Minimizing Old Age Security Clawback

The Old Age Security (OAS) program is the cornerstone of Canada’s retirement income system. It includes a basic pension that goes to almost all people 65 or older who have lived in Canada for at least 10 years over the age of 18.

How much income to expect?

The amount of OAS you receive depends on the number of years you live in Canada after you turn 18. Generally, you receive a full pension (Currently the maximum OAS income is $546.07.23 per month-2013) if you live in Canada for at least 40 years after age 18. If you live here for less time, you may qualify for a partial pension. With a partial pension, you’ll receive 1/40th of the full pension for each complete year you live in Canada after you turn 18. OAS is indexed for inflation every January, April, July and October.  Here are the maximum OAS rates:

  • 2013 – $546.07 per month
  • 2012 – $540.12 per month
  • 2011 – $524.23 per month
  • 2010 – $521.62 per month
  • 2009 – $516.96 per month

OAS clawback

The OAS clawback means that high-income earners (over the age of 65) are required to repay some or the entire OAS pension. It is interesting to note that the government does not use the word clawback. Instead they use the OAS recovery or OAS repayment. Despite that clawback seems to be the more universally understood term.

If your net individual income is above a set threshold, your OAS pension will be reduced. Here are the starting thresholds:

  • $70,954 for 2013
  • $69,562 for 2012
  • $67,668 for 2011
  • $66,733 for 2010
  • $66,335 for 2009
  • $53,960 for 2000

This figure is also adjusted each year for inflation. For every dollar ($1.00) of income above the threshold, the amount of basic OAS pension reduces by 15 cents. For example, if your taxable net income was $70,000, then you would be above the clawback threshold by $2,332 which in turn would mean that you would lose $349.80 per year of OAS or $29.15 per month. If you qualified for the maximum OAS, you would be losing just under 9% of your OAS pension income.  Here’s some clawback amounts at different income levels:


2011 Income 2012/13 Clawback OAS
$69,562.00 $0.00 $6,481.44
$70,000.00 $65.70 $6,415.74
$75,000.00 $815.70 $5,665.74
$80,000.00 $1,565.70 $4,915.74
$85,000.00 $2,315.70 $4,165.74
$90,000.00 $3,065.70 $3,415.74
$95,000.00 $3,815.70 $2,665.74
$100,000.00 $4,565.70 $1,915.74
$105,000.00 $5,315.70 $1,165.74
$110,000.00 $6,065.70 $415.74
$112,771.60 $6,481.44 $0.00

Is OAS clawback a big issue?

On one hand, the answer is yes because it is like an additional 15% tax on top of the current marginal tax rates. However, according to Human Resource Development Canada, only about five percent of seniors receive reduced OAS pensions, and only two percent lose the entire amount.

In terms of planning, if you are one of these people who face losing some of the OAS due to clawback because your income over the age of 65 will be higher than $69,562, then you need to consider some simple strategies to help you minimize the clawback.

  1. Spend RRSPs before you turn 65. I know this sounds like unconventional advice but leaving the RRSPs until after the age of 65 may lead to the loss of OAS which is like an additional 15% tax. One of the benefits of investing in RRSPs is that it is a tax deferral. And while tax deferral is great, it is only good to a point.
  2. Income splitting in retirement. Probably the biggest impact for retires with spouses was the introduction of pension splitting in 2007. With pension splitting, spouses can give up to 50% of their pension income to their spouse for tax splitting purposes. This is a very effective way to reduce income if you are close to the OAS clawback threshold. For retirees with no pension income, RRIF and annuity income qualify for pension splitting after the age of 65. Splitting or sharing Canada Pension Plan (CPP) is another income splitting strategy that can help minimize or avoid OAS clawback.
  3. Tax efficient income on non-RRSP investments. When it comes to investment income from non-registered investments, different types of income are taxed differently. Interest income from Guaranteed Income Certificates (GICs) and term deposits are fully taxed. Mutual fund corporations may be an effective alternative to convert income into capital gains as opposed to interest income.
  4. Dividend income is considered tax efficient because it enjoys a much lower tax rate than interest and at some levels capital gains. The problem with dividend income is the process to getting a tax break includes a dividend gross up before the application of the dividend tax credit. As a result, dividend income can actually get you closer to the OAS clawback threshold because the grossed up income is used. If you income is close to the OAS threshold, be careful about selecting investments that produce dividend income.
  5. Use Tax Free Savings Accounts (TFSA)Tax free savings accounts are much more favourable that non-registered investments simply because the investment income is non-taxable inside the TFSA. Maximizing the TFSA is a great strategy to reduce OAS clawback especially if the investment income would put you over the $66,335 threshold. The TFSA is also a great place to hold investments that produce dividend income if those types of investments are preferred.
  6. Although I am not a he fan of leverage, borrowing to invest can help reduce OAS clawback if the interest on the loan is tax deductible. This interest deductibility reduces your net income dollar-for-dollar, and at the end of the loan, you pay the principal on the loan and keep the after-tax investment income.
  7. Watch for capital dispositions after the age of 65. For example, people with rental properties, cottages, or significant unrealized capital gains from investments may be better off triggering those gains before the age of 65. Triggering them after 65 may result in losing OAS from clawback.

My Two cents

At the end of the day, more people’s concern over OAS clawback will not be such a big deal simply because there are not a lot of people over the age of 65 making more than $69,562 of income. The people that do may have significant pensions or continue to work and earn and income over the age of 65. There will also be a group of people that trigger significant capital gains from the sale of second property or investments but the good news is they will only lose part or all of there OAS in the one year that the capital gains is realized and reported on the tax return. But if you happen to be one of the few that will get affected, make sure you plan ahead accordingly.

Update March 2012 – The Federal Government announced 3 NEW CHANGES TO OAS

Written by Jim Yih

Jim Yih is a Fee Only Advisor, Best Selling Author, and Financial Speaker on wealth, retirement and personal finance. Currently, Jim specializes in putting Financial Education programs into the workplace.For more information you can follow him on Twitter @JimYih or visit his other websites Group Benefits Online and Advisor Think Box.

