CITATION: Ontario (Disability Support Program) v. Ansell, 2011 ONCA 309 |
DATE: 20110421 |
DOCKET: C52794 |
COURT OF APPEAL FOR ONTARIO |
Laskin, MacPherson and LaForme JJ.A. |
BETWEEN |
The Director, Ontario Disability Support Program, Ministry of Community and Social Services |
Appellant |
and |
Jocelyn Ansell |
Respondent |
Daniela Bertossi, for the appellant |
Cynthia Wilkey and Jackie Esmonde, for the respondent |
Heard: February 23, 2011 |
On appeal from the order of the Divisional Court (Harper, McCartney and McGarry JJ.), dated February 1, 2010, with majority reasons by Harper J. |
Laskin J.A.: |
[1] The respondent, Jocelyn Ansell, is 21 years old. She has Asperger’s syndrome, a form of autism. She lives with her mother. Her father pays her mother court ordered child support of $800 per month.
[2] When Jocelyn turned 18, she applied for income support under the Ontario Disability Support Program Act, S.O. 1997, c. 25, Schedule B (“ODSPA”). To be eligible for income support, she had to satisfy a medical criterion and a financial criterion. The Director of the program determined that she met the medical criterion: she was a person with a disability. However, the Director determined that she did not meet the financial criterion because her income – calculated as “all payments of any nature paid to or on behalf of or for the benefit of” Jocelyn – exceeded her budgetary requirements. The Director concluded that the child support paid to her mother was income paid on behalf of or for the benefit of Jocelyn. Since the child support payments exceeded Jocelyn’s budgetary requirements, she was not eligible for income support under the program.
[3] On appeal, the Social Benefits Tribunal reversed the Director’s decision. The Tribunal held that the child support payments were not income attributable to Jocelyn. The Tribunal’s decision was upheld by a majority of the Divisional Court. The Director sought and obtained leave to appeal to this court. The sole issue on the appeal is whether the Tribunal and the Divisional Court erred in law in holding that the child support paid to Jocelyn’s mother is not income paid on behalf of or for the benefit of Jocelyn. In my opinion they did not err. I would dismiss the Director’s appeal.
[4] Jocelyn Ansell was born in 1989. Her parents separated in 2002, when she was 12 years old. Jocelyn’s mother claimed that her husband was abusive and refused to recognize their daughter’s disability. Since separation, Jocelyn has lived with her mother. She goes to school full time in a special education program.
[5] In 2004, Jocelyn’s mother left the workforce to care for her daughter. The child support order, which lies at the heart of this appeal, was made in July 2005. The order is based on the Child Support Guidelines, O. Reg. 391/97. Under the order, Jocelyn’s father is required to pay Jocelyn’s mother child support of $700 monthly plus an additional $100 monthly for extraordinary living expenses under s. 7 of the Guidelines. The father’s obligation ends if, among other things, Jocelyn stops going to school full time, stops living with her mother or her mother dies.
[6] A major symptom of Asperger’s syndrome is an obsessive interest in a single subject. Jocelyn’s interest is in horses. To channel this interest in a therapeutic direction, Jocelyn’s mother bought Jocelyn a special needs horse and enrolled her in Parelli training, a type of horse training that can serve as a form of therapy. Parelli training has benefited Jocelyn. But it is costly. Her mother pays $619 a month for the costs associated with this therapy.
[7] Jocelyn’s mother supports her daughter’s disability in other ways. She takes Jocelyn to her psychiatrist every other day, to her horse therapy 16 times a month and to her family doctor every six months. Jocelyn’s mother also pays for her daughter’s ongoing behavioural therapy.
[8] Because she no longer works, Jocelyn’s mother relies on the child support payments from her former husband to pay for Jocelyn’s disability related expenses, especially the horse therapy.
[9] The purposes of the ODSPA, which are set out in s. 1, emphasize that support for the disabled is a shared responsibility of families and government:
1. The purpose of this Act is to establish a program that,
(a) provides income and employment supports to eligible persons with disabilities;
(b) recognizes that government, communities, families and individuals share responsibility for providing such supports;
(c) effectively serves persons with disabilities who need assistance; and
(d) is accountable to the taxpayers of Ontario.
