The Guaranteed Income Supplement (GIS) is a federal benefit offered to low-income Canadians aged 65 and over, as a supplement to the Old Age Security (OAS) pension. It aims to ensure a minimum income for seniors based on their income other than OAS.
To better understand these benefits offered by the Canada Revenue Agency, here is a complete overview of this allowance.
What is the Guaranteed Income Supplement (GIS)?
The purpose of GIS in Canada is to provide additional financial assistance to Canadian seniors who already receive the Old Age Security (OAS) pension but whose income is insufficient to cover their basic needs. It is a non-taxable monthly payment.
To be eligible for GIS, you must:
- Be 65 years of age or older,
- Be a Canadian resident,
- Receive the Old Age Security (OAS) pension,
- Have an annual income that does not exceed the government-established threshold, which varies depending on your marital status (single, married, or common-law partner).
The GIS is designed for those with low income, so your eligibility and the amount you receive depend on your other sources of income.
How is the Guaranteed Income Supplement calculated?
The base GIS amount is calculated based on the total annual income of the beneficiary, minus the OAS payments. Exact amounts vary and are adjusted quarterly (January, April, July, and October) to account for inflation.
If your income increases, the GIS amount gradually decreases and can be entirely eliminated if your income exceeds a certain threshold.
- Threshold examples (2023): for a single person, the maximum annual income to be eligible for GIS was approximately $20,832. For a couple, the combined maximum income was about $27,648 if both partners received OAS.
Note that GIS is a non-taxable benefit, which means it does not add to your taxable income.
How to apply for the Guaranteed Income Supplement?
To benefit from OAS and GIS, you can choose one of the following methods:
- Automatic application: some OAS beneficiaries are automatically enrolled to receive GIS. If you are eligible, Service Canada will inform you.
- Manual application: if you are not automatically enrolled, you will need to fill out a form to apply for GIS. This can be done online, by mail, or in person at a Service Canada office.
- Annual renewal: GIS must be renewed each year, usually during the tax return process. Service Canada uses the information from your tax return to adjust the GIS amount you receive.
Possible interactions with other benefits
The income that affects the GIS amount includes retirement pensions, investment income, and other income sources. GIS is designed to supplement these incomes up to a certain threshold.
Additionally, if you have a spouse or common-law partner who also receives OAS but has a low income, they may also be eligible for GIS. However, the amount will be calculated based on the couple’s combined income.
Specific considerations for recent immigrants
Recent immigrants to Canada may be eligible for GIS, but the benefit is often proportional to the number of years lived in Canada after the age of 18. Generally, you must have lived in Canada for at least 10 years after age 18 to be eligible for OAS and thus GIS.
Reviewing and adjusting your GIS
If your financial situation changes, such as due to the loss of income or the death of a spouse, you should notify Service Canada so your Guaranteed Income Supplement can be adjusted.
Note that if you disagree with Service Canada’s decision regarding your GIS, you can appeal.
Get advice to maximize your GIS
As you can see, the Guaranteed Income Supplement (GIS) is a crucial benefit for low-income Canadian seniors. It ensures they receive a minimum income to cover their essential needs.
It is important to check your eligibility every year and plan your income to maximize this benefit. To maximize your GIS, you can also minimize taxable income from sources such as RRSPs or investments.
Additionally, if you are married or in a common-law relationship, you might consider splitting your pension income to optimize the GIS amount you receive.
For any questions or assistance with your situation, you can consult one of our tax accountants in Montreal, or contact Service Canada.