142 Responses to Minimizing Old Age Security Clawback

  1. Jacob says:

    Thank you. This is the first complete and thoughtful article I have found on the topic of minimizing the clawback. I particularly like your first recommendation on RRSP withdrawal before age 65. In my case, retired, that allows me to withdraw at a marginal tax rate of about 42% rather than 52%. However, I have not compared that to the cost of getting investment income taxed outside my RRSP for the next 20+ years.

    • Jim Yih says:

      Thanks for stopping by.
      Don’t forget the TFSA and let’s hope the government increases the annual limit so you can put more money are earn tax free investment income.

  2. richard ford says:

    Thanx very much Jim! Hard to find info on the “clawback” and the 66g ceiling has cleared it up. Well done thnx! RGF

  3. I. K. says:

    Excellent article. It’s hard to find much written on preventing OAS/GIS clawback so your advice is very appreciated. Please keep writing on this topic!

    A lot of new Canadians who have been in Canada for less than 40 years will be depending on GIS to top-up their reduced OAS – and since GIS gets clawed back more quickly than OAS, even seemingly minor tips to prevent clawback can be very useful.

    Do you think that moving investments (property, securities) into a corporation (or maybe even a family trust) pre-65 could be a good way to prevent clawback? I’m thinking some of the corporate assets could be returned to the retiree, as needed for cash flow purposes where TFSA income is not sufficient, via discretionary dividend payments, to one or both spouses, which would be optimized in terms of timing to prevent the most clawback. This way, at worst, you would only lose one year of OAS/GIS at a time, like in your Two Cents example. Am I onto something or am I forgetting something?

  4. Joe Pangia says:

    Hi, just wondering how this affects me. Here is my scenario:

    I am gifting a home to my son this year, deemed to be sold at fair market value, trigeering capital gains. I am scheduled to begin recieving OAS in March of 2012. The taxable capital gains would be roughly $130,000.00 How would this affect my OAS and for how long? Is it only for 1 year seeing as my income in 2012 will be greatly reduced and roughly only $50,000. The spike in income would only be for 1 year (2011).

    Thanks for any help or info you could provide!!

    • Jim Yih says:

      Since your income will exceed the maximum threshold, you will lose all your OAS for 1 year. The 2011 tax return will affect your OAS from July 1, 2012 to June 30, 2013.

      Your 2012 tax return will determine your OAS clawback from July 1, 2013 to June 30 2014.

      • Des Hunter says:

        Hi Jim, just signed up for “Become a Retire Happy VIP”. I’m glad I found your website and want to confirm dates for OAS clawback. I will be 65 in Dec 2013 and will receive my first OAS payment in January 2014. My understanding is that my 2012 tax return will determine the OAS clawback from January 2014 to June 2014 and that my 2013 tax return will determine the OAS clawback from July 2014 to June 2015. If this is correct then I should get my net income as close to or under the OAS threshold by splitting pension income with my spouse in my 2012 tax return. Thanks

  5. JP says:

    Thanks for the reply and the clarification.

    My Wife doesn’t work and has no income, would I be able to defer the capital gains to her since she wouldn’t qualify for OAS for a few more years? The property that we are gifting is held jointly.

  6. Fred Grey says:

    Having just turned 65 the first letter from the government was not a “congratulation” letter, but a notice my OAP will be reduced by $17.00 per month.
    I find this interesting as I have worked my whole life thinking I would receive the OAP,and yes I am still not only working but paying income tax to support others who may or may not have paid any income tax for years. This seems counterproductive as I feel I am being penalized for continuing to contribute to the pension fund.

    Comments please

    Fred Grey

    • Jim Yih says:

      Not sure what to tell you Fred other than we live in Canada. I’m a capitalist at heart but I do understand that taxes go into a pool to better all of Canada and Canadians. No one will ever agree on the best use of tax money. There are strengths and flaws to every system. Being self employed I pay into EI and will never collect.

      OAS clawback affects 1% of Canadians. Its most likely to affect people who work past 65. Should you stop working just to avoid the $17 per month OAS clawback. My guess is you are still ahead by more than $17 from working.

      Anyhow, I’m not for or against it. It’s the rules and we have to live by these rules.

      Good luck!
      Jim

      • Juan Eduardo says:

        When a couple both age 65 are on CPP and OAP and collecting the suppliment, “is it more financially beneficial for them to be divorced”? Your reply is appreciated.

      • John says:

        I WAS BORN IN TORONTO SO THAT MAKES ME A CANADIAN CITIZEN. I LEFT TORONTO AND MOVED TO GREECE WITH MY FAMILY IN 1990 WHEN I WAS 11 YEARS OLD THEN. DOES THAT MEAN IM NOT GOING TO GET OLD AGE SECURITY

        • Doug says:

          John
          OAS is earned at the rate of 1/40th of the full basic amount for every year of residence in Canada after age 18. If you left Canada at age 11 and never return, you won’t be eligible for any OAS.

  7. Anita says:

    Thanks for the article. It makes me wonder if an RRSP is worth using in my situation (contrary to all the advertising). I have a lump sum to invest. I’m 55 and plan to work another 5 years. I’m in the 22%(federal) marginal tax bracket with RRSP room that is larger than my current taxable income (TFSA is max’d). I think my retirement income will be in the OAS clawback range, so I wonder if I’d be better off just investing outside of an RRSP?

  8. Louis Blinn says:

    My wife and I are recently retired, about 60 and will likely both have incomes within the OAS clawback range when we turn 65. I have always tried to set up our retirement incomes to come out fairly equal, thinking this would maximize after tax income. I live in Alberta.

    I am now wondering with OAS clawback over 65, if trying for an income split which drives one income above the clawback range while driving the other just below the range may make more sense whenever that is feasible.