[10] In Tranchemontagne v. Ontario (Director, Disability Support Program), [2006] 1 S.C.R. 513, at para. 3, Bastarache J. noted this shared responsibility when he wrote about the difference between the ODSPA and the Ontario Works Act 1997, S.O. 1997, c. 25, Schedule A, which provides financial assistance to persons in need:
It is clear that the ODSPA and the OWA are meant to serve very different goals. The former statute is meant to ensure support for disabled applicants, recognizing that the government shares in the responsibility of providing such support (ODSPA, s. 1). The latter statute, on the other hand, seeks to provide only temporary assistance premised on the concept of individual responsibility (OWA, s. 1). The divergent purposes of these two statutes was alluded to by the Honourable Janet Ecker, the Ontario Minister of Community and Social Services, on the day after the ODSPA was proclaimed:
This new program removes people with disabilities from the welfare system, where they should never have been in the first place, and it creates for them an entirely separate system of income support. . . .
[11] Regulation 222/98 of the ODSPA sets out the financial eligibility criteria for obtaining income support and the rules for calculating the amount of support. The general rule for calculating eligibility for income support is found in s. 29(1) of the Regulation:
29(1) The amount of income support for a benefit unit shall be calculated on a monthly basis by determining the budgetary requirements of the benefit unit in accordance with sections 30 to 33.1, reducing that amount in accordance with sections 33.2 to 36.2 and subtracting from that amount the income of the benefit unit, determined in accordance with sections 37 to 43.
In Jocelyn’s case, no reductions under ss. 33.2 to 36.2 apply. Her income support, therefore, equals her budgetary requirements minus her income.
[12] Sections 30 to 33.1 of the Regulation prescribe monetary limits for categories of budgetary requirements. The category applicable to Jocelyn is that of a single person receiving board and lodging, as she receives food and accommodation from her mother. At the time of the Director’s decision denying Jocelyn income support, the maximum support payment for her category was $746 per month. It has since increased to $805 per month.
[13] Importantly for this appeal, under the regulatory scheme, an adult disabled person (18 years and older) is entitled to apply independently for income support – that is as a sole member of a “benefit unit” – even if she is living with a parent. Jocelyn took advantage of this entitlement. She applied in her own right for income support. The Director assessed her as an independent adult and not as a dependent of her mother. However, under s. 37(1) of the Regulation – the key provision on this appeal – any payments to her or on her behalf or for her benefit constitute income and so, under s. 29(1), they must be deducted from the income support otherwise payable to her:
37(1) Subject to sections 38 to 43, income shall be determined for a month by adding the total amount of all payments of any nature paid to or on behalf of or for the benefit of every member of the benefit unit during the period determined by the Director.
The Director maintains that the child support payments are income attributable to Jocelyn under s. 37(1).
[14] Sections 41, 42 and 43 of the Regulation list a lengthy series of exemptions – payments that are not to be included in an applicant’s income. These exemptions have a sound rationale: to provide numerous ways for governments and families to support disabled persons without disentitling them to disability benefits. Child support payments, however, are not included in the list of exemptions, a fact relied on by McGarry J. in his dissenting reasons in the Divisional Court and by the Director on this appeal. I will deal with this matter later in my reasons.
[15] Turning to the exemptions, s. 41(1) lists exempt payments by the Ontario government, and s. 42 lists exempt payments by the Government of Canada. Section 43 lists other payments that are not to be included in income. Many of these other exemptions provide ways for a parent to make payments to a disabled child without affecting the child’s entitlement to income support.
[16] Three exemptions under s. 43 have some bearing on this appeal. Section 43(1)(9) exempts gifts or other voluntary payments of an unlimited amount as long as they are applied to expenses for disability related items and approved by the Director of the program:
43(1) The following shall not be included in income:
…
9. Payments from a trust or from a life insurance policy, gifts or other voluntary payments, that are applied to,
i. expenses for disability related items or services for a member of the benefit unit that are approved by the Director and that are not and will not be otherwise reimbursed, or
ii. education or training expenses that are approved by the Director and that,
A. are incurred with respect to a member of the benefit unit because of that person’s disability, and
B. are not and will not be otherwise reimbursed.
[17] A payment made pursuant to a court order is not a voluntary payment. Section 43(1)(9.1) of the Regulation, however, exempts court ordered payments for disability related items:
9.1. Payments, other than payments under paragraph 9, that are made pursuant to a court order or under a government funded program and that are specifically made for a purpose listed in paragraph 9 and are applied to that purpose.
