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Guaranteed Income Supplement (GIS) Guide

Guaranteed Income Supplement (GIS) benefit plays an important part in retirement income for many low-income seniors in Canada. From eligibility requirements and payment amounts to what to expect when applying, this guide shares everything you need to know.

According to the CIBC Retirement Poll, Canadians are most likely to rely on government benefits during retirement years.

Computer, chart and calculator with abbreviation GIS that stand for Guaranteed Income Supplement

At age 65, people with little or no income other than the Old Age Security pension may get an extra monthly benefit called the Guaranteed Income Supplement (GIS).

What is the Guaranteed Income Supplement?

The Guaranteed Income Supplement (GIS) is a non-taxable monthly payment provided to 65-year-old low-income seniors receiving an Old Age Security (OAS) and living in Canada. The maximum amount you can get is based on your household income and changes every year.

Just like the OAS, GIS benefits are not tied to employment so you can still collect them if you’re still working or have never been employed. GIS is funded by the government’s general revenues.

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.

Who Gets the Guaranteed Income Supplement in Canada?

To be eligible for the GIS benefit, you must be receiving the Old Age Security pension & meet the income requirements explained below.

  1. Already getting the Old Age Security (OAS) pension
  2. You are 65 or older and live in Canada
  3. Your household income is lower than the maximum monthly amount allowed.

What Is Considered Income for Guaranteed Income Supplement (GIS) In 2022

To qualify for GIS, you must currently be receiving OAS and your annual income (or combined annual income in the case of couples) must be lower than the maximum annual thresholds as follows (2022 amounts):

  • Single/divorced/widowed $19,656
  • The couple/spouse receives full OAS, $25,968, the combined income
  • The couple/spouse does not receive OAS or allowance, $47,136, the combined income
  • The couple/spouse receives the allowance, $47,136, the combined income

Once your income/combined income exceeds these thresholds you will not qualify for GIS. If you have elected to defer your OAS payment, you will not be eligible for GIS.

For information regarding the GIS income eligibility, refer to the GIS tables provided by Employment and Social Development Canada.

  • The income limits in the table for GIS apply to seniors who qualify for full Old Age Security (OAS). This means that you have lived in Canada at least 40 of the 47 years between your 18th and 65th birthdays.
  • You can get partial OAS if you have lived fewer years in Canada. In these cases, the income limits may be higher.
  • Low-income people who will get partial OAS should also apply for GIS! They may get extra GIS benefits to make up for their partial OAS pension.
  • As of July 2022, Old Age Security for people 75 and over will increase automatically by 10%.

GIS FOR NEW IMMIGRANT

If you are sponsored immigrant and lived in Canada for less than 10 years after age 18, you CAN NOT receive the Guaranteed Income Supplement while you are sponsored unless your sponsor:

  • Suffers personal bankruptcy
  • Is imprisoned for more than 6 months
  • Is convicted of abusing you
  • Dies

If you are not sponsored immigrant, you could receive the Guaranteed Income Supplement (GIS) if you receive the Old Age Security (OAS) pension.

Guaranteed Income Supplement GIS Amount You Can Get Monthly In 2022

The Guaranteed Income Supplement amount is calculated each July based on your net income in the previous calendar year. Payments can increase, decrease, or even stop according to changes in your annual net income.

Each July, you will receive a letter that tells you the new amount of your monthly payment or the reasons why your GIS benefit has stopped.

Maximum monthly GIS amounts for individuals receiving the maximum OAS are below (2022 amounts):

  • Single/divorced/widowed $968.86
  • A couple/spouse receives full OAS, $583.20
  • A couple/spouse does not receive OAS or allowance, $968.86
  • A couple/spouse receives the allowance, of $583.20

For information regarding the GIS amount for your specific income level, refer to the GIS tables provided by Employment and Social Development Canada.

Many mistakenly believe that if they can just keep their income below $17,699 they will therefore get the maximum monthly GIS of $871.86.
You get the maximum if you have zero income apart from OAS but if you have other income, including CPP, Service Canada says that for singles, the widowed, and the divorced, the maximum monthly GIS is reduced by $1 for every $2 of extra monthly income. For couples, both receiving OAS, the maximum monthly supplement for each is reduced by $1 for every $4 of their combined monthly income.
For EXAMPLE: If you exceed $17,688 you will not be eligible for GIS at all, while if you’re just under the threshold you may get “a few pennies.”

🖋 NOTE: To stay in good standing with Service Canada, you need to be scrupulous in filing your annual Tax and Benefit return to the Canada Revenue Agency every April. Ottawa wants to make sure you don’t exceed the maximum permitted annual income. And naturally, Ottawa wants to be informed if either spouse dies.

What Is Considered Income for Guaranteed Income Supplement?

