Tag Archives: budgets

What is the Guaranteed Income Supplement, GIS, and Will I Get It?

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Canada has two income support programs for older persons which have similar sounding names: the OAS and the GIS. The Old Age Supplement, OAS, is a payment made to older Canadians based on how long they have lived in this country. But what is the GIS and who gets it?

Guaranteed Income Supplement, GIS, is a Minimum Income Guarantee

First just let me say I hope you don’t ever get the GIS. I’m not being mean. It’s just that only people with a very low income get it.

The strange name for this payment is an attempt to summarize why it exists. The GIS was and is intended to “top up” an elderly person’s income to a minimum level. It is intended to “guarantee” elderly people have enough money to survive on. (Not live on, mind you, just survive.)

The amount of GIS a person can receive is based on their income from all sources.

In 2013, the GIS is intended to ensure a single elderly person has an income of  $16,679.99 plus the OAS.

Why was the GIS Introduced?

One major reason that GIS was needed is that many pensions, especially private employment pensions, are not indexed for inflation. When inflation was in the 8-12% range for several years, that meant a person’s pension dropped in real value by 20-60%! A pension that seemed quite reasonable at retirement could no longer pay even the basic bills.

According to the History of Pensions, in 1967, in an attempt to reduce elderly poverty the GIS was introduced as a temporary measure. It soon became permanent.

The Maximum Income You Can Have and Still Get GIS Payments Varies for Singles and Couples

The income test changes each year based on inflation and other factors. Check the Service Canada website for the most recent limits.

The following limits were in effect in October 2014:

For single persons including widows and widowers:
“If your yearly income exceeds $17 088, you do not qualify for the Guaranteed Income Supplement.”

For married and common law partners, both receiving the OAS:
“If your combined yearly income exceeds $22 560, you do not qualify for the Guaranteed Income Supplement.”

For married and common law partners, where the other partner is not receiving the OAS:
“If your combined yearly income exceeds $40 944 you do not qualify for the Guaranteed Income Supplement.”

Am I Eligible to Get the GIS?

To be eligible to receive the GIS, you need to

  • be eligible and receiving the OAS
    (that means you have to have been a resident of Canada for a certain number of years after you turned 18; be 65-67 or older; etc.)
  • have a low income below the threshold. If married or living common law, there is a different threshold for the combined income of the spouses or partners.
  • apply each year by sending in a form or by completing and filing their federal annual income tax return by April 30

The eligibility rules for sponsored immigrants are complicated. If you are in this category, please contact Service Canada for a detailed explanation.

What “Income” Does the CRA Count When Deciding Who is Eligible to Get the GIS?

The “income” the CRA uses to decide if you are eligible to receive the GIS is a bit different than the “income” you report on your tax return.

According to the Service Canada website for GIS calculations, income includes
all the sources of income reported on your tax return

  • earnings-related retirement pension income
  • foreign pensions
  • interest income
  • dividend income
  • rent income
  • wages (you are allowed to earn $3500 a year though and to contribute to CPP and EI without penalty)
  • worker’s compensation payments, etc.

If in doubt, you can contact Service Canada to inquire about the details.

Is the GIS Taxed?

Unlike the OAS, the GIS is not taxed!

Can I Get the GIS If I Leave Canada?

No. You can get payments for 6 months after you leave Canada, but after that payments cease.

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Five Things I Forgot This Summer While on Vacation that Cost Me Money

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I’m lucky that we don’t have to be too rigid with our vacation budget. We only vacation a short time each year and it often involves high-interest low-cost adventuring. I know lots of the tricks to save money on dull stuff so we have more to spend on the good stuff. However, I always make some mistakes and waste some money that I could have used better elsewhere. Here are five mistakes I made this summer that cost me money.

Five Rules I Should Remember to Save Money on My Vacation

  1. Do not say you will drive “just one more hour” before you stop for a meal. After hitting the unexpected construction zone, rush hour traffic or accident tailback, you will be so tired and hungry when you finally do stop, you will forget your plans and buy $20 worth of pop, chips, candy, meat jerky, or other space fillers when you could have had a nutritious good tasting meal and driven on replenished and refreshed.
  2. Beware of hotels located in close proximity to big box stores, shopping centres, or movie theatres. Be very wary of hotels with onsite casinos or arcades. (There is a startling similarity between what happens in an arcade and in a casino with the only noticeable difference the age of the players shedding money.)
  3. Remember government-regulated gasoline prices are usually not lower prices. Tank up immediately before or after borders depending on which side has the best price.
  4. Do not allow your children in to a store full of handicrafts, art, jewellery and other great souvenirs if they have “left their money in the car.” This is code for the old “I’ll pay you back later” gambit in which they hope you will forget you paid and they will get their loot for free. They are right: it usually does work.
  5. Do not enter any store with any sign that says “Fudge.”

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Do you find you fall into the same financial pitfalls each time you go on vacation? Care to share a rule with the rest of us? Please share your experiences with a comment.