Ask Member Support: minimum rent increase under the new RGI rules

Question:

Can you explain the new minimum rent rules and in particular, please clarify: 

• how rent is calculated for tenants who are currently paying less than the new minimum rent, and
• how the new minimum rent applies to Ontario Works (OW) and Ontario Disability Support Program (ODSP) recipients and how utility adjustments factor in?

Answer: 

With the introduction of HSA Regulation 316/19 on July 1, 2020, the minimum monthly payable rent for an RGI unit increased to $129. The new minimum rent will also be indexed. It will increase each year on July 1 at the rate allowed under the Residential Tenancies Act, 2006 (RTA).   

RGI households who are currently paying less than $129 will pay a transitional minimum rent of $93. This amount will also increase each year but increases will be phased-in over time.  

The new minimum rent rules are now in effect even if your service manager is not implementing the simplified RGI rules until July 1, 2021. Tenants currently paying minimum rent will not have their RGI adjusted to the new amount right away but at the first RGI review to take place after July 1st (normally the next annual review).

Increases for households currently paying less than the minimum 

Households who currently pay less than the minimum rent of $129 as of July 1, 2020 will pay a “transitional” minimum of $93. This amount will be increased by $8 annually until the amount reaches the equivalent of the indexed minimum rent noted above.  

If the utility adjustment for an RGI household brings RGI below the minimum rent, the household would pay the applicable minimum rent according to what they were paying as of July 1, 2020: 

• $129 if they were paying more than $129 at July 1, 2020, or 
• $93 if they were paying less than $129 on July 1, 2020 

Example: transitional minimum rent

You conduct an annual RGI review for a single parent household in November 2020. The tenant was paying $85 prior to the review. The tenant is a full-time student and their only source of income is OSAP which is excluded. 

The RGI is calculated at minimum rent of $93 because the tenant was paying less than $129 on July 1, 2020. 

Minimum rent for households receiving social assistance benefits 

For households consisting of only one or more social assistance recipients who pay per rent scale, the minimum rent is equal to the scale amount if the scale amount (not including the utility adjustment) is less than $129 (or the future indexed minimum rent). The only benefit units that this will currently apply to are singles on Ontario Works (OW) or Ontario Disability Support Program (ODSP). The only exception to this is in service areas where the new, simplified rules have not been implemented. According to HSA Regulation 316/19 12 (2) paragraph 4, the minimum rent for a household consisting of singles on OW or ODSP remains $85 until July 1, 2021.  

Example: RGI households receiving social assistance

A single parent on OW with two children is living in a 3-bedroom townhouse in Peterborough (Northeastern Region). The tenant is responsible for all electricity, including electric heat and electricity for hot water (with hot water heater rental). 

The OW rent scale is $226 (Note: this is NOT less than minimum rent) 

The utility adjustment is $103 ($38 hot water + $65 heat) 

RGI = $226 – $103 = $123 

If the household was paying more than $129 on July 1, 2020, RGI would be raised to the minimum rent of $129.   

If they were paying $123 at July 1, 2020, they would continue to pay $123 because minimum rent would be $93. 

Example: single person household receiving Ontario Works

At an annual review for a single person receiving Ontario Works, their RGI is the scale amount of $85 minus $63 utility allowance = $22. 

Their RGI is adjusted to the minimum rent of $85. 

The new RGI rules are meant to simplify RGI administration and help community housing providers calculate RGI rents more easily and efficiently, but it may take time for housing providers to adapt to the new rules. We recommend that you contact your service manager for more details. 

ONPHA’s new course The New, Simplified World of RGI Administration can help your team adjust to the new rules. The first course offering sold out in hours, but we encourage you to add your name to the waitlist for upcoming start dates. Contact us at education@onpha.org to inquire. 

Have questions about RGI simplification? Need help with a calculation? Contact us at member.support@onpha.org. We’re always happy to help!