Most of our parents and grandparents would do well to place the utmost importance on their financial security, which in turn will ensure they live comfortably in retirement. With a steady income, our older loved ones would be able to cover their cost of living without depending on friends and family.
Even a steady income may, sometimes, not be enough to help your older ones settle their bills and living costs, especially if they stay in their home. As such, this begs the question, “how can an older adult improve their monthly earnings?”
In finding answers to this question, the Government of Canada introduced the Guaranteed Income Supplement — a government benefit that seeks to ease the financial burden on older adults in Canada. It is a monthly allowance that supplements older people’s pensions. Check https://seasonsretirement.com/canadian-government-benefits-for-seniors-overview/
for more details on other government benefits for older adults in Canada.
Moving into a retirement home, like Seasons Retirement, can be a great financial decision for your older relatives. They offer comfortable and beautiful residences to Canadian adults in the Ontario and Alberta provinces.
In this article, we’ll cover everything you need to know about Guaranteed Income Supplement and affiliated government benefits.
The Guaranteed Income Supplement (GIS) is a monthly benefit paid to anyone who receives or is eligible for the Old Age Security (OAS) pension with an annual income — combined total annual income for partners — is less than the amount set by the maximum annual threshold. This non-taxable government benefit is based on the income of older adults in Canada and aims to provide financial relief to low-income OAS pensioners.
Like the OAS, the GIS Canada benefits aren’t tied to employment, so you can be eligible to receive them whether you’ve never been employed or are currently working.
In most instances, an eligible individual will receive a letter containing the start date for the GIS payment after their 65th birthday. However, in some cases, your parents or grandparents might be required to send in an application for the benefits program.
Not every Canadian above 65 years is qualified to enjoy the Guaranteed Income Supplement in Ontario and other Canadian provinces. One is required to meet certain criteria before being considered eligible for the monthly benefit. To qualify for this income supplement, your older loved ones must be:
- at least 65 years old
- resident in Canada
- a beneficiary of the Old Age Security pension.
- earning less than the maximum annual income threshold for the GIS, depending on their marital status:
- For a single, divorced, or widowed pensioner, their annual income must be below $20,784
- For an adult whose spouse or partner receives the full OAS pension, their annual income must be less than $27,456.
- For an adult whose spouse or partner fully receives OAS, their annual income must be under $38,448.
- For an adult whose spouse or partner doesn’t get any OAS pension amounts, their income must be less than $49,824.
The amount your parents or grandparents could receive in GIS Canada benefits primarily depends on their income level and relationship status. Alongside employment earnings, the government counts CPP benefits as income, implying that one must submit their CPP payments when putting in an application for the GIS.
Here’s a low-down on how much your older relatives could qualify to collect in GIS payments:
- If they are a single, widowed, or divorced pensioner, they could receive up to $1,023.88 every month.
- If they have a spouse or common-law partner who receives the full OAS pension or the Allowance benefit, they’ll be eligible for a maximum monthly payment of $626.31
- If they have a spouse or common-law partner who doesn’t receive an OAS pension, they could receive up to $1,023.88 every month.
This GIS amount is reviewed every three months — January, April, July, and October — to ensure correlation with the increase in the cost of living as indicated by the Consumer Price Index. That said, the GIS monthly payment will not decrease even if there is a reduction in the cost of living.
If an older person has a spouse or a common-law partner and is eligible to receive the Guaranteed Income Supplement in Canada, their partner may be able to collect the Allowance benefit. However, to qualify for this benefit, the person’s spouse or common-law partner has to be:
- between the ages of 60 to 64 years
- a Canadian citizen or a legal resident.
- a resident of Canada for at least 10 years since turning 18 years old.
- earning a combined annual income below the maximum annual income threshold for the Allowance.
There is also the Allowance for the Survivor for older people between ages 60 and 64 whose spouse or common-law partner has died. For an older adult to be eligible for this Allowance, they must not have remarried or be in a new common-law relationship, and their annual income must be less than $27,984.
Indeed, most older individuals eligible for the Old Age Security are automatically enrolled for the GIS in Canada. But sometimes, one may be asked to apply for the program, as the administrator may not have sufficient information to enroll them automatically.
Your parents or grandparents can apply for the GIS online via Service Canada or by mailing a paper application to their physical address. Below is a list of documents needed to complete the application:
- Social Insurance Number (SIN)
- SIN and date of birth of spouse or common-law partner.
- Every address lived since turning 18 years
- Bank details if setting up a direct deposit
- Preferred date for the GIS income to begin
One of the keys to financial freedom for older adults is understanding the available benefits, their eligibility criteria, and how to apply. If your older loved ones are looking to top up their retirement income, reading this article on Guaranteed Income Supplement (GIS) is an excellent place to start.