Estimated Income (Parents and Spouses)
Note: Eligibility for Canada Student Grants is based on previous year’s income only, as per federal requirements. There is no review of Canada Student Grant eligibility based on estimated current year income.
A student may request that his/her financial need be assessed using parental or spousal estimated current year income rather than actual previous year income when the estimated income would be a better indicator of the family’s current financial situation because of non-recurring and major changes to the parental or spousal income.
Examples of non-recurring major changes to income can include, but are not limited to:
- death of a parent or spouse;
- separation or divorce of parents results in change in employment of custodial parent;
- loss of full-time employment by parent or spouse;
- loss of job and re-employment at lower rate of pay;
- illness or accident;
- retirement of parent or spouse;
- events that resulted in a significant one-time increase to the previous year income, such as receipt of a severance package.
- significant change in annual income related to self-employment (e.g., farming or any other type of self-employment where income fluctuates significantly and income in previous calendar year is significantly higher expected in current year and in the previous two years).
A request to use estimated income cannot be considered if the circumstance is recurring (with the exception of self-employment where income may fluctuate significantly from one year to the next and the fluctuations may be recurring) or does not constitute a major change in parental/spousal income (e.g., overtime wages).
- Completed OSAP Application Update: Request to used Parent's Estimated Income form, or
- Completed OSAP Application Update: Request to use Spouses Estimated Income form; and
- Letter from the parent(s) or spouse explaining the non-recurring and major change in income that would substantiate using an estimate of the parent(s) or spouse’s current year income rather than actual previous year income;
- Substantiating documentation for the explanation provided;
- Documentation for the amount of parental or spousal current year income-to-date.
Note: A request to use estimated income cannot be considered if the circumstance is recurring or does not constitute a major change in parental/spousal income (i.e., overtime wages).
Where a review based on estimated income is approved, the reassessment based on lower estimated income may also alter a student’s eligibility for Ontario Access Grants. No special steps are required of the FAA for this to occur. The Ministry will estimate the net income and determine Ontario Access Grant eligibility. However, as per federal requirements, eligibility for the Canada Student Grants is based on actual previous year income only. Therefore, Canada Student Grant eligibility will continue to be based on actual previous year income even if an overall reassessment is based on estimated current year income.
Verification of Estimated Income
The ministry will verify the estimated current year income with Canada Revenue Agency (CRA) when the income tax information becomes available. The student’s current OSAP application will be reassessed at that time. The student will be responsible for the repayment of any loan or grant overaward that may be generated from this reassessment.
Second Career or Ontario Skills Development Funding
Where the parent/spouse receives Second Career or Ontario Skills Development funding in the current year, the FAA may use the estimated current year’s parental/spousal taxable and non-taxable income in the OSAP assessment. Income from Second Career and/or Ontario Skills Development must be included in this estimate.
The following types of income should not be included in estimated parental or spousal income:
a) Income from federal support programs
Payments received through the following federal programs:
- Universal Child Care Benefit,
- Indian Residential School program, and
- Hepatitis C Compensation program; or
- First Nations/Inuit Land Claim Settlements.
b) Income from provincial support programs
Payments received through the following provincial programs:
- Ontario Child Benefit,
- Ontario Children Benefit Equivalent program,
- Rental Opportunity for Ontario Families (ROOF) program, and
- Transplant Patient Expense Reimbursement program.
c) Pain and suffering awards
Pain and suffering awards, including the general damages component of personal injury awards and WSIB Non-economic loss (NEL) awards, in amounts less than $100,000 are exempt from income. Any amount over $100,000 is considered income in the period it was received. If payments are made for different incidents, the payments related to each incident are exempt up to $100,000.
d) Locked-in retirement savings
Students and their spouses, if applicable, are not expected to report funds that are invested in a locked-in retirement savings account (i.e., Locked-in Retirement Account (LIRA), a Life Income Fund (LIF), and/or a Locked-in Retirement Income Fund (LRIF)) as an asset on the OSAP application.
However, once a student/parent/spouse withdraws any money invested in these accounts as per the fund’s usual withdrawal age, he or she must report the amount withdrawn as income on the student’s OSAP application.
Note: A locked-in retirement savings account is an account into which an individual's pension benefit is transferred when the individual terminates their membership in a registered pension plan. The money payable to the individual from this locked-in account can be used only to provide retirement income and is therefore locked-in until the individual reaches the age of 55. In Ontario, there are three types of locked-in accounts: Locked-in Retirement Accounts (LIRA), Life Income Funds (LIF), and Locked-in Retirement Income Funds (LRIF).
Special Access to Locked-In Retirement Account
Students and their parents or spouse, if applicable, who gain special access to money invested in any of these Locked-In Retirement accounts prior to the usual withdrawal age (e.g., age 55) are not to report the amount withdrawn on the student’s OSAP application as income.
If a student, their parents or spouse have reported income that was withdrawn under special access (e.g., to cover uninsured medical costs), the student may request a review to remove the income.
- Proof of the amount withdrawn from the fund and proof that it was withdrawn under a circumstance of special access;
- To ensure the student is not disadvantaged when income is verified with CRA, the FAA must add explanatory note to the file.
e) Treatment of split pension income
If the parent(s) or spouse of a student is splitting pension income, the amount to be reported on the LEI form should be an “estimate” of their total income, less any pension income that they believe they will be splitting with the other parent/student. The declared information will be verified upon the completion of the income verification process for the current year.
f) Spouse or parent unable to sign documents
If a spouse or parent is unable to complete the Consents, Declarations, and Signature pages due to medical reasons or illiteracy, every effort should be made to have the spouse or parent use his or her mark (e.g., an X) and have that mark witnessed. There is no common law requirement for any particular form for a signature. Anything capable of linking a person with a text can be a signature, if done with the intent to create that link.
The person witnessing the mark must be someone other than the immediate family, including the student. The printed name of the witness and an address at which they can be contacted must be provided and retained on the student's file. The witness is attesting that they believe the signatory understands and agrees to the sections being signed.
If a power of attorney is in place, the person holding the power of attorney can sign for the spouse or parent.
A spouse or parent who resides outside of Canada is required to complete the applicable sections. There is no allowable review for exclusion of the signatures based on the fact that the spouse or parents does not reside in Canada, unless Canada Post has indicated that mail is not being received in that country due to civil unrest. Students who make this claim will be required to produce documentation from Canada Post stating that mail cannot be delivered to that specific country.
If a signature is missing for any reason other than the situations described above, the case must be submitted to MAESD for review. It should not be anticipated that many other situations will be considered; however, extreme circumstances are considered (e.g., spouse cannot be reached because they are in a refugee camp).
g) Married student changes status to separated and sharing marital home with spouse
Married students may indicate that they are separated, and wish to apply for OSAP funding as a single independent student or a sole support parent, while continuing to live in the marital home with their ex-spouse. Typically, the couple will indicate that they are remaining together in the same home for the sake of the children or for financial reasons.
- Copy of a separation agreement or custody and support agreement;
- If the student and spouse do not have a formal separation or custody agreement, the student must provide a description of their informal agreement, signed by the student and the spouse, and an affidavit signed by both the student and the spouse confirming the custody arrangement of any dependent children;
- Notice to CRA (e.g., proof of having filed taxes as separated; in the case of the recent separation, proof of having given notice to CRA that they intend to file taxes as separated and proof of notifying CRA of who will claim child tax credits/benefits).
Note: in these cases, the requirement that the spouse sign the above documents cannot be waived (e.g., for reasons of an adversarial relationship).