Hi,
Can anybody please shed any light on this situation. I think it could be too late to change anything anyway.
I have been living with my common law partner in Canada for over 12 months as a visitor from UK and applied under spousal sponsorship.
My sponsor was in receipt of welfare however she now has employment but the Welfare office said they would leave her file open and have given her 12 months of extended health and vision coverage, they said this is because she has a child, although she does not receive any payments from them.
My question is does this count as in receipt of social assistance and invalidate her eligibility to sponsor?
If so, no doubt my in-Canada application will fail. what happens then? do they immediately boot me out or can you get time to re-apply if the above situation is fixed? (I am in implied status)
This is crazy, the reason I came to Canada was to look after her and take her off welfare and give her the life she deserves, I am self supporting. Sometimes doing the right thing does not always work out that way. 
Any advice is really appreciated
Your temporary status in Canada is what allows you to remain here - not the fact that you have an inland permanent residence application in process. If your partner does turn out to be ineligible to sponsor you, they will refuse the inland application - but that doesn't mean they'll immediately boot you out of Canada. Not sure what your understanding is of "implied status" - I'm assuming it means that you had valid temporary status when you filed your PR ap, you included an extension application with the PR ap, and by now your original status in Canada has expired so (having filed an extension with your PR ap) you're under implied status until they're finished assessing the first stage of your PR ap. If that's the case, a refusal will probably also result in a refusal of your extension application and they'll want you to leave Canada.
I wouldn't necessarily jump to the conclusion, though, that she's going to be found ineligible. If she is currently employed and she included proof of that with the PR application, they might at least give her an opportunity to verify whether she's in receipt of social assistance or not. The difficult part of this is that it's pretty difficult to get any answers from CIC - she might try contacting someone at the Call Centre to see if they can give her some insight into how CIC will assess the situation.
If your inland ap does fail - I would suggest that you re-file (once the situation is "fixed", as you said) with an outland application. You can file outland even if you're still in Canada, but with an outland ap in process, if you had to leave Canada you'd be able to without it jeapordizing the application. That way, if they did ask you to leave, you could comply - and then come back again after a bit to wait out processing with your partner.
Thank you very much for the response, what you say makes perfect sense, I hope for the best and plan for the worst. If you don't mind I have I have a 2 more questions.
If I do leave Canada, file an outland application and try to return 1 month later is it likely that at the border they scan my passport and deny entry as the extension was denied and there is reason to believe I am just trying to sneak back?
If they do deny the sponsorship, would it be possible to launch an inland H&C application and re-apply for extension?
as 'experience unusual and undeserved or disproportionate hardship if you were required to leave Canada.'
It would be highly detrimental as I have no family or connections in other countries but more so for my new family, my girlfriend has a very serious medical condition and will need hospital treatments not to mention her young daughter who's father abandoned her and now looks to me for support which could become very necessary if my girlfriends health declines.
Once again thank you...
First of all, your extension would be denied only because you would have no valid reason for remaining in Canada. Unfortunately, CIC has a much narrower perspective on what's "unusual, undeserved or disproportionate hardship" than most of the rest of us would - and, really, those precepts really only come into play in cases where someone is under a deportation order, and after years and years of legal wrangling going on to try to stop the proceedings. If your inland PR application is refused, and you are asked to leave Canada (your form letter will say "immediately), you really wouldn't have a "voice" for illustrating unusual, undeserved or disproportionate hardship. As far as your question about filing a new inland application if you've been asked to leave Canada - there's are inherent problems in that plan and they are that, first, you will be telling them that you didn't comply with their demand that you leave Canada and, secondly, without valid temporary status, your new inland application would not be processed under normal timelines. It would be transferred to your local CIC office for processing and, if you're in a busy area, it could sit in a que for up to two years before they'd even look at it. In the meantime you'd be looking at an indefinite amount of time before you were even granted authorization to work (and in some provinces have health care) and you'd be unable to leave Canada without forfeiting that application.
You're not required to leave Canada in order to be eligible to apply via the outland process - and you don't keep yourself authorized to stay in Canada just by applying inland. Whether you can stay or not has everything to do with your temporary status, and if you are put in a position where you have to comply with a demand to leave, an outland PR application would not be affected by that. As far as coming back - normally PR applicants from visa-exempt countries (like the UK) are not kept from entering Canada just because they have an application in process for permanent status. If you were to leave Canada and then try to come back you would have to demonstrate (like anyone else does when trying to enter Canada) that you have the means and intent to return home at the end of your authorized stay.