When applying for the GIS benefit you 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 $5,000;
  • Income from other sources such as workers’ compensation payments, alimony, etc.

The following payments, contributions, and deductions are not counted as income:

  • Payments form OAS, GIS, Allowance, or Allowance for the Survivor
  • CPP or QPP contributions and your EI premiums
  • CPP or QPP contributions and your EI premiums of net self-employment income
  • Deductions like union dues, RRSP deductions, moving expenses, and other employment expenses.

You can also earn up to $5,000 and still receive the full Guaranteed Income Supplement benefit if you are employed or self-employed. When earnings fall between $5,000 and $15,000, your GIS will be reduced by 50 cents for every dollar of income you receive.

How Do You Calculate GIS?

GIS is calculated based on your household’s previous year’s taxable income. Not all income is included in this calculation—most inheritances, lottery winnings, TFSA withdrawals, your OAS, and the GIS itself are excluded.

The actual amount of GIS is determined using a set of complex rate tables, available on the Old Age Security Payment Amount page.

Guaranteed Income Supplement Clawback

Currently, GIS recipients can earn up to $5000 of employment income without affecting their GIS pension. However, if they earn more, the GIS is reduced by 50% of the excess earnings. That’s a steep clawback.

The exemption amount was increased from $3,500 to $5,000 by the Federal 2019 Budget and the exemption is extended to self-employment income beginning with the July 20-21 benefit year. 

The amendments also include 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.  This would increase the maximum total exemption for employment and self-employment income to $10,000. 

For more information see Improving the Economic Security of Low-Income Seniors in the Federal 2019 Budget, and the definition of “income” in the Old Age Security Act section 2.

GIS Exemption and Clawback Examples:

The following examples apply to start with the July 20-21 benefit year:

EXAMPLE 1: Seniors with $4,000 of employment income plus net self-employment income less CPP and QPP contributions and EI premiums would have an exemption of $4,000, and thus would have no clawback.
EXAMPLE 2: Senior with $8,000 of employment income plus net self-employment income less CPP and QPP contributions and EI premiums: exemption of $6,500 ($5,000 + $1,500*). *$1,500 is the lesser of $5,000 and 50% x ($8,000 – $5,000). excess subject to clawback is $8,000 – $6,500 = $1,500. GIS would be clawed back by $750, which is 50% x $1,500.
EXAMPLE 3: Senior with $16,000 of employment income plus net self-employment income less CPP and QPP contributions and EI premiums: exemption of $10,000 ($5,000 + $5,000*). *$5,000 is the lesser of $5,000 and 50% x ($16,000 – $5,000). excess subject to clawback is $16,000 – $10,000 = $6,000. GIS would be clawed back by $3,000, which is 50% x $6,000.

How To Apply for Guaranteed Income Supplement?

▪ If you were automatically enrolled in OAS, you will be automatically enrolled in GIS.

🖋 NOTE: When you first apply for OAS, a question on the application form asks if you also want to apply for GIS. If you answer “Yes,” you will be mailed a separate application for GIS.

▪ If you did not receive an automatic enrollment letter, you will need to apply either online by accessing your My Service Canada Account, or by mailing the paper application to Service Canada.

🖋NOTE: To apply online for GIS you must: Be at least 1 month past your 64th birthday.

▪ If you were not eligible for GIS when you first applied for OAS but become eligible later, contact Service Canada to request an application for GIS.

▪ Once you are receiving GIS, you renew your benefit automatically each year simply by completing your income tax return.

Guaranteed Income Supplement application

Applications are done online. You can also submit a paper application using Form ISP-3550 (OAS and GIS) and Form ISP-3023 (GIS only).

Before you start, make sure you have the following information.

  • Social Insurance Number (SIN)
  • Information about your spouse or common-law partner (if applicable)
  • Information about the countries you lived in since age 18
  • Your bank details so you can sign up for a direct deposit
  • The date you would like your GIS payments to begin

If you are married, you may be asked to provide a marriage certificate. If you are living with a common-law partner (same-sex or opposite-sex) you may be asked to complete and sign a “statutory declaration” and provide other supporting documentation.

🖋 NOTE: Once you start collecting the GIS, remember to file your taxes by the deadline every year to prevent payment disruptions.

Guaranteed Income Supplement Payment Dates

If you are eligible for the GIS benefit, Service Canada will add it to your Old Age Security (OAS) pension payment each month.

Payments usually arrive on the last three banking days of each month.

  • If your payment is late by more than a week, or if you lose your payment, please contact OAS at 1-800-277-9914 (TTY: 1-800-255-4786).
  • If you apply late and are eligible to receive the GIS, you may receive a retroactive payment of up to 11 months plus the month in which Service Canada receives your application.

Can Guaranteed Income Supplement Benefits Stop?

