Each year when preparing personal tax returns, I seem to be completing more applications for the Guaranteed Income Supplement (GIS). The GIS provides money to low-income seniors, living in Canada, in addition to their Old Age Security Pension. Now whether this is because my client base is becoming older and/or the need is now greater is really irrelevant. The point is that there are a lot of seniors living on the poverty line and these funds are necessary for their day to day living.
What is Old Age Security?
OAS is a pension paid monthly and available to most Canadians. You may receive this pension whether you are still working or have never worked. An application must be completed to receive these benefits.
To be eligible you must be living in Canada and;
- 65 years of age or older
- You must have lived in Canada for at least 10 years after turning 18
- Be a Canadian citizen or legal resident at the time your pension application is approved
If you live outside Canada, you still may qualify if you meet the following requirements:
- 65 years of age or older
- You must have lived in Canada for at least 20 years after turning 18
- Been a Canadian citizen or legal resident of Canada the day before you left Canada
If neither of the above scenarios apply, there is still the possibility of receiving OAS if a social security agreement is in place with the country pertaining to your history.
You should apply for your OAS pension 6 months before you turn 65. To get an application form you can go to a Service Canada Centre or print one from the website by clicking here.
For more information concerning calculation of pension benefits, payments, income tax implications and numerous other topics, go to Service Canada website for answers to these and other OAS questions. You will find the link by clicking here.
What is the Guaranteed Income Supplement?
The GIS is a benefit that you may be eligible to receive, only if you are currently receiving the OAS pension. You must complete an application form to initially apply. To reapply, you need to continue to file your personal income tax returns by April 30. To receive an application form call 1.800.277.9914 (TTY: 1.800.255.4786)
If you did not qualify for a GIS benefit in the past, but you think you might be eligible now, you should apply as soon as possible. There is no cost involved to apply.
The amount you could receive is based on your age, marital status and income from the previous year. Service Canada has a great website that helps you determine, based on income, what monthly OAS and GIS payments you may be eligible to receive. Here are the tables of rates.
There is also an Allowance for those aged 60 – 64 with details and rates included on the website.
From the CRA website, is a list of what is considered income and determining eligibility for the GIS and Allowance.
When applying for the GIS benefit, you, and in the case of a couple, you and your spouse or common-law partner, must report the following income:
- Canada Pension Plan or Quebec Pension Plan benefits
- private pension income and superannuation
- foreign pension income
- RRSPs that you cashed during the year
- Employment Insurance benefits
- interest on any savings
- any capital gains or dividends
- income from any rental properties
- any employment income minus allowable deductions including your Canada Pension Plan and/or Quebec Pension Plan contributions and your Employment Insurance premiums. Subtract the lesser of the result of the calculation or $3,500;
- income from other sources such as workers’ compensation payments, alimony, etc.
Benefits received from the Old Age Security program, including the Guaranteed Income Supplement and the Allowance, are not included as income.
For more information on getting the greatest tax credits, deductions, pension splitting and other topics of interest go to the government website for Seniors. You will find the link here.
It’s important that we take care of Canada’s valuable assets.
Education is the best provision for the journey to old age. – Aristotle
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Until next time,