TaxTips.ca
Canadian Tax and
Financial Information
Guaranteed Income Supplement

TaxTips.ca does not research or endorse any product   or service appearing in ads on this site.  Before making a major financial decision you  should consult a qualified professional.

Looking for US tax information?
See
USTaxTips.net

Need an accounting, tax or financial advisor? Look in our Business Directory.     Stay Connected with TaxTips.ca!  Internet Explorer - Use compatibility view for calculators to work properly!

Home
What's New
Calculators
Personal Tax
Business
Sales Taxes
Free in 30!
Financial Planning
RRSP RRIF TFSA
Real Estate
Stocks Bonds etc.
Seniors
Disabilities
Canada
Alberta
British Columbia
Manitoba
Ontario
Quebec
Saskatchewan
Atlantic Provinces
Territories
Federal Budget
Provincial Budgets
Statistics etc.
Glossary
Site Map
Business Directory
Advertise With Us
Contact Us/About Us
Links & Resources


Seniors -> Guaranteed income supplement

Guaranteed Income Supplement (GIS) for Canadian seniors, and the Allowance

Old Age Security Act Part II s. 10-18

The Federal Guaranteed Income Supplement (GIS) is available to low-income seniors living in Canada, who are receiving (or are eligible to receive) the Old Age Security Pension (OAS).  An application must be filed to receive this supplement - it is not done automatically when you file a tax return.

Once a person is receiving the GIS, it will be automatically adjusted each year after the income tax return is filed.  However, if there is a reduction in your pension or employment income, Service Canada may calculate your GIS benefit by estimating your pension and employment income for the current year, instead of using last year's pension and employment income.  If you or your spouse or common-law partner have a lower income this year for either of these reasons, you should contact Service Canada.  Your benefits may increase.

For January to March 2014, the maximum combined payment from OAS plus GIS is $1,299.40 ($551.54 OAS + $747.86 GIS) per month, for a single person.  This maximum is reached if there is no income other than OAS and GIS.

Income from GIS is tax-free.  However, it is reported on Line 146 of the personal income tax return, so is included in Line 150, Total Income for Tax Purposes and Line 236, Net Income for Tax Purposes.  It is later deducted on Line 250 of the tax return, so is not included in Taxable Income.  See our article on Taxable Income for an explanation of how this affects your income tax and income-tested benefits.

The amount of GIS payable depends on marital status and total income for the prior year.  Total income for GIS purposes is income from line 236 of the personal income tax return, less

bullet OAS and GIS income
bullet the lesser of
bullet $3,500, and
bullet your employment income minus allowable deductions including CPP or QPP contributions and EI premiums

Each $2 of income reduces GIS by $1.

The following would be eligible to receive GIS in 2014, based on 2013 income:

bullet single persons with total income less than $16,728.
bullet married/common-law couple, both OAS pensioners, with combined total income less than $22,080
bullet OAS pensioners whose spouse/common-law partner is not receiving OAS, with combined annual income less than $40,080

For exact details on what income from your tax return is included or excluded for purposes of calculating the GIS, see the GIS application form and instructions from the Service Canada OAS Forms page.  Choose form ISP3025 for the year in which you are interested.  This will get you to a page with 2 separate pdf files - the application form, and the instructions for the form.

Although the GIS is normally determined based on the previous year's income, if an OAS pensioner or spouse retires or has a reduction in income for some other reason, as per s. 14 of the Old Age Security Act, Service Canada may use an income estimate for the current year to determine eligibility.  However, if the actual income is later determined to be different from the estimated income, s. 18 of the OAS Act allows for an adjustment of the GIS paid.  This could result in additional GIS being paid, or excess GIS being deducted from future payments.

See the Old Age Security Payment Amounts to get an idea of how much you might receive from OAS and GIS.  If you receive the maximum OAS pension, the amount you might receive from GIS can be estimated using the Service Canada interactive tables of rates on the same web page.

Currently, the GIS must be applied for.  However, proactive enrolment for OAS and GIS will be implemented in a phased-in approach from 2013 to 2016, so that applying will no longer be necessary.  See Changes to Old Age Security on the Service Canada website.

For more information, see Guaranteed Income Supplement on the Service Canada website.

Allowance (ALW)

The Allowance, until April 2023, is available to 60 to 64 year old spouses/common-law partners of OAS pensioners who receive the Guaranteed Income Supplement (GIS).  The Allowance is available when 2013 combined annual income of both spouses (excluding OAS and GIS) is less than $30,912.  Starting in April 2023, the age of eligibility for the Allowance will gradually increase from 60 to 62, with full implementation by January 2029.

The Allowance must be applied for.  For more information, see Allowance Program on the Service Canada website.

Allowance for the Survivor (ALWS)

The Allowance for the Survivor may be available if your spouse or common-law partner has died, you are 60 to 64 years old, and your 2013 annual income (again, excluding OAS and GIS, etc.) is less than $22,512.  See the Service Canada web page on The Allowance for the Survivor.

Income from the Allowance is tax-free.

Allowance - Change in eligibility age

Starting in April 2023, the ages at which the Allowance and the Allowance for the Survivor are provided will also gradually increase to 62-66.  See our Old Age Security article for more information.  This will affect those born on or after April 1, 1963.

Service Canada Contacts

To contact Service Canada re GIS questions, see the Service Canada Contact Income Security Programs web page.

 

Revised: October 04, 2014

 

 

Copyright © 2002 - 2014 Boat Harbour Investments Ltd. All Rights Reserved  See Reproduction of information from TaxTips.ca

Facebook | Twitter | Google + | Monthly Newsletter Sign-up | What’s New E-mail Notification | RSS News Feed
The information on this site is not intended to be a substitute for professional advice.  Each person's situation differs, and a professional advisor can assist you in using the information on this web site to your best advantage.  See our Business Directory for tax, accounting and finance-related firms in your area.
Please see our legal disclaimer regarding the use of information on our site, and our Privacy Policy regarding information that may be collected from visitors to our site.