    Louis

    • Jim Yih says:

      The clawback starts at $66,668 of income. In alberta, you are in the same Marginal tax rate up to $83,088 so I think your thought process is correct, especially up to the $83,088 income threshold. Incidentally, the lower bracket is at $41,544 so you could move money from one spouse to another and keep the income in the same tax bracket but only have one spouse clawed back.
      Jim

      • John says:

        if i come back to canada now , what do i need to do to get my OAS how many years do i need to work there.

        • Doug says:

          John
          As mentioned above, OAS is earned at the rate of 1/40th for each year of full residence in Canada after age 18. So if right now you have zero years of residence in Canada, you would need to reside here for 40 years to get the full basic OAS amount (approx. $550/month in 2014 dollars).

          Whether you’re working or not isn’t relevant for OAS purposes, but if you are working you would also contribute to CPP. At age 65, CPP is based on your best 39 years of earnings, so each year of max contributions will earn you 1/39th of a max CPP, or about $26.50 monthly in 2014 dollars.

  9. Louise says:

    When you say “net” income are you referring to your gross income minus taxes and all deductions? Net can mean something different to the feds as you probably know.

    Thank you

  10. Louis Blinn says:

    I’m not sure where I mentioned net income, but related to OAS, I would I assume the net income line on my personal tax return will be the key to determine OAS clawback.

    Of course. with the Canadian government planning to revamp OAS, I will be watching for consequences to my future OAS in 3.5yrs. Current news casts suggest no changes for next 8 yrs- we’ll see.

  11. sam k says:

    Hi Jim,
    My scenario:
    I’m turning 65 in May 2012 but I am retiring from work in May 2013. I am postponing my OAS benefits application until Jan 2013. In 2013 I suppose OAS will pay me retro payments for OAS ( from June 2012 to Dec 2012). With no OAS benefits received in 2012, I won’t be subject to any OAS clawback on 2012 T1. In 2013 my net income will be under the clawbwack limit even including 2012 & 2013 OAS pension so no OAS clawback will apply. Is it a good way to avoid clawback or am I missing something? or Will OAS benefits rec’d for 2012 in 2013 be still taxable in 2012.
    Just like your comments on this scenario.
    Sam K

  12. Rick MacPherson says:

    Hi Jim,
    Find your web page very informative.
    Her.e is my question. I will be turning 65 this June 2012 and due to the fact I enjoy what I do for a living, is there any way not to receive Federal OAS, CPP and a private small pension plan payments.
    My thought process is that I enjoy doing what I do and my long range plan is to retire at age 70.
    I know that I can complete a form to reduce the CPP contribution and not sure about OAS.
    Bottom line is that I don’t want CPP or OAS till age 70!
    What are my options?

  13. Phil Frenette says:

    Hi Jim
    I turned 65 in Oct 2011 and was/is faced with OAS clawback. The OAS I received in 2011 I had to repay back as part of my income tax amount due. The reason is that I cashed in some RRSP that put me over the threshold. In addition my OAS will be reduced for 2012/3 though my net income will be much below the threshold. I believed that the clawback was me paying back the OAS received in 2011 not further reduction during the next year since cashing in RRSP was a one time only. So a person is hit twice for being over the threshold of the current year – repay the OAS received during the current year and reduction for the next year.
    When I file my 2012 IT will I receive some credit for having received a reduced OAS?
    Phil

    • Jean Dube says:

      Based on a reply I received from CRA “when you file your 2012 income tax return you may claim these amounts as tax deducted”.

    • John Newton says:

      The Canadian government made two attacks on the people who built Canada. (1) The elderly, with some being required to work to age 67 before receiving OAP benefits. (2) War veterans have been informed that their benefits will be decreased in the near future. Why would government attack the very people who built Canada, and were brave enough to fight for Canada? The reason is that government has got themselves into a very expensive excessive immigration program that is costing us many billions of dollars every year, an expense they do not openly talk about. They are also into building large jails which they know they’ll some day need, now that they’ve announced they’d be stripping citizens of their basic right to free speech and expression. Those who rebel will be imprisoned, just like Castro did to the citizens of Cuba during the revolution.
      Bottom line … The Canadian government has come to dislike seniors, and would rather spend money on the possibilities of securing votes from the immigrants they import.

  14. Jim Johnson says:

    What is the tax rate on OAS income if the claw-back threshold is not exceeded?

  15. Jean Dube says:

    I argued the clawback with CRA and here’s the reply I received: “Please note that any amounts that have been withheld from your OAS monthly payments are tax. Therefore, when you file your 2012 income tax return you may claim these amounts as tax deducted. This amount will then serve to either directly increase your refund or decrease your balance owing.”
    Does this indicate that I effectively am not loosing anything? With the clawback, I am receiving less income but can use the clawback amount as prepaid tax.

  16. John Newton says:

    Government obviously didn’t create registered retirement plans for the benefit of Canadian citizens, it’s nothing more than a tool to allow government to reduce OAP payments. Best thing to do is be like a Jew, just hide the money in your mattress, and when you turn 65 have absolutely no reportable income… Get the full OAP pension, plus the full suppliment. If you can somehow avoid paying into CPP during your life, it will also increase your OAP and suppliment, ask any immigrant who has only been in Canada ten years, is over 65, and is collecting the maximum.

    • Mona Sigler says:

      “hide the money in the mattress like a Jew”…brilliant comment from a bigot!

      • John Newton says:

        All the fathers of my Jewish friends said they did that. Is there anything wrong with that practise? How can I be a bigot for sharing that information? Considering Canada’s new police state controls over citizens finances etc., it seems like a very good idea to me.

        • Rick MacPherson says:

          John, Agree with your comment, however Mona is being somewhat one sided in calling anyone a bigot. She would have been better saying that if I were to agree with you, we would both be wrong!
          History is always on the side of fugal people of all races and nationalities and not just our Jewish brothers and sisters.

