[finiki] Guaranteed Income Supplement (GIS)

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AltaRed
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Re: [finiki] Guaranteed Income Supplement (GIS)

Post by AltaRed »

GIS needs to be viewed as an income supplement. It should never be viewed as a full amount, then clawed back. It is simply a sum (in varying amounts) used to top up other income. CPP is never affected by the GIS calculation. It is the other way around.. The GIS payout is affected by the amount of CPP.

You are getting some sensitivity in the feedback because of 'entitlement' behaviour by some, and the frustration that somehow these amounts are owed to us. They are not. GIS is simply a social safety net for those who do not have enough....for whatever reason.
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Re: [finiki] Guaranteed Income Supplement (GIS)

Post by adrian2 »

epson600 wrote: 11 Jul 2017 19:35
Shakespeare wrote: 11 Jul 2017 19:22 Surely you mean GIS.
Well only if you want to get all technical about it. :) Either way it still ends up netting them about 25cents for every dollar of CPP.
A thought experiment for you:
Redo your "clawback" / MTR calculations for the same person if he's not residing a Canada.
In such a case, there is no GIS to worry about, so it should become clear to you that, although money is fungible, you cannot think of the GIS reduction as "netting them about 25cents for every dollar of CPP".

GIS reduction is a reduction in GIS, it has nothing to do with CPP.
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Re: [finiki] Guaranteed Income Supplement (GIS)

Post by adrian2 »

epson600 wrote: 12 Jul 2017 21:59 the difference between someone who never worked a day in their life and someone entitled to a max CPP pension of 13k (but didnt save anything else) is about 4 grand.

Doesn't affect me so carry on :beer:
How is this different than observing the difference between somebody with the max CPP pension, and a few other things that brings them just above the "poverty line", vs. somebody getting welfare? It's also going to be a small difference.

GIS is basically welfare with another name.
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Re: [finiki] Guaranteed Income Supplement (GIS)

Post by shellybear »

I am under the impression that money and stocks paying dividends held in a TFSA do not affect the GIS....
Can anyone verify this?
If you have 100K $ in your TFSA paying out about 800$ a month in distributions, it would equal more than your CPP if you start taking it at age 60, which i have.....
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Re: [finiki] Guaranteed Income Supplement (GIS)

Post by Dogger1953 »

shellybear wrote: 08 Nov 2017 08:40 I am under the impression that money and stocks paying dividends held in a TFSA do not affect the GIS....
Can anyone verify this?
If you have 100K $ in your TFSA paying out about 800$ a month in distributions, it would equal more than your CPP if you start taking it at age 60, which i have.....
Yes, I can confirm that nothing held in a TFSA will affect GIS entitlement.
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Re: [finiki] Guaranteed Income Supplement (GIS)

Post by shellybear »

Thanx , will keep on topping up the TFSa then..
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Re: [finiki] Guaranteed Income Supplement (GIS)

Post by Ishling8 »

Over the years, I received the GIS along with CPP. I do my taxes online each year. This year, apparently, Netflix had a glitch and, even though I paid a fee to send it, Rev Canada did not receive it!, And they changed me an intererst fee (74.00 CAD). The GIS people then denied my GIS, based on "None filing of tax return" even after I had resubmitted it, gave them all the detailed information. They also instructed me that I would need to Appeal it. So, sent them a letter stating why I should be entitled and needed this benefit, (including 2 years of medical reports and expenses, when I could not work for 18 months due to physical ilness. It is a constant threat and could prevent me, again, from working from home.
Does anyone know - if they do decide to pay me again, will the payments be back-dated to April/May 2019? Thanks!
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Re: [finiki] Guaranteed Income Supplement (GIS)

Post by Dogger1953 »

Ishling8 wrote: 04 Nov 2019 17:24 Over the years, I received the GIS along with CPP. I do my taxes online each year. This year, apparently, Netflix had a glitch and, even though I paid a fee to send it, Rev Canada did not receive it!, And they changed me an intererst fee (74.00 CAD). The GIS people then denied my GIS, based on "None filing of tax return" even after I had resubmitted it, gave them all the detailed information. They also instructed me that I would need to Appeal it. So, sent them a letter stating why I should be entitled and needed this benefit, (including 2 years of medical reports and expenses, when I could not work for 18 months due to physical ilness. It is a constant threat and could prevent me, again, from working from home.
Does anyone know - if they do decide to pay me again, will the payments be back-dated to April/May 2019? Thanks!
The payment year for GIS based on 2018 income is from July 2019 thru June 2020, so they should pay you retroactive to July 2019 once your 2018 income is accepted.
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Re: [finiki] Guaranteed Income Supplement (GIS)

