Guaranteed income supplements: A primer for Canadian seniors

What is a guaranteed income supplement?

Guaranteed income supplements are provided by the Government of Canada as extra support for pensioners 65 years or older.

More specifically, guaranteed income supplements are a way for the government to help out pensioners with low income. In most cases, the Government of Canada will notify you by letter the month after you turn 64 if you qualify. Chances are you’ll only miss the letter under two circumstances:

1. The government doesn’t have enough information for an automatic enrollment.
2. You’re already receiving your old age security pension and don’t qualify for anything else.

Note that guaranteed income supplements aren’t taxed.

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Who is eligible for guaranteed income supplements in Canada?

A guaranteed income supplement is geared towards seniors who are at least 65-years-old and already collecting Old Age Security (OAS).

For single, widowed or divorced pensioners, you need an income below $22,056. Those with a spouse, or common law partner need to have a combined income that falls under the following thresholds.

• Less than $29,136 if your partner receives a full OAS pension
• Less than $52,848 if your partner does not receive an OAS pension (this typically applies if one partner is still working)
• Less than $40,800 if your partner received a government allowance.

Guaranteed income supplements are rolled directly into monthly OAS payments via direct deposit.

How much is the guaranteed income supplement in Canada?

Overall, a guaranteed income supplement will net you at most an extra $654.23 a month for those who have a partner with either a full OAS pension or the allowance mentioned above. If you’re single or have a partner who doesn’t receive the OAS or allowance, you can instead get up to $1,086.88.

Your first guaranteed income supplement payment should arrive the same month you received your OAS pension.

Likewise, it’s important to continue filing your taxes before April 30. Not doing so could lead to interruptions in payment.

As a senior, you can also keep an eye on how your guaranteed income supplement payments are changing. Most payments for seniors are assessed every January, April, July and October to make adjustments for cost of living.

Finally, note that if you leave Canada for more than six months, you can’t collect the guaranteed income supplement. You’ll need to contact the Government of Canada to avoid overpayment.

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What about Old Age Security pensions?

Guaranteed income supplements are a part of a broader program known as Old Age Security (OAS).

Your OAS payments will be determined based on three things.

1. Your age (starting at 65)
2. How long you’ve lived in Canada after the age of 18
3. Your net world income

OAS applies to all Canadians over the age of 65 by virtue of their residency. Generally OAS applies to those who have called Canada home for 40 years as a minimum. However, some permanent residents who have been here for 10 years can qualify for a partial pension.

All told OAS fall into two maximum income-payment buckets.

• Seniors between 65 and 74 with a net world income of less than $148,451 get an extra $727.67 per month
• Seniors over 75 with a net world income of less than $154,196 get an extra $800.44 per month

With that being said, seniors who made more than $90,997 in 2023 will be subject to a pension recovery tax.

With this in mind, we strongly recommend using the Government of Canada’s OAS benefits estimator to find out exactly how much you can get per month, and how much you may need to pay back. There’s a fair bit of complexity here depending on age, minimum income and the like.

It’s also possible to defer your OAS payment at 65 up until you turn 70, which will increase your OAS payments by a monthly rate of 0.6% (that’s an extra 36% at 70!).

Filling in the gaps: Programs for low-income seniors under 65

The Government of Canada has two supportive income streams tailored to those who don’t yet qualify for OAS.

One is the allowance mentioned above, which applies to those who have a spouse or common-law partner who receives a full OAS pension and guaranteed income supplement. The other is called the Allowance for the Survivor that covers widows who haven’t remarried or begun a common-law relationship. This allowance applies to those who make less than $29,712, annually.

Both the allowance and the Allowance for the Survivor only apply to seniors between the age of 60 and 64.

Conclusion

All in all, Canada offers a robust set of offerings for seniors looking for security as they crest the grey wave.

For those approaching retirement you can check out the Government of Canada’sRetirement Hub planning tool.

Sources

1. Mercer: Mercer CFA Institute Global Pension Index 2024

2. Government of Canada: Old Age Security pension recovery tax

3. Government of Canada: Old Age Security Benefits Estimator

4. Government of Canada: Retirement Hub