[18] In addition, s. 43(1)(13) of the Regulation exempts voluntary payments up to a maximum of $6,000 over 12 months:
13. Payments in addition to a payment under paragraphs 1 to 12 that are payments from a trust or life insurance policy or gifts or other voluntary payments up to a maximum of $6,000 for any 12-month period.
[19] Jocelyn’s mother uses most of the child support payments she receives to cover her daughter’s horse therapy and other disability related needs. If Jocelyn’s father had voluntarily paid for the horse therapy sessions directly or if he had obtained a child support order that specifically stated his payments were to be used for Jocelyn’s disability related expenses, then his payments would, without question, have been excluded from Jocelyn’s income. But he refused to do either. He simply will not recognize that his daughter is disabled.
[20] The sole question on this appeal is whether the Tribunal and the majority of the Divisional Court erred in law in refusing to characterize the child support paid to Jocelyn’s mother as income attributable to Jocelyn.
[21] In support of his appeal, the Director relies on the broad scope for determining income under s. 37(1) of the Regulation: “all payments of any nature paid to or on behalf of or for the benefit of” Jocelyn. The Director supports this argument by reference to the principles governing child support in the family law context. Child support is the obligation of the parents and the right of the child. The duty to support the child is a duty owed to the child, not to the other parent: see Richardson v. Richardson, [1987] 1 S.C.R. 857, at para. 16.
[22] The Director also relies on case law that has interpreted the phrase “on behalf of” to include payments made by a third party, which, though beyond the recipient’s control, nonetheless are attributable to the recipient. Finally the Director submits that the absence of child support from the lengthy list of exemptions in s. 43 of the Regulation is telling. The Director contends that, implicitly by their decisions, the Tribunal and the majority of the Divisional Court have created a new exemption, a matter reserved for the Governor-in-Council or the legislature.
[23] Jocelyn, through her counsel, submits that child support must be looked at in two stages. At the first stage, child support is paid to Jocelyn’s mother. At the second stage, Jocelyn’s mother may give Jocelyn, or use for her benefit, some or all of the child support. Jocelyn contends that the Director wrongly focuses on the first stage, whereas the relevant stage for determining her income under s. 37(1) of the Regulation is the second stage. As Jocelyn’s mother uses all the child support for expenses related to her daughter’s disability, the payment of all or at least most of these expenses would not be included in Jocelyn’s income because they would attract the exemptions in s. 43(1) of the Regulation.
[24] Jocelyn buttresses her argument with two other submissions: the Director’s position unfairly discriminates against single parent households – a result that ought to be avoided in characterizing the child support payments – and it undermines the notion of shared responsibility, a cornerstone of the ODSPA.
[25] I substantially agree with Jocelyn’s position. As both sides acknowledge, the issue is one of statutory and regulatory interpretation. The basic principle of statutory interpretation is well established. The words delineating the scope of “income” in s. 37(1) of the Regulation must be “read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of [the legislature]”: see, for example, Re Rizzo & Rizzo Shoes Ltd., [1998] 1 S.C.R. 27, at para. 21.
[26] Here, context is especially important. “Income” must be interpreted, not in the family law context, but in the context of the ODSPA and its regulatory framework. In this context, “income” does not include child support. To hold that it does would be inconsistent with an important element and an important objective of the ODSPA, and would produce a result that unfairly discriminates against disabled children of separated parents.
[27] The ODSPA recognizes the right of disabled adults to apply in their own right for income support. This is a fundamentally important element of the statute. It furthers one of the program’s underlying purposes: to effectively serve persons with disabilities who need assistance (see s. 1(c) of the ODSPA).
