The Guidelines for Applying the Financial Test

Colin R. Singer
May 16, 2021

The authorities require the financial test to prove that sponsors can support their relatives for the period of the undertaking. Sponsors in Quebec will remain subject to that province’s financial criteria as well.

The authorities require sponsors to show that they have the minimum necessary income i.e. Low Income Cut Off (LICO) for supporting the sponsored people as well as their family members in Canada or those individuals already sponsored.

The sponsor will need to:

Complete the Financial Evaluation i.e. IMM 1283E, listing all the income
Include a spouse’s or common-law partner’s income for meeting the minimum necessary income (if applicable)
- For more details, officers will need to go through the provisions specified in the section titled ‘The Guidelines for Co-Signers Included in the Financial Test’ that appears subsequently in this document i.e. section 17.1 of IP 2
Provide evidence of financial resources and,
Provide evidence of social assistance payments received

In the view of the authorities, evidence of income refers to:

The Notice of Assessment from the Canada Revenue Agency (CRA) for the most recent year of the ‘Option C Printout’ or,
Other proof of income for the 12 months prior to the application, if for instance, the sponsor is unable to provide a Notice of Assessment or the Option C printout or in case the sponsor’s income on the Notice of Assessment is insufficient

It is worth highlighting that income for the purpose of sponsorship refers to the amount shown as total income on line 150 of Notice of Assessment. It does not typically include provincial or federal benefits and social assistance payments, Employment Insurance (EI) benefits or guaranteed income supplements. The authorities require that financial resources originate from Canadian sources.

For more details, officers will need to go through the following sections:

The section titled ‘The Guidelines for Financial Requirements’ i.e. section 5.30 of IP 2
The section titled ‘The Guidelines for Calculating the Required Income’ that appears subsequently in this document i.e. section 17.2 of IP 2
The section titled ‘The Guidelines for Exemption’ that appears subsequently in this document i.e. section 17.3 of IP 2
The section titled ‘No Discretion in Calculating Minimum Necessary Income [Low Income Cut Off (LICO)]’ that appears subsequently in this document i.e. section 17.4 of IP 2
The section titled ‘The Guidelines Applicable in Case the Sponsor Cannot Request Reassessment’ that appears subsequently in this document i.e. section 17.5 of IP 2 and,
The section titled ‘The Guidelines for Determining if the Income Test is Not Met’ that appears subsequently in this document i.e. section 17.6 of IP 2

The Guidelines for Co-Signers Included in the Financial Test

The Case Processing Centre in Mississauga (CPC-M) will need to assess co-signers to ensure that they meet the sponsorship eligibility requirements prescribed in the section titled ‘The Guidelines Pertaining to Sponsors’ i.e. section 5.9 of IP 2. In particular, the authorities expect sponsors to meet the requirements tabulated below.

The Requirements	The References Related to the Requirements
Meet the requirements specified above
Submit a sponsorship application with the prescribed minimum requirements	Refer to the section titled ‘The Sponsorship Application and Minimum Requirements’ i.e. section 5.12 of IP 2
Sign an undertaking with the Minister of Immigration, Refugees and Citizenship Canada (IRCC)	Refer to the section titled ‘The Undertaking Guidelines’ i.e. section 5.18 of IP 2
Sign a Sponsorship Agreement with the sponsored person	Refer to the section titled ‘The Sponsorship Agreement Guidelines’ i.e. section 5.24 of IP 2
Not be subject to the prescribed sponsorship bars	Refer to the section titled ‘The Bars to Sponsorship’ i.e. section 5.28 of IP 2
Have the minimum necessary income i.e. Low Income Cut Off (LICO) required for supporting themselves and their family members, in addition to all sponsored persons and their family members, including any already sponsored individuals under undertakings still in effect	Refer to the section titled ‘The Guidelines for Financial Requirements’ i.e. section 5.30 of IP 2 Refer to the section titled ‘The Exceptions to the Canadian Income Rule’ i.e. section 5.31 of IP 2

Thereafter, the Case Processing Centre in Mississauga (CPC-M) will need to determine whether the co-signers qualify and can accept the consequences of co-signing. For more details on this, officers will need to go through the following sections:

The section titled ‘The Guidelines for Co-Signers’ i.e. section 5.25 of IP 2 and,
The section titled ‘The Consequences of Co-Signing’ i.e. section 5.26 of IP 2

In case the co-signer is qualified, the Case Processing Centre (CPC) will need to:

Assess the combined incomes of the sponsor and the co-signer
Apply the same methods for calculating the income described under the section titled ‘The Guidelines for Calculating the Required Income’ that appears subsequently in this document i.e. section 17.2 of IP 2
Include people on previous sponsorship undertakings signed or co-signed by the co-signer when considering the family size for the purpose of Low Income Cut Off (LICO
Include previously sponsored relatives of the sponsor’s spouse in the calculation of the minimum necessary income i.e. Low Income Cut Off (LICO) in case the spouse is co-signing and,
Ensure that the co-signer has completed and signed the required sections of the sponsorship application, the undertaking, the agreement and the financial evaluation

In some cases, the co-signer might not be qualified. In this scenario, the Case Processing Centre (CPC) will need to determine whether the sponsor meets the income test by using only the sponsor’s income.

