CANADA Law and Practice Contributed by: Ian Hull, Suzana Popovic-Montag and Nick Esterbauer, Hull & Hull LLP
provide a benefit to a beneficiary with a disability with - out negatively affecting their eligibility for government benefits and subsidies. The use of Henson Trusts to preserve disability-related benefits was endorsed by the Supreme Court of Canada in SA v Metro Vancou- ver Housing Corp , 2019 SCC 4. 8.2 Appointment of a Guardian If a person possesses the mental capacity to appoint a power of attorney for property and/or personal care, the appointment will have a legal effect similar to appointing a guardian, without the related cost and time associated with a court application seeking such an appointment. Guardians appointed by court order are supervised by the courts and may be required to bring an application to pass their accounts in respect of the management of the incapable’s property on a periodic basis. As fiduciaries, guardians are accountable for all transac - tions attended to on behalf of the incapable person and may be personally liable for any breach of their duty to the incapable. In December 2022, New Brunswick became the first province in Canada to enact legislation that permits individuals to appoint different levels of decision-mak - ing support. 8.3 Elder Law Government Assistance in Respect of Financial Planning for Longer Lives Canada Pension Plan During working years, contributions to the CPP are deducted from employment income payable to Cana - dians. These benefits are normally received from the age of 65 onwards. Individuals who have worked in Canada can elect to begin receiving CPP payments (of a reduced amount) as early as the age of 60, or can defer receipt of benefits through the CPP beyond the age of 65 and then receive higher payments. Spouses can choose to split CPP benefits, so that lower income is allocated to each spouse in situations where one spouse receives considerably greater CPP payments than the other.
The government is also doing more to protect employ - ees’ pension contributions. In April 2023, the Pension Protection Act was enacted to ensure that pension plan deficits will be paid in priority to most other credi - tors if an employer goes bankrupt. Old Age Security Two other income sources may be available to sen - iors through the federal government, depending on their level of income. OAS is available to Canadians who reside in Canada and are aged 65 and over. The amount of the OAS benefit received will reduce with higher levels of net income. Guaranteed Income Supplement (GIS) The GIS may be available to supplement OAS pay - ments for low-income seniors. The income of the applicant and their spouse will be considered in deter - mining eligibility for GIS. For Canadians without a private pension or assets generating investment income, CPP, OAS and GIS payments may represent the bulk of annual post- retirement income. Recent and Proposed Changes to Assist Older Canadians CPP expansion When the CPP was first established, a higher percent - age of Canadians had defined-benefit pension plans, upon which they could rely for a regular, monthly cheque following retirement. As many Canadians no longer have defined-benefit plans, the CPP is being enhanced to increase the annual payout to 33% of pre-retirement income. The portion of income cov - ered by the CPP is also increasing, which will allow Canadians with higher income levels to earn greater CPP benefits. To fund the CPP expansion, contributions from employers and taxpayers are being increased gradu - ally between 2019 and 2025. The Quebec Pension Plan is available to Canadians who only work in Que- bec and is being enhanced in a similar manner. Continued income splitting for seniors Notwithstanding the elimination of most forms of income splitting, post-retirement income splitting
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