[28] Although Jocelyn lives with her mother and her mother receives child support, Jocelyn has an independent right under the ODSPA and the Regulation to apply for income support. The Director recognized her right to do so because Jocelyn was assessed as an independent adult. Thus, for the purpose of calculating her entitlement to income support, she alone is a “benefit unit”. Her mother is not included in that unit. Characterizing child support paid to her mother as income to Jocelyn is inconsistent with this important element of the statutory scheme This inconsistency is evident from an examination of the features of the child support payments to Jocelyn’s mother:
· The child support order itself stipulates that the support is paid to Jocelyn’s mother, not to Jocelyn;
· The order does not say how Jocelyn’s mother is to spend the money. Thus, although she voluntarily uses the money for disability related expenses, the order does not require her to do so;
· Jocelyn’s mother is not required to account for how she spends the money;
· Jocelyn’s mother must report the child support as income on her personal income tax return. Jocelyn does not report the payments on her own return;
· The child support payments are tied to Jocelyn’s mother. They end if she dies;
· Jocelyn is not a party to the court order and has no legal right to enforce it.
[29] These features show that, in her mother’s hands, the child support payments are not Jocelyn’s income. Jocelyn has no legal entitlement to them, no ability to access them, and no control over how they are spent. Her mother could use the child support to repair the roof, pay a hydro bill or buy a new television set. Although these expenditures might be said to benefit Jocelyn indirectly, they are not the kind of expenditures that would be characterized as income attributable to Jocelyn under s. 37(1) of the Regulation. They are not payments to her or on her behalf or, at a practical level, even for her benefit.
[30] In short, although the payment of child support is a duty owed to Jocelyn, it does not necessarily follow that all, or even any portion of it can properly be characterized as payments to her or on her behalf or for her benefit. To include child support as income under the Regulation could deprive applicants of disability benefits under the ODSPA, even though none of the child support is used for the applicant’s benefit.
[31] Instead of focusing on the child support payments themselves, the Director should focus on what Jocelyn’s mother does with these payments. Only when Jocelyn’s mother decides to use the support payments for Jocelyn’s benefit do they potentially become income attributable to Jocelyn under s. 37(1) of the Regulation and deductible under s. 29(1). However, when Jocelyn’s mother uses the child support for her daughter’s benefit – in this case, to pay for her daughter’s disability related expenses – the exemptions in s. 43(1) are engaged. Because of the applicable exemptions, Jocelyn need not account for expenses related to her disability, such as the cost of her horse therapy, when calculating her income under s. 37(1). She could rely either on the exemption for voluntary payments for disability related items (to a maximum of $6,000 over 12 months) or obtain the Director’s approval for these expenses. There is nothing to suggest that the Director would have withheld this approval.
[32] In oral argument, the Director submitted that being required to go behind the child support payments to determine how they were used would be administratively unwieldy. I do not agree with this submission. As I have mentioned, several of the exemptions in s. 43(1) of the Regulation require the Director’s approval. Section 43(1)(9), which I quoted earlier, is one such exemption. To give this approval, the Director or his staff must presumably examine individual expenditures. Indeed, as counsel for Jocelyn pointed out, the very nature of the disability support program demands that case workers scrutinize many pieces of financial information. Scrutinizing the use of child support payments would not make the program any more unwieldy than it already is.
[33] Yet in taking the position that all child support payments are payments “to or on behalf or for the benefit of” the applicant, the Director has made an unwarranted assumption about how these payments are actually used. What’s more, the Director’s position does not give effect to one of the important elements of the ODSPA – to allow disabled adults to apply for benefits on their own behalf. On the Director’s view, payments that are not used for the applicant’s benefit could nonetheless be included in the applicant’s income. Only after examining how the payments are in fact used can the Director determine if they, or any part of them, may qualify as income. The Director must then consider if they fall under any of the exemptions in the Regulation.
[34] Under s. 37(1) of the Regulation, an applicant’s income includes not only payments to her but also payments on her behalf or for her benefit. Child support is not paid to Jocelyn. The Director submits, however, that the payments are made on her behalf or for her benefit. For this submission the Director relies on case law interpreting the phrase “on behalf of.”
[35] The Director refers in particular to two cases, a decision of this court, Wedekind v. Ontario (Ministry of Community & Social Services) (1994), 21 O.R. (3d) 289 (C.A.), and a decision of the Divisional Court, Peel (Regional Municipality, Department of Social Services Administrator) v. Moschella (1996), 133 D.L.R. (4th) 599 (Div. Ct.). In both cases the court held that certain payments made to a third party were made “on behalf of” the recipient and so had to be included in the recipient’s income. These cases, and others like them, are easily distinguishable from the present case.
