What is the Guaranteed Income Supplement?

Start your free tax return
Author bio

Diana Grey has a Public Relations major with over five years of work experience, including writing for Wealthsimple. After graduating, she joined a tech software startup company as a marketing assistant manager. At the company she has majored in content marketing and closing customers. She understands the science of SEO and produces highly rating articles.

Having a retirement plan is crucial as it will help you avoid poverty at an old age. This is where the Guaranteed Income Supplement comes in handy. Being a low-income earner and aged 65 years above gives you the eligibility to benefit from GIS.

What is a Guaranteed Income Supplement?

The GIS is a supplementary income in addition to the Old Age Security pension, applicable to low-income seniors aged 65 years and above. However, you must be approved for Old Age Security to benefit from GIS. You can get the application kit by contacting Service Canada via 1-800-277-9914. Alternatively, you can visit their website servicecanada.gc.ca.

Who Qualifies for GIS

To qualify for the Guaranteed Income Supplement, you should be;

  • A resident of Canada

  • approved for Old Age Security

  • Earning lower than the set maximum allowed income levels

To get approved for OAS pension, you must be a Canadian citizen, be 65 years and above, and have resided in Canada for about 10 years since you were 18 years of age. If you're living outside Canada, you should be 65 years and above must have lived in Canada for about 20 years since you were 18 years. More so, you should be a Canadian or a legal resident of Canada.

The GIS maximum allowed income comes at different levels based on your marital status. it also depends on whether your spouse is receiving the Allowance or OAS.

The current GIS marital status rates for 2020 are:

For single, divorced, or widowed OAS pensioners

If you fall into this category, you’re eligible for a maximum monthly payment amount of $917.29 if your annual income is less than $18,624.

If you have a common-law partner or spouse

If your common-law partner or spouse receives the full OAS pension and your annual income is less than $24,576, you’re eligible for a monthly payment will be $552.18.

If your spouse or common-law partner does not receive Allowance or OAS pension and your annual income is less than $44,640, you’re eligible for a monthly payment will be $917.29.

These income levels are reviewed quarterly based on the changes in the Consumer Price Index. Income for GIS is considered the same as your net income based on your Income Tax return report.

The Year's Income Used for GIS Purposes

Typically, Guaranteed Income Supplement is based on the previous calendar year's net income. This means the entitlement for July 2021 all through to June 2022 will be based on the 2020 calendar.

However, there is a provision where your payment can be based on the current year's income. This happens when you had a reduction or loss of your revenue. If this happens to you, ensure you contact Service Canada and request them to send you a form indicating the estimated income for the current year.

Your Application for GIS

You need to apply for GIS if:

  • You get a letter from Service Canada asking you to apply

  • You're approved for OAS pension

  • The information in the letter sent to you is incorrect

Before you begin the process, kindly ensure you have;

  • Correct information about your common-law partner or spouse, including date of birth and Social Insurance Number (SIN)

  • Your SIN

  • The banking details to enable you to sign up for the direct deposit

  • Detailed information about the countries you resided in since the age of 18

  • Reduction or loss of pension or pension income

  • Your preferred date for payments

When applying for GIS and Allowance, you must report your net income and deductions. But don't include GIS, OAS, Allowance as income. What is considered as income include;

  • Employment insurance benefits

  • Net income from rental properties

  • Canada Pension Plan benefits

  • Self-employment or net employment income

  • Interest and any other investment income

  • Registered Retirement Savings Plans cashed during the year

  • other income from sources such as alimony and worker's compensation payments

You can apply for the GIS online if you're already enrolled for the OAS pension. However, you must live in Canada with no legal representative on your account. Or you have not yet applied for an OAS pension or receiving any OAS pension. More so, you need to be one month past 64th birthday.

Alternatively, you can make a paper application. Download the GIS (1SP-3025) and include certified and verified copies of the necessary documents. You can mail your application to service Canada or take it in person to their offices.

You'll then get a response about your application- whether you're eligible or not. If you're eligible, the letter will include;

  • The amount you qualify to receive monthly

  • Payment date

However, you can dispute the decision and request a review. Your request must be in writing before the lapse of 90 days since the day you received the decision letter. The assessment will be made by the Service Canada team that wasn't involved in the previous decision.

Is the GIS taxable?

Unlike Old Age Security, Guaranteed Income Security is not taxable. Once you start receiving your GIS, it will get adjusted annually after filing the income tax return. It's important to file an income tax return each year since the amount of income enables the Canada Revenue Agency to evaluate your eligibility for Guaranteed Income Supplement.

It's essential to report your GIS amount in your T4A(OAS) tax slip. The GIS is included in your tax return's total income to determine other provincial and federal benefits.

Final Thought

If you're approved for OAS or past your 64th birthday, it's essential to check if you're eligible for Guaranteed Income Security. As a low-income earner, you require this entitlement to supplement your earnings. It offers financial stability in senior years.

The GIS application is simple, and the entire process is seamless. But if you have any queries, you can always contact Service Canada.

Last Updated January 11, 2021

File with Wealthsimple Tax. Maximum refund, guaranteed.

Get started for free