The Corporation of the TOWN OF MILTON

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1 ABBREVIATED COUNCILLOR RESPONSE REPORT Report to: Chair and Members of the Administration and Planning Committee From: Linda Leeds, Director, Corporate Services & Treasurer Date: November 12, 2007 Report No. CS Subject: Tax Assistance for Low Income Seniors or Persons with Disabilities RECOMMENDATION: THAT Staff Report CS regarding Councillor Best inquiry on the matter of property tax assistance programs for seniors be received for information. EXECUTIVE SUMMARY As a follow-up item from the October 22, 2007 Council meeting, staff was to provide information relating to the existing program for low income seniors and persons with disabilities. In addition to the provision of this information, staff has also provided comments relating to other options for low income seniors or persons with disabilities. Background There are two types of property tax assistance programs for low income seniors or persons with disabilities. Mandatory Deferral Program: Governed by S. 319 of the Municipal Act, this provincially mandated tax deferral program must be made available to all eligible property owners. A detailed outline of the program is found under the discussion section of this report. The mandatory deferral program has been in effect since 1998 and the Town has not received any applications to date. Optional Loan/Grant Program: Authorized either by S. 365 of the Municipal Act or pursuant to the Municipal Elderly Residents Assistance Act, RSO. 1990, these programs can be enacted at the discretion of local Council. The content, and eligibility requirements of such a program are flexible

2 Page No. 2 and can be in the form of either a deferral or a grant. The Town does not have an assistance program of this nature in place. Discussion Regional Seniors / Disabled Persons Tax Deferral Program The Province of Ontario requires municipalities to provide for the relief in respect of all or part of the tax increases for 1998 and following years on residential/farm property for eligible low-income and disabled property owners. This program has been enacted by the Region of Halton and provides a tax deferral for all property tax increases resulting from reassessment programs to eligible low income senior and disabled property owners. This program is pursuant to and governed by Halton Region By-law Nos , 74-01, and The program is administered by the Local Municipalities. Eligibility Seniors must be at least 65 years of age as of December 31 st of the most recent reassessment year Disabled persons, at least one spouse or same sex partner, must qualify for disability benefits under government programs such as, but not limited to, Ontario Disability Support Program (ODSP), Canada Pension Plan Disability Benefit, and/or private insurer plans, or provide proof of eligibility for the Disability Tax Credit Have a combined family income to an upset limit of $40,000 per annum Criteria Qualifying property must be owned by the applicant and be their principle residence Eligible tax increases is the tax related increase resulting from reassessment in the years that reassessment occurs with a tax increase impact of greater than 5% or $100 The accumulated value of the deferral plus all interest charges cannot exceed 75% of the current value assessment of the property The amount of the deferral and all accrued interest charges shall be registered on title, any charges relating to the registration on title shall be added to the amount of the property tax deferral The amount of the deferral plus all accrued interest charges and the charges related to the registration of the lien shall become payable in full upon title change or the applicant (including

3 Page No. 3 spouse or same sex partner) no longer resides at the property as a principle residence or when eligibility for tax deferral no longer applies to the applicant Although the mandated deferral program has been in place for almost a decade and is advertised through a variety of sources each year, staff has yet to receive an application. Feedback, obtained by tax staff, indicates that the registration on title (along with the associated fees), as well as the fact that the assistance must be paid back and that interest will be levied on the deferred amount are the main deterrents. Staff supports the concept of financial support for low-income seniors and disabled persons; it is the opinion of staff that the administration of social assistance programming should be implemented at the Provincial level in the form of a credit as part of the annual income tax return. Locally administered property tax loan or grant program The Town of Milton does not currently have a locally administered loan/grant program in place. Staff has surveyed other municipalities within the GTA and has determined that most have implemented a grant program ranging from $ $ per annum to qualified applicants. The City of Mississauga is the exception as they offer a yearly interest free loan of $ Municipality Population Enrolments in Mandatory Deferral Program Locally administered Grant/Loan Program Yearly Amount Estimated number of enrolments Estimated Annual Grant funding required Milton 63,000 0 N0 $ $ 0.00 Halton Hills 52,000 0 Grant $ $ 26, Oakville 165,000 2 Grant $ $ 46, Burlington 164,000 0 Grant $ $120, Brampton 434,000 0 Grant $ unavailable $ unavailable Caledon 58,000 0 Grant $ $ 48, Mississauga 668,000 0 Interest Free Loan $ $ 77,500.00

4 Page No. 4 Funding and Administration Municipal Elderly Residents Assistance Act, RSO Each of the Municipalities surveyed above, with the exception of the Town of Oakville, administer their loan/grant program pursuant to the Municipal Elderly Residents Assistance Act, RSO Costs for this program would need to be included as a budget item. Rebates issued under this Act cannot be shared with the Region or the Schoolboards; they are fully funded at the local level. Generally, eligibility is determined under the following criteria: Be 65 years of age or more by April 30, 20XX, which is the last day for filing applications for the year 20XX. Be in receipt of the monthly guaranteed income supplement as provided under Part II of the Old Age Security Act (Canada) Occupy the property on which the municipal taxes are imposed Have been continuously assessed as the owner of such property for at least 1-5 (discretionary) year(s) immediately preceding the date of application. The administration process for such a program is burdensome and the Town must fund all associated costs. S. 365 of the Municipal Act A program enacted under S. 365 of the Municipal Act allows for automatically sharing with the Schoolboards but costs would only be shared with the upper-tier should the Region choose to pass a similar by-law. Section 365 requires annual by-laws to be passed by respective Councils in order to maintain the sharing of costs. Funding for this program is also generated as a budget item and would need to be included into the tax rate calculation. S. 365 (1) states: The council of a local municipality may, in any year, pass a by-law to provide for the cancellation, reduction or refund of taxes levied for local municipal and school purposes in the year by the council in respect of an eligible property of any person who makes an application in that

5 Page No. 5 year to the municipality for that relief and whose taxes are considered by the council to be unduly burdensome, as defined in the by-law. The definition of unduly burdensome is determined by Council and includes eligibility criteria such as combined household income levels and age. For comparison purposes only, the Town of Oakville has set their criteria as follows: The annual tax reduction grant is in the amount of $ To be eligible, the property owner(s) must be at least 65 years old and the current combined household income cannot exceed $23,944. Verification is based on the annual Federal Notice of Assessment The administration process for a grant program under S. 365 of the Municipal Act is completed fully at the local level. Costs for the grants provided reduced under this program option as they are shared with the school boards. Financial Impact There is no financial impact at this time. Respectfully submitted, Linda Leeds, CGA Director, Corporate Services & Treasurer LL:lp If you have any questions on the content of this report: Lesley Payton, ext Attachments: n/a CAO Approval: