GIS and Allowance Facts

Wow, since posting the article on Old Age Security (OAS) and Canadian Pension Plan 9CPP) Myths and Facts a few weeks ago, we have gotten a few phone calls questioning the accuracy of the article.  In each case where someone thought the government had clawed back their OAS, it turns out they had actually clawed back the Guaranteed Income Supplement (GIS) or Allowance.  The information in the article stands true, but I am writing this one about GIS and Allowance to add information about the GIS and Allowance program.

Guaranteed Income Supplement Facts

• The Guaranteed Income Supplement(GIS) is provided to OAS pensioners with little or no other income.
• You must be 65 years old or older to receive OAS & GIS.
• GIS must be applied for.
• GIS is not taxable income.
• Once income is over the maximum amount to receive the maximum benefit, GIS is clawed back at the rate of $0.50 for every $1 over the threshold until the maximum is met, as indicated below.

If you are a single/widowed/divorced person on OAS, the following applies:
2011 Jan - Mar maximum GIS monthly benefit                          $661.69
2011 Maximum income to receive maximum benefit              $15,888
2011 Income level at which GIS in no longer received            $31,761

If you are married/common-law and your spouse is not yet receiving OAS, the following applies:
2011 Jan - Mar maximum GIS monthly benefit                         $661.69
2011 Maximum combined income to receive max. benefit     $38,112
2011 Income level at which GIS in no longer received           $46,052

If you are married/common-law and both receive OAS, the following applies to your spouse:
2011 Jan - Mar maximum GIS monthly benefit                        $436.69
2011 Maximum combined income to receive max. benefit    $20,976
2011 Income level at which GIS in no longer received          $26,219


Allowance & Allowance For Survivor Facts
The Allowance is meant for spouses/common-law partners between 60 & 64 whose spouse/partner is a OAS recipient, and their combined incomes, not including OAS or GIS, are less than the maximum.
2011 Maximum Allowance monthly benefit                             $961.18
2011 Income level at which Allowance is no longer paid      $26,219

The Allowance for the Survivor is meant if for a widowed spouse/common-law partner between 60 & 64 years old, with income less than the threshold.
2011 Maximum Allowance for Survivor monthly benefit       $1,065.45
2011 Income level at which Allowance is no longer paid    $21,408

Taxable Income For These Benefits
All of these benefits are affected by your taxable income levels.  The following are considered to be taxable income by CRA when looking at these benefits:

• 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 $3,500;
• income from other sources such as workers' compensation payments, alimony, etc.

So, there you have it.  We are quite fortunate to have these benefits available to our seniors. The goal of Rocky Credit Union is to help our members never need these benefits, because by working with our members the retirement plans we build together may provide far more financial security in retirement than the government benefit plans do.  Come visit our retirement planning specialists to figure out how you can have that kind of financial security.   Jerry