all eligibility criteria at the time and received the benefit. They were told later that because a new deadline was imposed retroactively after they applied, they were no longer eligible and the benefit would have to be repaid. The Ombudsperson found that the ministry did not inform these two people, and thousands like them, of the new deadline and therefore requiring them to pay back the benefit was unfair.
According to the ministry as of August 2022, 12,000 people were required to pay back the benefit, however that number has continued to rise as the ministry’s audit of the program has continued.
“Providing people with clear and timely information when programs change is a key pillar of fairness,” said Chalke.
“Given the speed with which pandemic relief programs were implemented, it’s acceptable that subsequent changes were made to government programs. It is even acceptable that the changes were retroactive. What is not okay is that a change was not communicated to those who applied so that they could take steps to comply with the new rule. That is unfair.”
When the benefit first rolled out on May 1, 2020, one of the requirements was that applicants had to have filed, or agreed to file, their 2019 taxes. The ministry did not originally impose a deadline for filing 2019 taxes as a condition of receiving the benefit.
However, legislation introduced eight weeks later changed that by establishing a deadline of January 1, 2021. By the time this change was made, 90 percent of applications had already been received.
While the ministry updated its website, it did not communicate the new tax filing deadline to people who had already submitted their application. “The ministry told us it was the responsibility of applicants who had already received the benefit, to later return to the ministry website to make themselves aware of retroactive changes to eligibility. That is absurd,” said Chalke.
“Why would anyone who had already received a benefit later return to a website to see if new conditions had been imposed? That makes no logical sense and seeks to shift a responsibility to the public that clearly should rest with government.”
The report details that the ministry expected recipients of the benefit to subscribe to its information bulletin system to learn of changes to the program. However, the Ombudsperson’s investigation finds that even if a benefit recipient did subscribe, none of the bulletins mentioned the retroactively imposed tax filing deadline.
Ultimately, the Ombudsperson’s investigation highlights that following the ministry’s audit of benefit
recipients, thousands of British Columbians were ordered to pay back their benefit because of a new deadline that they were not aware of.
The Ombudsperson makes three recommendations to the Ministry of Finance in the report – all of which the ministry has, to date, rejected.
The recommendations are:
- Provide written notice to all affected benefit recipients that if they have filed their 2019 taxes since January 1, 2021, or agree to do so within 90 days, the ministry will return the benefit or forgive the debt owed.
- Develop and make public a review process specific to decisions to issue or recover the benefit.
- Develop a process to ensure changes to public information are clearly identified and where those changes will impact an individuals’ eligibility, communicate the information to affected individuals.
“I am encouraged that the ministry has told us that it is committing to improve its communications to the public moving forward, but I am disappointed that despite this, the ministry has, so far decided to not provide financial redress for its earlier unfair administration,” said Chalke.
“I am calling on the ministry to reconsider this decision.”
Read Report by clicking this link.