The Guidelines for Calculating the Required Income

It is worth mentioning that the total number of people determine the amount of income required for sponsoring and determining which Low Income Cut Off (LICO) the officers will need to use.

The sponsors will need to count:

Themselves and any family members to whom they provide support
The people they are now sponsoring, including all family members of the sponsored person, regardless of whether these family members are accompanying or not – for more details, officers will need to go through the definition of ‘family member’ specified in the provisions in R1 (3)
Any people covered by undertakings that are still valid, which the sponsors have made or co-signed
People covered by undertakings that are still valid, made or co-signed by the spouse or the common-law partner (in case the sponsor’s spouse or common-law partner is co-signing) and,
Sponsored applicants who have still not received permanent residence

In some cases, the sponsor might not be able to meet the income requirement, but the calculation includes sponsored applicants who have not yet received permanent resident status. In this situation, the Case Processing Centre (CPC) will need to contact the visa office. This is to verify whether the authorities had issued visas to previously sponsored applicants or refused them.

In case the authorities did indeed issue visas to previously sponsored applicants, the officers will need to include these sponsored applicants in the calculation. As such, the sponsor will probably not meet the financial test for the new sponsorship.

In some cases, the Case Processing Centre in Mississauga (CPC-M) might receive information that there might be an event that could affect a sponsor’s financial eligibility. Such events could typically include the impending loss of work for the sponsor or the possible separation of the sponsor’s co-signer spouse. In such cases, the officer at the Case Processing Centre in Mississauga (CPC-M) will need to insert comments in the case notes at the time the file proceeds to the visa office. These notes should serve to indicate that the visa office should be aware of the potential change in circumstances of the sponsor and as such, request a reassessment, if the circumstances warrant it.

The Guidelines for Exemption

It is worth highlighting that financial requirements do not apply to sponsors of spouses, common-law partners, conjugal partners or dependent children, who do not have any dependent children of their own, children seeking adoption and children under their guardianship.

As such, when they assess the eligibility of sponsors of the above family members, the Case Processing Centre in Mississauga (CPC-M) and the Case Processing Centre in Vegreville (CPC-V) will not need to consider the financial test. Despite this, the sponsors of these family members will need to complete the financial evaluation and sign the undertaking and the agreement. This would serve to make them promise to provide for the basic requirements of the sponsored family members. Situations could arise where the sponsored person has dependent children who have children of their own. In this scenario, the officers will need to calculate the financial test for all the family members.

Note:

The authorities could refuse the sponsored family member for financial reasons
This would usually be the case if an officer, at the visa office, Port of Entry (POE) or the Case Processing Centre in Vegreville (CPC-V), does not feel satisfied about the following aspects:
- The fact that the sponsor has not made adequate arrangements for the care and support of the sponsored family member or,
- The fact that the sponsored family member will not be able to support themselves and their family members
This is in accordance with the provisions specified in A39

No Discretion in Calculating Minimum Necessary Income [Low Income Cut Off (LICO)]

The Case Processing Centre (CPC) will need to consider only the sponsor’s and co-signer’s income when it evaluates the sponsor’s financial situation.

It is worth highlighting that people who do not meet the Low Income Cut Off (LICO) will not be able to sponsor even if they have good employment prospects, extensive assets or relatives willing to provide additional support.

The Guidelines Applicable in Case the Sponsor Cannot Request Reassessment

Not all sponsors will be able to meet the prescribed Low Income Cut Off (LICO). These individuals will not be able to request reassessments of their financial situation after giving their undertaking. In addition, these individuals will not be able to ask the authorities to consider income earned after these individuals have submitted their undertaking.

Sponsors who submit a financial evaluation after failing the financial requirement for the undertaking will need to submit a complete new application to sponsor. In addition, they will need to pay a new processing fee.

The Guidelines for Determining if the Income Test is Not Met

The authorities consider that the sponsor does not meet the income requirement in case:

The sponsor’s income is not at least equal to the Low Income Cut Off (LICO) or,
The income is not from a Canadian source and the sponsor has not included it in the Notice of Assessment