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Understanding Canada’s Retirement Income System: CPP, OAS and GIS

The Government of Canada provides a wide range of income support systems to seniors upon retirement. While the Canada Pension Plan is accessible to all individuals over 60 who paid into CPP at some point in their working life, other programs such as the Guaranteed Income Supplement have more stringent eligibility requirements. Each of these programs can help low-income seniors financially survive the cost of retirement. The amounts available to seniors through Canada’s retirement income programs are dependent on the specific financial circumstance of each applicant. This blog provides the definitions and application links for the Canada Pension Plan, the Old Age Security Pension, the Guaranteed Income Supplement, the Allowance, and the Allowance for the Survivor Benefit.

 1. Canada Pension Plan (CPP):

The Canada Pension Plan retirement pension is a taxable monthly benefit designed to replace some of your income when you retire. The amount of this depends on your average earnings and how much you paid into the plan. If you qualify, you will receive the monthly benefit for the rest of your life.

 Eligibility Requirements include:

  • You are at least 60 years old (but the standard age is 65)
  • You have made a at least one valid CPP contribution in your lifetime.

Learn more about the Canada Pension Plan and Apply. 

 

2. Old Age Security (OAS):

At 65, those who meet the residence requirements can receive this modest monthly benefit. The amount you will receive for this benefit is calculated based on how long you have lived in Canada after you turned 18 years old. Payment rates can change to reflect the current cost of living based on the Consumer Price Index. The Old Age Security benefit is considered taxable income and, in some cases, Service Canada may automatically enroll you in the OAS pension. As of July 2022, Seniors aged 75 and older will see an automatic increase of their OAS pension by 10%.

Learn more about the Old Age Security Pension.                                      

 

3. Guaranteed Income Supplement (GIS):

At 65, people with low or no other income beyond OAS may qualify for an additional monthly benefit called the Guaranteed Income Supplement. Low-income individuals who are receiving partial OAS can also apply and receive GIS to make up for their reduced OAS pension. It is not taxable. 

Eligibility Requirements include:

  • You are 65 or older
  • You reside in Canada
  • You get the OAS pension
  • Your income plus the income of your spouse/common-law partner is below:
    • $25,728 if your spouse/common-law partner receives the full OAS pension
    • $46,656 if your spouse/common-law partner does not receive an OAS pension
    • $46,656 if your spouse/common-law partner receives the Allowance

Before applying for the Guaranteed Income Supplement, ensure that you have completed all your annual tax returns to date and that you have already applied to OAS.

Learn more about the Guaranteed Income Supplement and Apply. 

 

4. Allowance:

If you are eligible for the Guaranteed Income Supplement, your spouse or common-law partner may be eligible to receive the Allowance benefit.

Eligibility Requirements include:

  • You are 60-64 years old
  • You are a Canadian citizen or a legal resident
  • You reside in Canada now and for at least 10 years since the age of 18
  • Your combined income annually is under $36,048

Learn more about the Allowance Pension and Apply.

 

5. Allowance for the Survivor Benefit:

One additional benefit is available for low-income spouses and common-law partners of GIS recipients.

Eligibility Requirements include:

  • You are between 60 and 64 years of age
  • You reside in Canada
  • Your spouse or common law partner has died and since their death you have not remarried or become common-law with another person
  • Your yearly income is less than $26,256

 

Learn more about the Allowance for the Survivor Benefit and Apply.

Retiring on a budget is challenging but not impossible. Beyond these government support programs, seniors can draw from community groups for physical, mental and emotional support as well as organizations such as Carefor for low-cost retirement housing or free assisted living programs. Contact our team at Carefor today to learn how we can help make a retirement plan with you, or visit some of the recommended resources below to learn more.

Recommended Resources for Low Income Retirement Planning:

Low Income Retirement Planning 2022

Government of Canada Public Pensions

Old Age Security Payment Amounts

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