  17. Doereen Norris says:

    How much is guatanteed to an old age pensioner, if we
    only have $700.00 in cpp and other income

    • John Newton says:

      Hello D. Norris, You can go to the on line OAP pension charts to get that information. At only $700. with no other reportable income, you are entitled to the suppliment also. If you are between 60 and 65, and your spouse is already collecting OAP, you can also collec “The Allowance”. If you have any other source of income… rental, interest, etc. you may not qualify for a decent suppliment.

  18. Bob Orchard says:

    Nice Article. Just a note though that the example does not show a loss of almost 9% of the OAS but about 5.4% ($29 out of $540 per month at max rate). I think you used $29 out of the $349 loss instead.

  19. John Newton says:

    Hello Bob Orchard,
    I did not use any rate system; all I know is that our government is on a mission to reduce what they pay to seniors when they retire, so that government will have more money to finance their excessive immigration policies, and to provide special funding for privileged minority groups so they can build mosques etc. Government introduced the RRSP scam so they could have registered evidence that a person has an income at retirement, so as to reduce their entitlement to a government pension. Canada has become a police state that is involved in numerous corrupt activities, so as to control the lives of all citizens in this country, and even strip them of their basic right to free speech. That is why I moved from Canada and now live in Costa Rica. I am enjoying the “Pura Vida” and not suffering from excessive taxation or the problems created by excessive immigration. I even have a family doctor here, thank God I had enough brains to get out of Canada.

  20. Frank Browne says:

    How is CPP and OAS affected by receipt of a Provincial Government pension or vice versa?

    • Jim Yih says:

      CPP is not income tested. Only OAS is income tested

      • k says:

        How much income tax will be taken off CPP and OAS payment if I do not exceed the income thresholds for clawbacks? I want to know the net amount of the monthly CPP and OAS payments I will receive

        • Doug says:

          k – No income tax is deducted from either your CPP or OAS, unless you specifically ask for a withhold amount.

  21. JOAN REYNOLDS says:

    At what point in the calendar year does the government post the OAS threshold for claw-back. It doesn’t seem to be published until well into the current tax year, which doesn’t help those trying to plan a year or two ahead on how much sheltered investments they can cash out in a given tax year. I keep looking on the OAS site but they seem to bury crucial information like this or leave it very late to post it.

    • Jim Yih says:

      OAS works from July 1 to June 30. For example, when you do your 2012 tax return in April, that income is what is used for the OAS period from July 1, 2013 to Jun 30, 2014.

  22. Jeff Carman says:

    Jim:

    I am not sure I follow the comment around spending RRSP first….Is this because of the minimum withdrawal requirement that the government imposes?

    Thanks,

    Jeff

    • Jim Yih says:

      Spending RRSPs early is only helpful if the RRSP income after the age of 65 pushes your income above the OAS clawback threshold. If you will not be affected by OAS clawback (recovery) then develop an RRSP withdrawal strategy based on other factors and reasons.

  23. Roy Vincent says:

    Jim:

    One thing I can’t figure out is how, after a clawback, Service Canada sets the monthly OAS payments from July 1 to December 31 of the next year and the income tax withheld (box 22 of the OAS tax slip) for that year.

    I had my first clawback in 2011 — $1705.38. According to many websites, I’m supposed to get half of that as income tax withheld in 2012 and half in 2013. But this cannot be correct without qualification.

    For in 2012, box 22 of my OAS tax slip shows $708 (less than half).

    As well, in 2012, the total OAS cash deposited to my bank account plus the $708 equalled my full OAS amount of $6510.60. So here the OAS cash for the year and the income tax withheld were related. Is that relationship generalizeable for all clawbacks?

    How does Service Canada calculate these matters?

  24. anne deeves says:

    Dear Jim
    I recently took my retirement pension with school board but did not retire. For some unknown reason the Retirement Fund had retired me four years ago and hence semt me a payout of $50,000. This gave me an income of $103,000 as I am also on OAS, CPP, Teacher Retireand a full time substitute teaching job. So I will lose $4500 of this pension for next year when I will not have another high income year.
    Anne Deeves

    • Roy Vincent says:

      Anne

      Jim is the expert.

      But note this: One can file corrections to past income tax returns for ten years back — if this is to your advantage. Likely it will be.

      You will need a statement from your pension plan officer to the effect that because of its error you got $50, 000 as a pension payout in 2012 (I assume) when you should have been getting $50, 000 divided by 4 = $12, 500 for the past four years, including the 2012 year. The CRA would then revise your income taxes for the past three years, adjusting your income taxes for each of those years by the inclusion of $12,500 of pension income. You would then have just $12, 500 of pension income for the 2012 tax year to report and so would not suffer an OAS clawback that year.

      Of course, though all this looks correct, I may be out to lunch. To find out whether it’s correct (assuming Jim is too busy to respond), I’d start by phoning in to the CRA — to get to explain your position to a person and ask any questions that may occur to you.

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  26. David says:

    Dear Jim,
    I am not following your math example here, how do you arrive at $2,332 over if the threshold for 2012 is $69,562 or even $70,954 for 2013?
    “For example, if your taxable net income was $70,000, then you would be above the clawback threshold by $2,332″

  27. David says:

    Hello Jim,
    I have also heard that purchasing an Annuity can help with reducing OAS clawback, something to do with how they are taxed?
    Can you shed light on this?
    Thank you,
    David

  28. Bob says:

    I had a a large part of my OAS clawed back this year but my accountant did not split my pension earnings between myself and my wife . Turn 71 this year and need to do up a RIFF . Like you i am self employed and still working :-) just came back for a 10 year working retirement now i am simply just working.
    Thanks for the note on CPP and OAS , i sent it to my accountant.

