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 April to June 2019, the maximum combined payment from OAS plus GIS is $1,499.77 ($601.45 OAS + $898.32 GIS) per month, for a single person. This maximum is reached if there is no income other than OAS and GIS. The Liberal government's platform includes increasing GIS for single low-income seniors by 10%. 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.
Income from OAS is taxable, but income from GIS, the Allowance, and the Allowance for the Survivor 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 for many people is income from line 236 of the personal income tax return, less
Each $2 of income reduces GIS by $1.
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. This will get you to a page with 2 separate forms - the application form (ISP-3025), and the instructions for the form (ISP-3025A). ISP-3025 shows, by line number from the tax return, types of income that are included and deductions that are allowed. ISP-3025A has a complete list of what is and is not included, but does not show line numbers.
The above amount of $3,500 is proposed to be increased to $5,000 by the Federal 2019 Budget, and to extend this exemption to self-employment income. It is also proposed to introduce a partial exemption of 50%, to apply on up to $10,000 of annual employment and self-employment income beyond the new threshold of $5,000 for each GIS or Allowance recipient, as well as their spouse. These proposals would enhance the GIS earnings exemption beginning with the July 20-21 benefit year. For more information see Seniors in the Federal 2019 Budget.
The following would be eligible to receive GIS in April to June 2019:
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.
Applying for OAS and GIS
Proactive enrolment for OAS and GIS was implemented in a phased-in approach from 2013 to 2016, so that applying is longer be necessary for most people. Some people still must apply for the OAS and GIS. If you can be automatically enrolled, Service Canada will send you a notification letter the month after you turn 64. See Applying for the Old Age Security on the Service Canada website.
For more information, see Guaranteed Income Supplement on the Service Canada website.
Yes, this is true even if you have capital losses carried forward that will eliminate the capital gains, and is also true of the age amount clawback. This is because the GIS amount payable is calculated based on your net income before adjustments on line 234 of your tax return. The capital losses (and non-capital losses) carried forward are deducted after this, on line 253. The total taxable income is on line 260 of your tax return. See our article on how to calculate Total Income For Tax Purposes, Net Income For Tax Purposes, and Taxable Income.
The Allowance 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 2017 combined annual income of both spouses (excluding OAS and GIS) is less than $33,456.
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 2017 annual income (again, excluding OAS and GIS, etc.) is less than $24,360. See the Service Canada web page on The Allowance for the Survivor.
Income from the Allowance is tax-free.
Allowance - Change in eligibility age
This was rescinded.
The Federal 2016 Budget proposed to increase the Guaranteed Income Supplement (GIS) top-up benefit for single seniors by up to $947 annually starting in July 2016, more than doubling the current maximum GIS top-up benefit. Single seniors with annual income (other than OAS and GIS supplement benefits) of about $4,600 or less would receive the full increase of $947. The increased benefit would be reduced above the threshold of $4,600 and will be complete phased out at an income level of about $8,400.
The Budget also proposed to provide higher benefits to senior couples who are living apart for reasons beyond their control, when they are recipients of GIS and the Allowance, by basing the benefits on their individual incomes.
The Budget also announced that the Government is looking at how a new Seniors Price Index that reflects the cost of living faced by seniors could be developed to be used as the index for increasing the OAS and GIS.
Government of Canada Resources
- Ontario Guaranteed Annual Income System (GAINS) benefit rates - includes OAS and GIS, in Excel format
Revised: June 13, 2019
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