RGI simplification: What’s changing?

The new, simplified rent-geared-to-income (RGI) rules came into effect on July 1, 2020. Service managers were given the option to implement the new rules right away, or to wait until July 1, 2021 (other than the new minimum rent rule). This means, that whatever your service area, when doing reviews of RGI, housing providers must start using the new simplified rules. 

The new RGI rules are designed to make RGI rents easier for housing providers to calculate and easier for tenants to understand. Read on to see how some of the rules are changing. 

Ineligibility due to refusal of offer of unit 

Old rule

The service manager can decide how many offers a household can refuse while on the wait list for housing. Service managers may provide for circumstances where a refusal is not considered. The minimum number of refusals before a household ceases to be eligible must be three, but could be higher.  

New rule 

A household on the waiting list ceases to eligible for RGI if it refuses one offer of a unit that meets the occupancy standards and for which the household has expressed a preference. Service managers may provide for circumstances where a refusal is not considered. A refusal of a portable housing benefit is not considered a unit refusal. The service manager’s process to move overhoused households must incorporate the one offer rule. 

See HSA Reg. 367/11 Section 32.2, 38(4) for more details. 

Income exclusions 

Old rule 

See the list of 61 types of income that are excluded from RGI. 

New rule 

Adjusted family net income (AFNI) is included in RGI. AFNI is based on net income of all family members excluding: income of full-time students, net RDSP payments, and social assistance income. Net income normally matches Line 23600 of the income tax assessment and reflects the annual income expected to be received over the following 12 months. 

See HSA Reg. 316/19 Section 6, 3 (8) to learn more. 

Minimum rent 

Old rule 

The minimum monthly rent payable for an RGI unit is $85. 

New rule 

The minimum monthly rent payable for an RGI unit is $129 (indexed annually). For households paying less than $129 on July 1, 2020, the minimum monthly rent payable is $93. This transitional amount will be increased by $8 on July 1 of each year until it reaches the equivalent of the indexed amount noted above. It ceases to apply to a household if they pay more than $129 minimum rent (indexed) after July 1, 2020.  

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).  There is an exception for single benefit units in service areas that are implementing RGI simplification July 1, 2021. Minimum rent remains at $85 until first RGI simplification calculation after July 1, 2021. 

Review HSA Reg. 316/19 Section 2 (2) – (8) & Section 12 (2) for more info. 

In-year review 

The intent of the simplified RGI rules is to provide for a consistent tax-based calculation of RGI that normally changes only once a year. They allow for delayed RGI increases in response to new income in order to stabilize tenancies. 

Old rule

RGI households must report changes to information that could affect their rent or eligibility between annual reviews. 

New rule 

In-year reviews are conducted at the sole discretion of the service manager, and may occur only for the following reasons:  

• a tenant requests review due to a decrease in annual AFNI of at least 20%
• there’s a permanent change in household composition 
• a household member starts or stops being a full-time student  
• a household member starts or stops receiving Ontario Works or ODSP  
• a benefit unit has an increase in monthly non-benefit income above the non-benefit income limit 
• a household member’s income tax return has been reassessed

There is now a limit of one in-year review (between annual reviews), unless the service manager determines extenuating circumstances. In-year review due to a decrease in annual income of at least 20 per cent is limited to one without exception. 

See HSA Reg. 316/19 Section 11 to learn more. 

What you see above are just a few examples of how Ontario’s RGI rules are changing. The new rules will help simplify RGI administration; are you ready to implement them? Know when RGI simplification will start in your area.  Reach out to your service manager about their local rules and new processes and prepare your tenants for the changes.  

Check out ONPHA’s online course, The new, simplified world of RGI to work at your own pace over three months and gain in-depth knowledge of the new rules, the legislation, calculating RGI and more. Offerings of this course start in March and April. Need a more condensed, high-level overview? Check out our workshop, Forward thinking; The new, simplified RGI rules on March 10. 

Questions about RGI simplification? Contact us at member.support@onpha.org.  

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