  29. Rina Verbong says:

    I do not understand this. Can someone explain to me why, when I turn 65, I will not receive my whole Old Age Pension? I don’t understand, I receive a monthly gov’t pension cheque and will start to receive my Canada Pension in August. But when I turn 65, the gov’t will take the amount of my Old Age Pension off my pension!? That doesn’t make sense! Why will they??? This is my money that I worked for all of my working life, I earned a pension for the 31+ years with the gov’t! Some companies have pension plans and some don’t. So at 65 I start to receive my Old Age Pension. But when I start receiving it, I will notice that my pension cheque has been reduced to almost the same amount as my Old Age Pension! I have been working from the time I was 15 yrs old, that’s 50 years! I am entitled to my Old Age Pension and I am also entitled to my Pension! Why is my Pension going to be reduced almost by the same amount of my Old age Pension!!!
    This isn’t the same as taxes! This is wrong and I want an explanation!.

    • Doug says:

      Rina
      I’ve never heard of a pension plan that offsets for the Old Age Security (OAS) pension, but I have heard of many (including most of the federal pension plans) that offset (or bridge) with the Canada Pension Plan (CPP). I suspect that is what is truly happening in your case also.
      Whichever is the case, I suspect there was a similar offset when you made your contributions, but most people either were never aware of that or have long since forgotten that. By an offset on your contributions, I mean that instead of paying 6.5% (or whatever your federal pension rate was) on your whole salary, you paid a lower percentage on earnings up to the YMPE (for plans that are integrated with the CPP), and you only paid the full contribution rate on earnings above this amount.
      In simple terms, you basically get what you paid for.

      • Jim Yih says:

        Yes, I agree with Doug. You likely have a coordinated or integrated pension. The best thing to do is talk to your pension reps and get a better and more detailed explanation of how your pension works. This is not a tax and this is not losing your OAS.
        Jim

        • John Newton says:

          Hello Jim, Can you tell me if it is more profitable for a couple over age 65 to get a divorce, if they are jointly now collecting an old age pension and suppliment?
          Thank you

          • Doru Roman says:

            Hi John,
            And we are speaking about immigrants that come to only collect the welfare… and the local ones try to beat the system…
            Theoretically every couple can split, but shouldn’t they have different residency which cost double? And so goes the benefit of having two independent OAS

          • Doug says:

            John
            I’m not sure that I would say that it’s more profitable (see Doru’s comment on increased cost of accommodations), but I can confirm that the total amount of supplement (GIS) would always be more for two single pensioners than for a married couple.
            You don’t even have to divorce for this change in GIS, but you would have to be living separate and apart from each other.

  30. Dave says:

    Obviously not sure what pension plan Rina has , but the BC group of government plans do have an additional option of receiving an annuity at the time of retirement, which stops at age 65. The annuity approximates OAS and if the retiree got any advice it was not recomended. In any case the pensioner had to sign acknowledging that they would lose the annuity at 65.

    This annuity should not be confused with the CPP off set that you also lose at 65… and it also will have been fully explained to you at the time of retirement.

  31. Ann says:

    Hi Jim,

    1. Thank you for a great article. I’m in my late 40′s and I heard that having a large amount of RRSP’s, cash in accounts and even cash in TFSA lowers our OAS payments?

    2. You suggested spending RRSP’s before turning 65. Isn’t there a huge penalty fee for doing so (I think it’s 30%). I’m based in Ontario.

    • Doug says:

      Ann

      Jim may want to elaborate on this answer, but I’ll give you my 2 cents for now.

      1) None of the three things you’ve listed affect OAS payments at all, until/unless they produce taxable income that exceeds the clawback amount (approx. $70,000). TSFA’s never produce taxable income, so they never affect OAS payments. Any interest or other income resulting from cash will likely be taxable and could thus affect OAS payments if you have significant amounts. RRSP’s are taxable only as you withdraw them, thus Jim’s suggestion that you try to do so before age 65.
      2) There’s no penalty (that I’m aware of) for withdrawing RRSP’s before age 65, only the tax that you will pay on those withdrawals. There is a withholding fee that applies when you make the withdrawal, but you could get some/all of that back when you file your tax return if your income warrants that.

      • Doug says:

        Ann

        Further to my earlier reply, I should also have mentioned that any taxable income from RRSP’s or cash accounts (or any other source) would also reduce any benefits under the GIS (Guaranteed Income Supplement), which is part of the OAS program.

        GIS benefits are intended for low income seniors, so it’s not that I’m recommending that anyone strives to be eligible for GIS, but it’s something to be aware of anyway.

        The income levels for GIS vary based on your marital status and the age of your spouse, but they are all much lower than the clawback threshold, and they consider family income amounts.

    • Juan Eduardos says:

      Ann – Cashing in all my RRSPs at 55 allowed me to claim a higher supplement at age 65.

    • Doru Roman says:

      Ann,
      You need to cash in the RRSP before turning 65. At 65 you HAVE TO withdraw, by law, a certain amount of money from your RRSP, which adds to your yearly income. Every dollar you make will affect the OAS and GIS even before the clawback kicks in.

      Look at this site and see what the OAS and GIS rates are based on your income.

      • Doug says:

        Doru
        You may want to be a bit more cautious with your advice.
        I won’t pretend to be a tax expert, but I know that you don’t have to start withdrawing them at age 65. I believe that occurs at age 71 or 72. Jim is suggesting above that you MAY want to cash them in before reaching age 65 IF clawback is an issue (meaning if your income might be in the $70,000 range).
        It’s also totally untrue that every dollar you make will affect OAS and GIS. If you’re already over the GIS limit (approx. $16,700 for a single pensioner), additional income between there and the start of the clawback amount doesn’t affect OAS or GIS. For someone in that situation, withdrawing their RRSPs at a reasonable annual rate after retiring at age 65 might be much wiser than doing so prior to age 65 when they might still be working.

        • Doru says:

          Thanks Doug,
          OK, you’re right, I retract MUST from my statement. But it is more beneficial to take out all your RRSP before you reach 65 and transform it into a RRIF and from there you can invest.

