Garnishment and Pension Diversion Updates

Summary#

This is a proposed set of regulatory changes that update three federal rules to match amendments from Bill C-78 (royal assent June 21, 2019). The changes mainly make it easier and faster for provinces and territories to enforce support orders: they allow electronic filing, remove some document-certification and affidavit requirements, set a clear end point for wage garnishment, and update where to send applications. The proposals were published on August 29, 2020 and were open for comment for 30 days after that publication.

What it does#

• Licence denial rules

  • Changes the Denial of Licences for Family Orders and Agreements Enforcement Regulations so licence-denial requests no longer require a sworn affidavit or strictly prescribed forms. Instead, the rules list the information needed and allow a form approved by the Minister of Justice.
  • These licence-denial changes are linked to legislative steps expected to come into force on or about November 12, 2021.

• Wage garnishment rules

  • Updates the Garnishment and Attachment Regulations to reflect new wording and definitions in the Garnishment, Attachment and Pension Diversion Act.
  • Allows documents and responses to be sent by agreed electronic means (not just paper or fax).
  • Specifies that a garnishee summons (one that orders salary withholding) stops binding the Crown or parliamentary employer six months after the former employee’s last salary was paid.
  • Adds an address for serving documents on the Parliamentary Budget Officer and moves registry responsibility for the three territories to the National Capital Region to centralize work and reduce duplication.
  • Updates the standard application form to reflect the new definitions and the Parliamentary Budget Officer.

• Pension diversion rules

  • Changes the Pension Diversion Regulations so a provincial enforcement service (PES) can apply for diversion of federal pension benefits on behalf of a support creditor using a copy of the support order (not necessarily a court-certified copy) plus a required statement of arrears.
  • Keeps a certification requirement when individuals apply directly, but removes it when a PES applies.
  • Allows pension diversion documents to be sent by agreed electronic means.
  • Expands which pension plans and benefit situations are covered (including certain Canadian Forces and Reserve plans) and updates the list of life-insurance deductions to remove outdated plans and add the Public Service Management Insurance Plan and a general RCMP life-insurance reference.
  • Updates the mailing addresses for pension centres and adds reference to prothonotaries where relevant.

Who's affected#

• Provincial enforcement services (PESs) — they will likely see less paperwork and fewer court steps when applying for licence denial, garnishment or pension diversion on behalf of support creditors.
• Support creditors (people owed child or spousal support) and their representatives — may get enforcement actions started faster because PESs can submit uncertified orders and statements of arrears.
• People who owe support (debtor/payors) — may face quicker or more automated enforcement, and wage garnishments will clearly stop after six months from last pay in a job.
• Federal departments, Crown entities and parliamentary offices — compensation and pensions offices will receive and act on documents in the updated ways, including by electronic means.
• Small-volume territorial registries and their staff — the registry function for Nunavut, Northwest Territories, and Yukon would move to the National Capital Region.
• Department of Justice, pension centres and parliamentary entities involved in processing these files.

If it is unclear who will be affected in a specific case, the changes mainly affect the organizations that process and act on garnishment, pension diversion and licence-denial requests.

Why it matters#

• It cuts red tape: removing the need for affidavits and certified court copies in many cases means enforcement can start sooner and cost less.
• It uses technology: allowing agreed electronic submission of documents should reduce paperwork, postage and processing time, and lower risk of lost documents.
• It fixes a gap: setting garnishment to end six months after the last salary prevents old, forgotten summonses from unexpectedly binding a new employer or department.
• It helps get money to people sooner: simplifying pension diversion and garnishment procedures aims to speed payments to support recipients.
• There are social effects to note: government analysis says over 90% of payors are men and over 90% of recipients are women, so changes that make enforcement easier are likely to affect men and women differently in practice (for example, more pressure on payors; possibly steadier support income for recipients).