Requirements, Benefits, and Options
Contributions
No contributions are required to participate in the OAS.
Basic Benefits
The OAS is available to Canadian residents who have attained the age of 65. Benefits are reduced for individuals with less than 40 years of residence after the age of 18. If you live outside Canada but, were a resident for more than 20 years after turning age 18, you may also qualify for OAS. Benefits are income tested.
If your net world income exceeds the threshold amount ($74,788 for 2017), you have to repay part or your entire OAS pension. Part or your entire OAS pension is reduced as a monthly recovery tax.
You must pay the recovery tax if:
- your annual net world income is more than $74,788 (for 2017, in Canadian dollars); and
- you live in a country where the non-resident tax on Canadian pensions is 25 percent or more.
| Recovery Tax Period | Income Year | Minimum Income Recovery Threshold | Maximum Income Recovery Threshold |
|---|---|---|---|
| July 2018 – June 2019 | 2017 | $74,788 | $121,314 |
| July 2019 – June 2020 | 2018 | $75,910 | $123,386 |
| July 2020 – June 2021 | 2019 | $77,580 | $125,696 |
Application
You must apply for OAS. You should apply approximately 6 months before you turn 65. If you apply after age 65, you will only receive up to 11 months of retroactive payments. Once you start receiving OAS, you need not apply again as long as you file your annual income tax return.
GIS (Guaranteed Income Supplement) is one of the “supplementary” benefits payable under the Old Age Security (OAS) Act. Other such supplementary benefits include the Allowance and the Allowance for a Survivor; they will be discussed in a future article.
GIS is a monthly non-taxable benefit that is paid to eligible pensioners, in addition to the basic monthly Old Age Security (OAS) amount.
Who is eligible for the GIS?
In order to be eligible for the GIS:
- You must be receiving the basic OAS.
- You must be resident in Canada.
- Your income must be lower than the maximum allowed income levels.
What are the maximum allowed income levels?
There are different maximum allowed income levels for the GIS depending on your marital status and whether your spouse is receiving the OAS or the Allowance. The four different marital status rates for GIS are known as:
Table 1 – Single, widowed or divorced OAS pensioner
Table 2 – Married or common-law OAS pensioner and spouse is also an OAS pensioner
Table 3 – Married or common-law OAS pensioner and spouse is not an OAS pensioner
Table 4 – Married or common-law OAS pensioner and spouse receives the Allowance
The maximum allowed income levels for these four different rate tables effective January 2018 through March 2018 are as follows:
| Rate Table | Maximum Allowed Income(combined income if a couple) | Maximum monthly GIS |
| 1 | $17,784 | $876.23 |
| 2 | $23,520 | $527.48 |
| 3 | $42,624 | $876.23 |
| 4 | $32,928 | $527.48 |
These income levels and maximum GIS amounts change quarterly, based on increases in the Consumer Price Index. For the current amounts, see: http://www.servicecanada.gc.ca/eng/services/pensions/oas/payments/index.shtml.
What is considered as income for GIS purposes?
For the most part, income for GIS purposes is the same as your net income reported on your Income Tax return (excluding OAS). Here is a link that provides more detail: http://www.servicecanada.gc.ca/eng/services/pensions/oas/income-deductions.shtml.
What year’s income is used for GIS purposes?
Normally, GIS entitlement for any payment year (July through June) is based on income for the previous calendar year. For instance, GIS entitlement for the period of July 2017 through June 2018 is normally based on your income for the 2016 calendar year.
I say “normally”, because there is a provision under the GIS where your payment can sometimes be based on your current year’s income instead. This occurs when you have had a loss or reduction in some type of regularly recurring income (for example, employment earnings, pension income or Employment Insurance benefits). If this applies to you, contact Service Canada at 1-800-277-9914 and ask them to mail you a form for estimating your income for the current year.
How is my GIS payment calculated?
For the most part, your GIS payment is reduced from the maximum payable by 50 cents for every dollar of other income that you have.
The actual amount of GIS is determined using a set of complex rate tables, available at:
http://www.servicecanada.gc.ca/eng/services/pensions/oas/payments/index.shtml.
How do I apply for GIS?
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 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.
Can I receive GIS outside of Canada?
As mentioned previously, 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.”
Having said that, GIS is payable for temporary absences from Canada, up to six months in duration.
Are there other reasons why I won’t be eligible for GIS?
Some other reasons why you might not be eligible for GIS include:
- If you are a sponsored immigrant, GIS is not normally paid during the period of sponsorship.
- If you are incarcerated in a federal penitentiary for two years or longer, your GIS eligibility will be suspended.
Summary
GIS is intended for low-income seniors who are receiving the OAS pension. It is not welfare, however, and there should be no stigma attached to receiving GIS. If you are eligible for GIS and aren’t receiving it, apply today!
Indeed, nearly one-third of all OAS recipients in Canada qualifies for and receives GIS.
If you have any questions about your eligibility for GIS, call Service Canada at 1-800-277-9914 or check out their website at: http://www.servicecanada.gc.ca/eng/services/pensions/oas/gis/index.shtml
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