[36] In Wedekind, for example, the applicant Ms. Wedekind, a disabled married woman, applied as a person in need for an allowance under the Family Benefits Act, now replaced by the ODSPA. On appeal she argued that only the net amount of her husband’s benefits, after deducting income tax – and not the gross amount – should have been included in her family income. This court disagreed with Ms. Wedekind’s contention. Griffiths J.A. wrote that the income tax paid to Revenue Canada was paid “on behalf of the applicant”. To hold otherwise would render those words “meaningless”. In the Moschella case, the court dealt with a similar issue under the General Welfare Assistance Act, and came to the same conclusion. In addition to arguing that income tax should have been excluded in his income calculation, the applicant in Moschella argued that payments garnished to cover his child support obligations, as well as amounts deducted due to a previous overpayment of benefits, should have also been excluded.
[37] The Director in the present case maintains that similar reasoning applies to the child support payments. In Wedekind and Moschella, the Director says, the payments were not made directly to the applicant but were made to Revenue Canada on the applicant’s behalf. They nonetheless had to be included in the applicant’s family income for the purpose of determining whether the applicant was entitled to an allowance because they were made “on behalf of” the applicant or the applicant’s spouse. The Director says that although Jocelyn’s father did not pay the child support directly to Jocelyn, he nonetheless paid it to her mother on Jocelyn’s behalf and therefore it must be included in Jocelyn’s income.
[38] Wedekind and Moschella differ from this case in three significant ways. First, in Wedekind, the income of the applicant’s spouse was part of the calculation of the applicant’s family income. As pointed out by Griffiths J.A., the key phrase in the relevant provision was “‘received by or on behalf of’ an applicant or the spouse of the applicant” (emphasis added.) In Ms. Wedekind’s case, the same concern about upholding a disabled person’s right to apply for benefits independently did not arise and so that could not have been a consideration in the court’s analysis. Here, Jocelyn alone is the “benefit unit”. In Wedekind, it was both Ms. Wedekind and her spouse.
[39] Second, in both Wedekind and Moschella, an intermediary had a legal obligation to deduct at source income tax owing on the unemployment insurance benefits and remit the tax to Revenue Canada to discharge the applicant’s (or spouse’s) personal tax liability. In the present case, Jocelyn’s mother is also an “intermediary” but she has no legal obligation to pay any of the money she receives from her former husband for Jocelyn’s benefit or on Jocelyn’s behalf.
[40] Finally, what these cases establish is that “on behalf of” can be widely interpreted to mean any payment made by an intermediary in order to discharge an applicant’s financial obligation, for example, tax liability, debt or even child support. As stated by the Divisional Court in Moschella, “[T]he principles set out in Wedekind with respect to including in income amounts redirected to pay debts are applicable to income tax, support payments and the recovery of unemployment insurance overpayments.” It does not follow, however, that the child support payments made by Jocelyn’s father to her mother could be characterized as made “on behalf of” Jocelyn, as the Director contends. Jocelyn is not the one with the legal and financial obligation to make the child support payments; it is her father. Her father makes child support payments to her mother on his own behalf, because child support is his obligation. Child support payments ought properly to be characterized as made “on behalf of” the individual who has the obligation to make them.
[41] This does not mean, however, that a portion of that payment could never be characterized as an amount paid “on behalf of” Jocelyn. If, for example, Jocelyn’s mother uses the child support she receives to fulfill a financial obligation for Jocelyn, say, by paying off her debts, then that amount could be a payment made by her mother “on behalf of” Jocelyn. But even in this example, what matters is how her mother uses the money. The child support payments from Jocelyn’s father to her mother do not automatically become payments on Jocelyn’s behalf.
[42] Admittedly, the calculation of Jocelyn’s income in s. 37(1) is even broader than payments made on her behalf. It includes payments made for her benefit. Payments that do not discharge an obligation Jocelyn may have incurred may still be for her benefit. Again, however, the focus must remain on how Jocelyn’s mother uses the child support payments she receives from Jocelyn’s father. The payments alone do not qualify as payments for Jocelyn’s benefit.