Guaranteed Income Supplement stops if one of the following happens:

  • You do not reapply by filing a tax return by April 30 of each year.
  • You do not submit an application form when asked to do so.
  • Your income, or the total income for you and your spouse or common-law partner, is more than the maximum amount allowed.
  • You leave Canada for more than six months in a row.
  • You die.
  • If your spouse or common-law partner is receiving the GIS or the Allowance, payments may continue, based on his or her income.
  • GIS will stop if you’re incarcerated for more than two years.

Questions And Answers

Is The Guaranteed Income Supplement Based On Net Income?

The Guaranteed Income Supplement amount is calculated each July based on your net income in the previous calendar year.


Will Guaranteed Income Supplement Get Cost-Of-Living Increases?

Yes, GIS payments will reflect any increases in the cost of living as measured by the consumer price index. Any necessary adjustments are made every three months: January, April, July & October.


Does CPP And OAS Count as Income For GIS?

Benefits received from the Old Age Security program, including the Guaranteed Income Supplement and the Allowance, are not included as income.


What makes the GIS different from OAS?

The big difference is the income tests that apply to each of them. For seniors receiving the full amount of OAS, there is no reduction in OAS benefits until net income reaches $79,054 (in 2022).
The GIS reduction, by contrast, is 50 cents on the dollar and it starts from the first dollar of countable income, which includes CPP income, other monthly income like a pension, or an RRSP cash-out. For most people, the reduction starts very quickly. For example, no GIS is available to a single senior after $19,656 in yearly income (not counting OAS).


Does RRIF Income Affect GIS?

Your RRIF withdrawals are affecting your GIS. Any income from an RRIF is considered taxable income, while income from a TFSA is not taxable income. Ideally, this is something to recognize around age 60, which gives time to develop a solution.


Is Guaranteed Income Supplement Taxable?

GIS benefit is not taxable income. However, you must still report it on your tax return.


Can I get GIS if I have RRSP?

You can still get GIS if you have money saved in RRSP, only your RRSP withdrawals will affect your GIS.
If you have an RRSP, you will pay income tax on RRSP withdrawals from the plan which will trigger a GIS benefit clawed back — and possibly other income-tested benefits as well.
Sooner or later, every dollar you withdraw will reduce your GIS by 50 cents. If you will be eligible for GIS upon retirement avoid RRSPs or deplete existing RRSPs before reaching age 65 (when GIS eligibility begins).
In other words, RRSP savings serve little effective purpose for low-income retirees because nearly all their registered savings are clawed back directly through taxes and indirectly through benefit reductions.


Can I get GIS if I have TFSA?

Because TFSA withdrawals are not included in net income for tax purposes, they are not considered in determining eligibility for income-tested benefits, such as OAS, the GIS, the goods and services tax (GST) credit, and the age credit.


Capital Gains Can Reduce Your GIS

Yes, this is true even if you have capital losses carried forward that will eliminate the capital gains.
The GIS amount payable is calculated based on your net income before adjustments on line 23400 (line 234 prior to 2019) of your tax return.  The capital losses (and non-capital losses) carried forward are deducted after this, on line 25300 (line 253 prior to 2019).  The total taxable income is on line 26000 (line 260 prior to 2019) of your tax return. 


Can Both Spouses Receive Guaranteed Income Supplement

You and your partner may qualify for GIS benefits if you qualify for OAS. Entitlement to the GIS is based on the couple’s combined net incomes the previous calendar year.
However, OAS and GIS payments are made to each individual beneficiary.


Can I Receive GIS Outside Of Canada?

GIS is payable only if you reside in Canada. Under the OAS Act, residing in Canada means that you “make your home in Canada and normally live in Canada.”
🖋 NOTE: However, GIS is payable for temporary absences from Canada, up to six consecutive months in duration. If you do stay outside Canada for longer than six months, you can re-apply when you return to live in Canada.


What Happens If I Move?

If you are planning to move, you must contact OAS with your new address and postal code as soon as possible to make sure that your payment arrives on time. Even if payments are deposited directly into your bank account.
You can notify Service Canada of a change of address by calling the automated telephone system at 1-800-277-9914. 

CONCLUSION

Ultimately, GIS is a savor for seniors who are retiring without savings with retirement income from Government.

“Life for the elderly is filled with uncertainty, dependency, and horror. When you get old, you are without income, without hope. Only the lucky few have pensions.” – by Thomas P. O’Neill, Jr., former Speaker of the House in the United States.

I hope this post successfully armed you with the knowledge about Government Income Supplement (GIS).

Do you have any questions about GIS in Canada? Let me know in the comments!

As always, I’d love to hear from you! Have a fabulous week and take care! Irina Nikitina – Founder of Modern Fifty TV

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