          Based on the tables in the link I posted the OAS and GIS decrease the more income you declare. RRSP is considered an income. The more you delay transforming the RRSP into RRIF the more you have to withdraw, in the following years, increasing you income and therefore the tax. Therefore OAS and GIS will be less. It’s not quite a deduction for each dollar because rates are based on ranges of income

          • Doug says:

            Doru
            You’re still making too much of a generalization.
            If someone is a single pensioner and isn’t eligible for GIS because their income (from CPP, employment, interest etc) is already over the maximum of approx. $16,700 they can make RRSP withdrawals after age 65 of approx. $50,000 with absolutely no impact on their OAS or GIS.
            This is because they aren’t eligible for GIS anyway, and RRSP income won’t affect OAS unless they exceed the clawback minimum.

          • Doru says:

            Doug,

            Not qualifying for GIS because of the RRSP withdrawel is a big impact. Let’s not forget that GIS might be bigger than the OAS. And people withdrawing $50K from RRSP would not care about OAS and GIS anyway and they will not read or ask questions on this forum :), they have financial advisors.

  32. Juan Eduardo says:

    Hello Jim, You may have the answer to this question. When someone applys for the “Supplement” and the “Allowance” for a spouse, and Service Canada has not responed for “six months”, what does someone do? We send numerous letters to Service Canasda regarding this matter but nobody replies. We contacted the Appeals division and they say “we have nothing to appeal”, as no decision has been made yet. Any advice or information would be greatly appreciated. You can contact me at my email address. thank you.

  33. Doug says:

    Juan

    Six months is far too long without any explanation. Have you tried calling Service Canada at 1-800-277-9914, and if so what do they say is going on?

    • Juan Eduardos says:

      I have had my local MP file a request for information, with no reply. I have phoned and spoken to a man with a heavy Punjabi accent who said “your claims are still being processed if you have not heard anything”. There really isn’t any avenue left. I approached one other knowledgable fellow like yourself, he suggested I buy a turban, grow a beard, and re-apply. The original applications were originally attached to my application for OAP way back in February of 2012,
      one year before my 65th birthday. This long wait has us out of our apartment and now living in the basement of my daughters home, it’s getting a bit embarassing. Our gross pension is about $800. per month. I was born in Canada, and very shocked at how they are treating us. I do thank you for the reply.

      • Doug says:

        Juan

        I would be prepared to assist you by calling Service Canada and getting them on a 3-way call with you and your spouse (they won’t talk just to me otherwise).

        I have some time available tomorrow (Monday) if that could work for you? I would make the call to Service Canada and then connect with you.

        If you have any interest in this, email me at DRpensions@shaw.ca, and provide your ph# and a time tomorrow that works for you and your wife (I live in BC).

  34. Juan Eduardos says:

    The rule is that citizens who do qualify, are entitled to receive the OAP without question, and the payments do begin one month after turning age 65. When it comes to filing a claim for
    “The Supplement” or “The Allowance”, that they have the right to determine whether or not an applicant is entitled to these benefits, and that they can take as much time as they wish to make that decision. They claim there is no time limit, but they will pay up to eleven months (retroactive). Their attitude is to “shut up and wait”.

    I think there has been a lot of fraud since the Canadian government started operating their excessive immigration program a few decades ago. Some people who apply for the “Supplement” have income from businesses in places like Hong Kong etc., and the Canadian government needs months to investigate every applicant.

    There are also seniors here in Canada who own homes which they are receiving rental income from, and fail to mention such income when applying for the supplement. I understand the Canadian government’s reasons for conducting thorough investigations; I just wish they could get their investigations done in the three month period, which was once the case. I do thank you for your offer of assistance, but even my MP was told to “shut up and wait”.

  35. Doru Roman says:

    Hi,

    My question is: when I reach 65 and apply for the OAS and GIS (I presume this is the earlest age I can apply for them), is the amount shown on the Service Canada site for one person or for the family?
    For example if my OAS and GIS shows in those table $1200, is the amount per family or per person?

    Thanks

  36. Doug says:

    Doru

    Yes, age 65 id the earliest that you can apply for OAS and GIS.

    I don’t know for sure what tables you’re looking at, but the full basic OAS is currently $550.99 monthly per person. GIS depends on income and marital status, and the maximum GIS for a single person is $747.11 monthly, for a total of $1,298.10.
    If you are married and both over 65, you could each receive the full basic OAS of $550.99, but your maximum GIS would be $495.39 each, for a total of $1.046.38 each.

    Does this help?

    • Juan Eduardo says:

      The National Post recently reported that Canada is spending “23 billion” dollars each year to support their excessive immigration policies, and that the cost to operate the OAP is slightly less. Another report says that Canada’s seniors must now wait until age 67 to receive their old age pension, as the country cannot afford to pay it at age 65. And finally, a report on how 900,000 Canadians line up at food banks each month. My question is; Why wouldn’t government show more concern for the hungry, and the elderly who built the country, than they do about importing people “when the country has an almost 8% unemployment rate”? I guess buying votes from minority groups is more important.

      • Doru Roman says:

        Hi Juan,
        Don’t forget that if there are no fresh immigrants to pay today for the pensions, there will be only hungry retired people on the streets. The system doesn’t use everyone contributions over the years, but rather money deposited today by the working people. The changes in the law to delay the OAS benefits prove the fact that we have an aging population and not enough fresh “imports” to sustain the funding.

        You are wrong about both buying votes and minorities.

        • John Newton says:

          Hello Doru,

          You obviously haven’t see the very popular YouTube video titled: JUSTIN TRUDEAU PANDERS TO RADICAL ISLAM. This video has gone viral on the Internet and is waking up Canadians as to the pandering problem in Canada. The National Post provided figures that clearly indicate that there is little recovery of the 23 billion dollars through taxes being collected by immigrants.

