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What Financial Criteria Must Be Satisfied To Qualify As a Sponsor
Sponsors Financial Responsibilities
Sponsors must show that they have the financial means to provide for all their family members, including those already residing in Canada and those they intend to sponsor. The minimum necessary income requirements are published annually by Statistics Canada in Low Income Cut Off (LICO) levels.
The general rule is that sponsors must prove that they can meet the minimum LICO test in order to be eligible to sponsor members of the family class.
However, there are exceptions to the LICO financial obligation. Exempted persons include the following:
A spouse, common law partner, or conjugal partner
A dependent biological child, where the child has no dependent children of her own
A child under the age of 18 who the sponsor intends to adopt in Canada; or
A child under the age of 18 where the sponsor is a guardian of the child
While the sponsor is not required to meet the financial obligation in these cases, however he/she must still complete a financial evaluation using CIC’s Financial Evaluation form.
Low Income Cut Off Test
The applicable LICO level is based on urban areas of 500,000 inhabitants or more, regardless of where the sponsor lives. The sponsor’s income must generally come from Canadian sources with two exceptions:
Sponsors who commute from Canada to work in the United States may use their US employment income provided that it is declared as income on the Canadian income tax return; and
Sponsors living in Canada who declare income from foreign sources on their Canadian income tax returns, may use this foreign income to meet the financial requirements for sponsorships.
Sponsors have to provide their latest Notice of Assessment from the Canada Revenue Agency to report their total income.
How is LICO Calculated
The LICO level is determined on the basis of the total number of family members. In sponsorship situations, the number of family members includes all members of a sponsor’s own family and all sponsored person’s their family members including family member listed as non-accompanying.
There is a LICO table which is updated each year on CIC website. It includes the size of the family and the minimum necessary income required.
If a sponsor is unable to meet the financial requirements prescribed under LICO, he or she may take on a co-signor to make up the difference financially. The co-signor must also sign the sponsor’s application form that includes the undertaking. A co-signor has to meet the following criteria:
Be either the spouse or common law partner of the sponsor
Meet the same eligibility requirements as the sponsor and
Assume the same obligations as the sponsor.
The co-signor and the sponsor then become jointly and severally liable if there is a default. This means that either of them may be required to pay the full amount should the other lack funds to contribute—the obligation is not divided in half. They jointly become responsible of the undertaking of the individual being sponsored.
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