[43] Neither the breadth of the phrase in s. 37(1) of the Regulation nor the cases interpreting “on behalf of” assist the Director.
[44] Characterizing the child support paid to her mother as Jocelyn’s income undermines the objective of shared responsibility, which is a cornerstone of the ODSPA, and unfairly discriminates against Jocelyn because her parents are separated. I illustrate this discrimination by comparing Jocelyn’s situation with that of a disabled young adult who also independently receives income support but who lives with both her parents while going to school.
[45] A disabled adult independently receiving income support under the Act and living with both parents enjoys the standard of living produced by her parents’ income. If her parents use their income to repair the roof, buy a new computer or replace their old television set, these expenditures, though benefiting everyone in the family, including the disabled adult, would not be considered in the calculation of the disabled person’s income under s. 37(1) of the Regulation. The disabled adult would have no concern that any portion of these expenditures, made to benefit everyone in the family, would reduce or eliminate her income support.
[46] A separated custodial parent of a disabled adult attending school usually depends in part on the payment of child support to financially maintain the household. If the Director’s position is upheld, however, even though the custodial parent uses the child support to repair the same roof, buy the same new computer or replace the same television set, those expenses would in effect become the disabled adult’s income under s. 37(1) of the Regulation and reduce or eliminate entirely her income support.
[47] Harper J. writing for the majority of the Divisional Court, at para. 39, recognized the unfairness of the Director’s position and its inconsistency with the shared responsibility between government and families that underpins the ODSPA:
It is our view that it would be inconsistent with the intent of the ODSPA to establish a partnership between government and families that would fairly contribute to children with disabilities, to attribute income to a child as a result of a child support order. Child support is intended to allow children who find themselves in a separated family to continue to live at a standard consistent with each parent’s financial resources. It would be inconsistent and unfair to give an interpretation of “income” that allows children in an intact family to live at a standard consistent with both parents’ financial resources without any deduction to their ODSP and require a deduction of child support to a child form a separated family. The whole purpose of the support is to ensure the standard, as best as can be possible, remains the same for those children.
[48] I agree with his analysis. He relied, as do I, on the words of Gillese J. in Gious v. Ontario (Ministry of Community and Social Services Income Maintenance Branch) (1999), 131 O.A.C. 72 (Div. Ct.). In considering the meaning of “income” in the Family Benefits Act, Gillese J. said at para. 8, “We ought not to construe the word ‘income’ in a way which causes logical inconsistencies in the legislation, or that results in unfair treatment among recipients of social assistance.” Her words apply with as much force to the treatment of “income” under s. 37(1) of the Regulation.
[49] The decisions of the Tribunal and the majority of the Divisional Court put disabled adults who apply independently for income support on the same footing, whether they live with two parents, or like Jocelyn, with one parent. These decisions allow payments from Jocelyn’s mother to be eligible for the same exemptions available to other disabled recipients. And these decisions allow Jocelyn’s mother to continue to use the child support to pay for her daughter’s horse therapy and other disability related items, without impairing Jocelyn’s eligibility for income support.
[50] McGarry J. supports his dissent by noting that child support is not included in the lengthy list of exemptions from the calculation of income in the Regulation. The Director argues that, by holding that child support payments are not income attributable to Jocelyn, the Tribunal and the majority of the Divisional Court have created a new exemption, one not provided for in the ODSPA or the Regulation.
[51] Respectfully, this argument is circular because it assumes the answer to the very question we must decide: whether child support paid to Jocelyn’s mother should be included in Jocelyn’s income. On my analysis, child support need not be included as part of Jocelyn’s income under s. 37(1) of the Regulation. Thus no exemption is needed. I would not give effect to the Director’s argument.
[52] The sole question on this appeal is whether the Social Benefits Tribunal and the majority of the Divisional Court erred in holding that, for the purpose of calculating Jocelyn Ansell’s eligibility for income support, the child support paid to her mother is not income attributable to her. In my opinion, they did not err. I would dismiss the appeal. On the agreement of the parties I would make no order for costs.
RELEASED: Apr. 21, 2011 “John Laskin J.A.”
“JL” “I agree J.C. MacPherson J.A.”
“I agree H.S. LaForme J.A.”