          If there are no jobs, they have no choice but to go on welfare, plus certain nationalities are chronic welfare recipients, such as the culture reponsible for 95% of all gun related crimes in Toronto. All European countries made the same mistake Canada is involved in now, and the Muslims are rioting in the streets every night, but laws prohibit the media from reporting it. See Youtube video;
          A WORD TO RIOTING MUSLIMS. Modest immigration was once a good thing for Canada, but excessive immigration from third world countries has totally destroyed the quality of life in Canada, ask Mayor Ford “who got into an argument with Harper for dumping 100,000 plus immigrants in his cash broke city every year.

          One last word on pandering, see Youtube video EZRA LEVANT INTERVIEWS A MAN SENTENCED TO ISLAM. This Christian pastor was offered a jail sentence for voicing his concerns about Islam taking over Toronto’s public schools. Importing massive numbers of immigrants (we can’t afford) “and pandering to them for votes”, is as corrupt as any police state government can ever be.

          • Doru Roman says:

            But then it’s a matter of quality not quantity. Canada needs new laws to limit the number of refugees – they are the ones prone to stay on welfare for life and enforce their way of life to the others.

    • Doru Roman says:

      Thanks Doug for your reply.

      I am using the Service Canada tables, based on the income and marital status. I also don’t have full 40 years spent in Canada to be entitled to full OAS amount.

      http://www.servicecanada.gc.ca/eng/services/pensions/oas/payments/index.shtml

      • Juan Eduardo says:

        Hello Doru,

        Do not worry about your forty years, just get a legal separation and apply for the Supplement.
        You can still live with your wife, just have different mailing addresses. Even a lawyer will give that to senior couple who are attempting to receive the maximum dollars in Old Age Pension.
        Be sure you have no reportable income also.

        • Doug says:

          Juan – I’d be a little cautious about suggesting that someone should break the spirit if not the letter of the law. A legal separation with no true change in the relationship would be fraudulent if done just for the purpose of receiving more GIS.

          And there are sometimes unintended consequences. Even if the fraud were not discovered, this “separation” could disentitle a person to a survivor’s benefits when one of the “couple” dies.

          There’s a reason why they say that you can’t have your cake and eat it too.

          • Juan Eduardo says:

            Doug – An elderly man with a wife in a wheel chair couldn’t make ends meet, and the cost of medication was outrageous. His lawyer advised what I mentioned, so now he gets the medication, a new wheel chair, and they even gave him a used special equipped van for transporting his wife, and they are still in the same home with the higher income. They actually got the full divorce. Bank staff and lawyers are even telling aging people at the bottom of the food chain to cash in their RRSPs, so as to get the maximum suppliment. The government makes the rules, people are just playing the game according to to the rules presented to them.

        • Doru says:

          There are ways of beating the system but they can eat you later. There are smart people that made the laws, they thought of everything, so it’s up to everyone to think of consequences or get burnt.

          • Juan Eduardo says:

            Hello Doru, I thought your post was funny. How do you burn an eighty year old person “especially later”?
            Numerous immigrants are caught defrauding government every day, they are not fined or even deported, so why would they pick on an old couple on their last legs? Anyone on a suppliment usually have no real estate or anything anyway.

          • Doru says:

            Juan,

            They can get their GIS cut completly for fraud.

            And the wheelchair does not have any relevance. All seniors might invoke the same excuse to get a divorce and cash separate benefits.
            Who’s drawing the line where couples don’t make ends meet? You have to agreee, someone is breaking the law, there maight be multiple people that do that.

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  38. StuartOverTaxed says:

    Well then one has to watch out for the dividend gross up which can put you over the clawback.
    What you can do is convert some stock to REITS which has a good portion of their income treated as return of capital which is not taxed.
    Then after 65 I will meltdown my RRSP over the next 18 years and put the max in my TFSA so after the meltdown I can draw income from the TFSA which should have a income stream equal to what I have been withdrawing.
    The problem is the clawback if one is in the top tax bracket 51% is brings one to an effective tax rate of 70% and it did make major withdrawals before age 65 but I think those over 65 should not be forced to gross up their dividends and this is grossly unfair and over taxation.

  39. Irene says:

    I have recently returned to work, and yes I am over the age of 70, so I am wondering how much of an additional income I am allowed to earn before I get trapped with a “clawback”? Any insight into this would be very helpful and informative the the amount of hours per week I can be scheduled. Thank you for your input.

  40. Doug says:

    Irene

    As Jim said in the above article, the clawback starts if your net income exceeds $70,954 (for 2013). Subtract any other income amounts (e.g., OAS, CPP, RRSP, interest etc..)that you might have, and you will know how much extra employment income you can have before your OAS starts to be clawed back.

  41. John Newton says:

    The Clawback regulations is only one area where government has decided to attack Canadian seniors. Elderly Canadians are also restricted from taking long vacations outside their province.
    At this time an Ontario senior can only vacation outside the province for six months in any year “or they lose their health care coverage”. In addition to that situation; Any seniors who are collecting the Supplement in their Old Age Pension “Are also subject to House Arrest” by the Canadian government, as they cannot be outside Canada for six months, or they will lose that portion of their Old Age Pension.
    It appears that the Canadian government does not want their seniors to live in a location which is more affordable, but want them to stay in Canada, and suffer with the high costs of surviving here.

  42. Thanks for the good writeup. It in reality was once a amusement
    account it. Look complicated to more introduced agreeable
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  43. Peter Hooper says:

    Hi Jim, just a clarification about how the OAS clawback increases one’s effective marginal tax rate. The 15% value overstates the increase because it ignores the fact that the amount clawed back is not taxed. Suppose my marginal tax rate is 33%. Given additional income of $100, I lose $15 to the clawback and (0.33)(85) = $28.05 to taxes, giving an effective marginal tax rate of 43.05%. The increase depends on the marginal tax rate, but is about 10%, not 15%.

    I think this a fairly common error; e.g., it occurred in a column by Andrew Allentuck that appeared in the Edmonton Journal last October.

  44. Charles Choi says:

    My parents are currently receiving OAS and GIS. They want to sell their condo where they reside in order to free up some cash flow. Will this trigger OAS and GIC clawback?