Post by Ishling8 »

Thanks for that! Appreciated.
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Re: [finiki] Guaranteed Income Supplement (GIS)

Post by hamor »

http://www.knowledgebureau.com/index.ph ... ks-reduced

looks like the reduction rate has changed, I can't find it on canada.ca, they simply include tables with ranges of income

Here's an interesting strategy, perhaps should be covered in finiki
https://business.financialpost.com/pers ... -heres-how
https://www.moneysense.ca/save/investin ... arge-tfsa/
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Re: [finiki] Guaranteed Income Supplement (GIS)

Post by gsp_ »

hamor wrote: 17 Feb 2020 10:39 http://www.knowledgebureau.com/index.ph ... ks-reduced

looks like the reduction rate has changed, I can't find it on canada.ca, they simply include tables with ranges of income
That’s only for employment income. Most GIS recipients don’t have employment income.

BTW that article is mistaken in stating there is a flat 50% reduction, since the GIS top up was instituted several years ago(and since increased) there is a significant low income range at 75% clawback.
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Re: [finiki] Guaranteed Income Supplement (GIS)

Post by hamor »

gsp_ wrote: 17 Feb 2020 10:54
That’s only for employment income. Most GIS recipients don’t have employment income.

...
How do you know? It says any income except OAS...
"Speculation is an effort, probably unsuccessfully, to turn a little money into a lot. Investment is an effort, which should be successful, to prevent a lot of money from becoming a little." Fred Schwed " Where are the Customers’ Yachts?"
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Re: [finiki] Guaranteed Income Supplement (GIS)

Post by gsp_ »

hamor wrote: 17 Feb 2020 13:32
gsp_ wrote: 17 Feb 2020 10:54
That’s only for employment income. Most GIS recipients don’t have employment income.

...
How do you know? It says any income except OAS...
It is right in the text of the link you posted and was announced in the budget.
Changes to GIS clawbacks. There is some good news for GIS recipients starting in July 2020. Currently, GIS recipients can earn up to $3500 of employment income without affecting their GIS pension. However, if they earn more, the GIS is reduced by 50% of the excess earnings. That’s a steep clawback.

Beginning with the July 2020 to June 2021 benefit year, which are based on income earned in 2019, GIS recipients can earn up to $5,000 from employment or self-employment before their GIS is reduced. In addition, 50% of the next $10,000 of employment or self-employment income will also be exempt.
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Re: [finiki] Guaranteed Income Supplement (GIS)

Post by hamor »

We may be talking about 2 different things..?
I was talking about 'Reduction Rate' in the table, e.g. 1/24 for a Single recipient.
I guess this is not the same as 'claw back'..?

Family Situation Maximum Income (excluding OAS) Maximum Amount Reduction Rate*
Single, widowed, divorced, or senior $18,240 $898.32 $1/$24
Spouse receives full OAS $24,096* $540.77 $1/$48
Spouse does not receive OAS $43,728 $898.32 $1/$96 over $4,096
Spouse receives the allowance $43,728* $540.77 $1/$48
*The benefit is reduced by one dollar for each multiple of income level shown (e.g. $1 for each $24 of income for a single senior). Note that the first $3,500 of employment income does not count.
"Speculation is an effort, probably unsuccessfully, to turn a little money into a lot. Investment is an effort, which should be successful, to prevent a lot of money from becoming a little." Fred Schwed " Where are the Customers’ Yachts?"
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Re: [finiki] Guaranteed Income Supplement (GIS)

Post by gsp_ »

hamor wrote: 17 Feb 2020 17:14 We may be talking about 2 different things..?
I was talking about 'Reduction Rate' in the table, e.g. 1/24 for a Single recipient.
I guess this is not the same as 'claw back'..?

Family Situation Maximum Income (excluding OAS) Maximum Amount Reduction Rate*
Single, widowed, divorced, or senior $18,240 $898.32 $1/$24
Spouse receives full OAS $24,096* $540.77 $1/$48
Spouse does not receive OAS $43,728 $898.32 $1/$96 over $4,096
Spouse receives the allowance $43,728* $540.77 $1/$48
*The benefit is reduced by one dollar for each multiple of income level shown (e.g. $1 for each $24 of income for a single senior). Note that the first $3,500 of employment income does not count.
We are talking about the same thing. As previously mentioned those reduction rates are not accurate. Go back and read this thread, epson600 already addressed this issue upthread. You can test this for yourself by playing around with income on the official OAS/GIS website. https://www.canada.ca/en/services/benef ... ments.html

Only thing changing is that 3.5k of exempt employment income is being increased. GIS recipients with no employment income are unaffected.
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