GBA-RPA 3 Navigating the Plan
Environment Module 1 Comprehensive
Questions (Frequently Tested) with
Verified Answers Graded A+
Social Security System (1-23) - Answer: A broad set of government programs/services that
provide or enhance economic security for individuals. Includes Income security programs and
Health care programs. Under the Canadian constitution, the Federal and provincial gov share
the responsibility for social security.
Income security programs - Answer: Help to maintain income after loss of earnings (retirement,
unemployment, work injury) and assistance to those unable to earn adequate income. Includes
programs such as the Old Age Security and the Guaranteed Income Supplement that help
people meet their basic needs in retirement.
Health care programs - Answer: providing publicly insured health services (including in context
of social welfare)
Principles of a Social Security System - Answer: 1. Government has a role/responsibility in
provision of social security
2. Socially desirable to redistribute income via intergenerational transfer
3. Universality
4. Acceptable to tax system as vehicle for funding social security.
Funding - Answer: Form of sponsorship. Means paying for the cost of the service provided.
Administration Sponsorship - Answer: Encompasses all functions related to delivery of programs
and services (determining eligibility, paying benefits, auditing claims, etc).
, Tax Credits (1-35) - Answer: Dollar for dollar reductions in the tax payment required - they
reduce the amount of tax owed.
non-refundable tax credit - Answer: can be used to reduce taxes payable to zero, after which
credit is lost.
Refundable tax credit - Answer: Can be paid even if there is no income tax payable
Tax deductions (1-35) - Answer: Reduce the amount of income that is taxable.
Tax exemptions (1-35) - Answer: Amounts not subject to income tax - reduce the amount of
income that is taxable.
Pay as you go funding (1-40) - Answer: The current generation of taxpayers pays for the benefits
provided to the current generation of recipients. All OAS payments under the OAS act are
funded this way.
Intergenerational transfers (1-24) - Answer: Redistribution of a portion of the present
government revenues from the younger generation to senior citizens.
Social insurance vs normal insurance (1-24/25) - Answer: Many government sponsored
programs operate under a insurance premise and have many of the same characteristics of
normal insurance, however there are differences as well.
What is the same?
• There are eligibility provisions
• Funding provisions - contributions are made to fund the program (in normal insurance, would
be premiums)
• Benefit provisions - payment is contingent upon an unexpected or unforeseen loss or event
Environment Module 1 Comprehensive
Questions (Frequently Tested) with
Verified Answers Graded A+
Social Security System (1-23) - Answer: A broad set of government programs/services that
provide or enhance economic security for individuals. Includes Income security programs and
Health care programs. Under the Canadian constitution, the Federal and provincial gov share
the responsibility for social security.
Income security programs - Answer: Help to maintain income after loss of earnings (retirement,
unemployment, work injury) and assistance to those unable to earn adequate income. Includes
programs such as the Old Age Security and the Guaranteed Income Supplement that help
people meet their basic needs in retirement.
Health care programs - Answer: providing publicly insured health services (including in context
of social welfare)
Principles of a Social Security System - Answer: 1. Government has a role/responsibility in
provision of social security
2. Socially desirable to redistribute income via intergenerational transfer
3. Universality
4. Acceptable to tax system as vehicle for funding social security.
Funding - Answer: Form of sponsorship. Means paying for the cost of the service provided.
Administration Sponsorship - Answer: Encompasses all functions related to delivery of programs
and services (determining eligibility, paying benefits, auditing claims, etc).
, Tax Credits (1-35) - Answer: Dollar for dollar reductions in the tax payment required - they
reduce the amount of tax owed.
non-refundable tax credit - Answer: can be used to reduce taxes payable to zero, after which
credit is lost.
Refundable tax credit - Answer: Can be paid even if there is no income tax payable
Tax deductions (1-35) - Answer: Reduce the amount of income that is taxable.
Tax exemptions (1-35) - Answer: Amounts not subject to income tax - reduce the amount of
income that is taxable.
Pay as you go funding (1-40) - Answer: The current generation of taxpayers pays for the benefits
provided to the current generation of recipients. All OAS payments under the OAS act are
funded this way.
Intergenerational transfers (1-24) - Answer: Redistribution of a portion of the present
government revenues from the younger generation to senior citizens.
Social insurance vs normal insurance (1-24/25) - Answer: Many government sponsored
programs operate under a insurance premise and have many of the same characteristics of
normal insurance, however there are differences as well.
What is the same?
• There are eligibility provisions
• Funding provisions - contributions are made to fund the program (in normal insurance, would
be premiums)
• Benefit provisions - payment is contingent upon an unexpected or unforeseen loss or event
