Resettlement Assistance Program (RAP): Calculating the 50% additional income incentive
This section contains policy, procedures and guidance used by Immigration, Refugees and Citizenship Canada staff. It is posted on the Department’s website as a courtesy to stakeholders.
RAP allows clients to earn up to 50% of their total monthly RAP income support payment before any deduction is made to the monthly income support entitlement. Once the additional source(s) of income for the individual or family has surpassed 50% of their monthly RAP entitlement, all RAP funds over that threshold are reduced on a dollar-for-dollar basis for each dollar earned over the incentive allowance amount.
Exception: Where the employment income is earned by any member of the family attending secondary school on a full-time basis, the income is not to be included in the total of the family earnings.
Adjustments to RAP are effective every month in which the additional income is earned or received and is deducted from a following month’s entitlement. Should repayment cause hardship, deductions may be staggered over a number of months. Seasonal or irregular payment periods, where clients are not paid for their earnings within a monthly period, should be considered on a case-by-case basis on the best approach to calculate earning exceptions, with approval from the IRCC RAP supervisor/manager, and consultation with NHQ-IN as required.
If the individual is no longer in receipt of RAP, an accounts receivable overpayment account should be created through NHQ-Finance. Learn more about Overpayment of RAP.
Changes to employment status should be reported on the Change of status form.
On this page
- What is considered earned income
- Entitlements that are considered monthly income support
- Determining net employment income
- Child care expenses
- Sample calculation
- Dependent adult children reaching age of majority
What is considered earned income
Earned income is when a member of the family engages in or receives any of the following:
- Full or part-time employment
- Employment Insurance or Workers’ Compensation benefits, or both
- Training allowance
- Paid Work Experience Program
- Student loan
- Student grant or scholarship
- Student bursary or award
- Other financial resources or assets (inherited or otherwise)
- Sponsor contributions
Full or part-time employment
Employment income is:
- considered to be earned income and
- subject to the 50% rule after which earned income is deducted on a dollar-per-dollar basis
Employment Insurance or Workers’ Compensation benefits, or both
EI or Workers’ Compensation income is:
- considered to be earned income and
- subject to the 50% rule
Training allowances, which cover monthly living expenses (even if issued as a lump sum) are:
- considered to be earned income; and
- subject to the 50% rule after which earned income is applied on a dollar-per-dollar basis.
However, any special allowance intended for tuition, books, supplies or tools is not considered earned income and shall be exempt from the 50% rule.
Paid Work Experience Program
Salary is considered earned income. The 50% rule applies. Allowance for supplies and tools is exempt from the 50% rule.
Repayable student loans (including the living allowance portion) are not to be considered earned income. The 50% rule does not apply, however officers should re-evaluate the client’s need for income support in light of what living expenses are already covered through the loan.
Student grant or scholarship
Student grants and scholarships may be considered earned income. Only the living allowance portion is to be considered earned income, and subject to the 50% rule. If the grant documentation does not specify the portion for living allowance, the officer is to assume that the grant is directed at tuition costs, and the 50% rule will not apply.
Student bursary or award
Student bursaries and awards are not to be considered earned income where funds are credited against an existing Canada Student Loan or provincial loan or deposited directly with the academic institution of choice, and therefore the 50% rule will not apply. If the funds are provided directly to the student, treat them as a grant or scholarship (50% rule only applies to funds clearly allocated for living expenses).
Other financial resources or assets (either inherited or otherwise)
Inherited or otherwise-received financial resources and assets must be reported within 30 days of receipt.
Adjustments are effective on the date of receipt of such assets and calculated up to the end of the income support entitlement period.
Inherited or otherwise-received financial resources and assets that are received in a lump-sum or in irregular instalments, may be treated as personal assets for the purposes of calculating RAP benefits. Learn more through the Pro-rating and personal assets instructions.
Privately Sponsored refugees (e.g. BVORs or other cost-sharing categories) who receive financial resources from their sponsor must report these contributions to IRCC. While sponsor contributions are encouraged, and generally complement the allowances provided under RAP, the value and purpose of these supplements must still be assessed by IRCC to ensure they align with RAP policies without impacting income support benefits.
Entitlements that are considered monthly income support
The following monthly entitlements should be considered as monthly income support for the purposes of calculating the 50% incentive threshold:
- shelter and basic living allowance amounts
- housing supplement
- Transportation allowances
- Communication allowance
- Monthly dietary allowances
- Other monthly allowances (such as age of majority allowance, or fuel supplement)
One-time allowances should not be included in the calculations.
For privately sponsored cases part of a cost-sharing arrangement, only the monthly entitlements provided by RAP as per above are used to calculate the base monthly income support amount for the purpose of determining the 50% incentive threshold.
Determining net employment income
For the purposes of calculating the 50% incentive threshold, the officer is to determine the net employment income which is the gross employment income minus all mandatory tax and payroll deductions.
Child care expenses
Clients can claim a child care expense deduction against their net employment income of up to $600 per month per child under the age of 12 (receipts required).
Ahmed and Alima are parents of 3 children under the age of 12. Their monthly RAP income support entitlement is $1750. Both Ahmed and Alima work part-time. Their combined gross monthly income from employment is $2200. Their total mandatory payroll deductions amount to $450. Therefore their net income is $1750.
Their neighbour provides child care 3 days a week when Ahmed and Alima’s shifts overlap for a total cost of $400 per month.
The calculation below shows that Ahmed and Alima have earned $475 above their 50% threshold limit. As a result, their monthly RAP income support must be adjusted downwards to $1275.
Step 1: Determining the 50% Threshold Amount
Divide the client’s monthly RAP income support amount in half to arrive at the 50% threshold amount. The monthly amount used should only include portions which are received on a monthly basis.
All earned income received over this threshold, minus the child care expenses, if applicable, will be deducted on a dollar-for-dollar basis from the monthly RAP amount
- Monthly RAP amount: $1750
- 50% of RAP amount: $875
Step 2: Determining Additional Net Income
If the source of additional income is paid employment, determine the client’s new employment income (e.g., total income from employment after mandatory payroll deductions are applied). For income sources other than paid employment (e.g., training allowances or student grants, etc.), only factor in the net amounts considered earned income and subject the 50% incentive threshold.
- Gross Employment Income: $2200
- Mandatory Payroll Deductions: -$450
- Net Income: $1750
Step 3: Determining Chargeable Additional Income
Where the income source is paid employment and where applicable, subtract the maximum allowable child care deductions from the total net income to arrive at the total chargeable income. Receipts for child care expenses must be supplied.
- Net Income: $1750
- Child Care Deduction: -$400
- Chargeable Income: $1350
Step 4: Determining Earning Clawback
Determine if the recipient earned income over the threshold amount by subtracting the threshold amount from the chargeable income. If the amount is positive, a reduction will be calculated in Step 5. If the amount is negative, no reduction is charged.
- Chargeable Income: $1350
- 50% Threshold Amount: -$875
- Clawback Amount: $475
- Note: The amount cannot be less than $0, so if it is a negative value, there are no clawback deductions to RAP.
Step 5: Determining Adjusted Monthly RAP Amount
To arrive at the adjusted RAP payment, subtract the clawback amount from the total monthly RAP income support amount.
- Monthly RAP Amount: $1750
- Clawback Amount: -$475
- Adjusted RAP Amount: $1275
Dependent adult children reaching age of majority
Once the adult dependant child has been given their own file, the HOF’s employment income, if part of a separate income support file, is not considered for the purposes of the 50% additional income incentive threshold against the dependant adult’s RAP income support, and vice versa, even if they are living in the same household.
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