Tag Archives: Guaranteed Income Supplement

Retired Money: A third of OAS recipients can also expect Guaranteed Income Supplement

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My latest MoneySense Retired Money column was published today and looks at the Guaranteed Income Supplement (GIS) to Old Age Security. You can find the full column by clicking on the highlighted headline adjacent: What to expect when applying for GIS.

Service Canada says as of June 2017, 1.94 million seniors were receiving the GIS, roughly a third of the country’s 5.93 million OAS pensioners.

You can get an overview of the GIS program at the Service Canada web site. It says the first requirement to receive GIS is that you also qualify for and are receiving OAS. So that means you have to be age 65: unlike CPP (which can pay reduced benefits as early as age 60), there’s no such thing as early OAS or early GIS, except in certain special circumstances. If you were automatically enrolled in OAS, you should apply for GIS three months before your 65th birthday.

Maximum monthly GIS payments for a single is $871.86: tax-free!

How much can you receive if you qualify? Service Canada’s media relations department says that as of the July to September 2017 quarter, maximum GIS amounts for those receiving the full OAS pension of $583.74 a month are $871.86 a month for a single, widowed or divorced OAS pensioner (so adding the two, $1,455.60 a month); $524.85 if your spouse/partner receives full OAS, $871.86 if your spouse does not receive an OAS pension or the Allowance, and $524.85 if the spouse receives the Allowance.

Thresholds to qualify are very low

Of course, the fact that two thirds of OAS recipients do NOT qualify for GIS suggests that most people are unlikely to qualify: after all, GIS has been referred to in some circles as “Senior’s Welfare.”

In the case of a couple with a combined income of no more than $23,376 and where the spouse gets full OAS, the maximum monthly GIS for the other spouse is $524.85. If the partner is not receiving OAS and the combined income is no more than $42,384, the individual will get some GIS; they will get the full $871.86 monthly GIS benefit if they have no other income. In the case of a couple making no more than $42,384 and where the spouse is receiving the Allowance, the maximum monthly GIS for the other partner is $524.85. For updated numbers, click here.

Still, if you’re close to these thresholds there’s little to lose by seeing if you may qualify. It used to be that Service Canada didn’t always go out of its way to notify low-income seniors that they may qualify for GIS. This has since been rectified: free money that’s also tax free is certainly something worth investigating!

Registered Disability Savings Plans a boon to disabled

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Minister of State for Social Development, Candice Bergen.

The last of the seven eternal truths of personal finance that ran in the Financial Post in June was “Don’t say no to free money from the government.”  After it ran, I heard from a spokesperson for the federal government’s Ministry of State for Social Development. He pointed out that it might have been appropriate to mention the RDSP or Registered Disability Savings Plan, which helps families with disabled family members save in a tax-efficient manner. I agreed it was an omission and offered to run the guest blog that follows. — JC

By Candice Bergen,

Special to the Financial Independence Hub

If you have a disability or if you have a child with a disability, you should know about the Registered Disability Savings Plan (RDSP).

The purpose of the plan is to help Canadians with disabilities and their families to save for the future. The federal government also provides generous grants and bonds to help with long-term savings if eligible.

Across Canada, approximately 100,000 people are already benefiting from the program; however, estimates show that there are still more than 400,000 people who are eligible but have yet to take advantage of this plan. That’s unfortunate because it’s very easy to set up an account. In fact, all you need is a Social Insurance Number, be a Canadian resident and qualify for the Disability Tax Credit.

Once an RDSP is set up, anyone—friends or family included—can contribute to it. You can open a RDSP at a participating financial institution, such as a bank or credit union.

You can contribute as much as you want to a RDSP each year, up to a lifetime limit of $200,000. The earnings from the Plan build tax-free until taken out of the plan.

Ottawa supplements RDSP in two ways

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