    • Doug says:

      Charles

      Selling their principal residence will not have any immediate impact on either their GIS or the OAS clawback. Should they invest or otherwise earn taxable income from the proceeds of the sale however, that would definitely affect their GIS amounts. It would have to be very substantial though, to take them out of the GIS eligibility range and into the OAS clawback range.

      • Juan Eduardos says:

        I thought I’d share this with you. An immigrant who enters Canada at age 55 (does not work for ten years), and then can collect a monthly pension of $1,047.43 (which includes the GIS). On the other hand, a person who worked their entire life in Canada, and has a yearly pension income of $16,464.00 “only gets $561.73 per month in OAP”.
        And government claims they are not pandering to minority groups.

  45. Dave says:

    Please provide the basis of your information that the 10 yr immigrant gets 1047.43 per month

    A 10 yr immigrant gets 10/40ths of OAS or 137.89 per month and the Service Canada website implies that if only a partial OAS is being received then something less than 100% of the GIS amount will be received. Even if they got max GIS which is currently about 747.00 a month the total is significantly less than you quoted.

    • Dave, You obviously do not undersand how the “Supplement” works. You only need ten years in Canada to receive the supplement, which brings you up to the amount I have indicated. Not having 40 years means nothing if you have no other income “like RRSPs” “company pensions” or a weak CPP. If you want more information write me at
      tje2tk (at) ymail.com

  46. Dave says:

    http://openpolicyontario.com/wordpress/wp-content/uploads/2012/09/TOOL-questionaireV7.pdf

    Yikes…. While I was right on the amount of OAS a 10 yr immigrant gets, further research indicates they’ll get Max GIS – PLUS extra GIS , which would bring their monthly amount to 1300.00

    The above link explains, also keep in mind that the numbers they quote are for 2012.

    • Doug says:

      Dave
      For better or for worse, the government figured that the full basic OAS and the max GIS were the lowest total income that anyone should have to live on. That means that if someone is only eligible for a partial OAS, the GIS would have to be “topped up” to reach that same total.

      Originally that applied even if someone had an OAS of even 1/40th, but that was later pro-rated if they had less than 10/40ths OAS and the full top-up applies only above 10/40ths (and after any period of immigration “sponsorship”).

  47. Jenny says:

    my parents just sold the home and down size to a condo. They are wondering how would the money they received from selling their own home affect their OAS?

  48. Des H says:

    A lot of interesting comments/queries on OAS and OAS clawback. My net income has forced me to consider options to prevent OAS clawback and I’ve found the income splitting capability is the easiest option. I’m not an expert but from going thru various option, a married couple can have a combined net income up to $140,000 before having OAS clawback by using the income splitting. From my perspective, that is a nice problem to have and no one in the same situation should be complaining.

  49. Meo says:

    OK…I’m confused as to why withdrawing RRSP money before age 65 is a good idea.

    Only when income is over $69,562.00 will OAS be affected…so unless I earn more than $69,562.00 on my RRSP investments per year it shouldn’t matter, right?

    Say I’m working at age 60 and earning $30,000.00 per year and I withdraw $10,000.00 RRSP per year (income = $40,000.00) v. withdrawing $40,000.00 RRSP at age 65. How is the former more beneficial?

    Is it only because the $40,000.00 left in my RRSP is earning taxable income before I withdraw it, so I’ll be taxed on that in addition to the $40,000.00

    • Doug says:

      Meo

      If RRSPs are your only source of income after retirement, you’re basically right that this strategy would only be beneficial if you’re talking about RRSP withdrawals over the clawback threshold.

      At the other end of the scale though, if RRSPs were your only source of income after retirement, any amounts withdrawn after age 64 would affect your GIS entitlement.

  50. Dave says:

    Yes and if one of them dies and the other gets their estate then they would both lose the OAS. (The present amount is 115,000 when you lose all of OAS.)

    If the surviving spouse doesn’t need all the money then depending on their age and situation maybe its time to give the kids some money!

    • Dave says:

      Actually for 2014, Income of 65000 plus OAS of 6600 will take you to the start of clawback territory. For every dollar over that amount .15 is reduced from the 6600.

  51. Badsha.M.Z says:

    Hi Jim,

    I am senior, pensioner, having a valid PR Card currently on vacation for the last 4 months. Please inform me that how many months can I be out side Canada without losing my Pension (CPP and OAS) and my medicines and health check up from Health Canada as well.

    Please advice me though my email ID and oblige.

    Thanks and best regards.

    Badsha.M.Z

    • Dave says:

      CPP …. There is no restriction on time out of Canada.
      OAS …. Depends on how many years your OAS pension is based on.
      Medical…. most provinces are 6 months some 7.
      Medicines…. most provinces have prescription fill limits, which in affect determines time limits.

  52. matthew says:

    hello . excellent site. when you begin to receive pension (OAS, GIS and provincial)..
    will the amount change if you move to another province.
    considering that you have no other income , will the federal monthly be unchanged. i guess the provincial amount would very across the land, huh?

    also, are you allowed to live in another country
    and not lose your OAS? i see many seniors saying they “moved to eg. Burma, Equador, Florida, ..whatever.
    do they still receive the same OAS, supplement, provincial PP ?
    i am wondering if this is possible , as you grow older you cannot take the canadian winters .
    thanks in advance.

    • John Newton says:

      If you are collecting the Supplement in your Old Age Pension you can only be out of Canada 241 days each year.
      Stay out longer and you lose that pension. Provincial health care is the same, stay out too long and you lose your health care coverage. Upon returning to Canada you must re-apply and buy private health insurance for 90 days, which could be expensive if you are an elderly person. Canada’s seniors are under house arrest.

      • Doug says:

        John/Matthew

        There is no such rule regarding being out of Canada for more than 241 days each year for GIS (Guaranteed Income Supplement) purposes.

        The first criteria for GIS eligibility is that you must be resident in Canada, which is defined as “making your home in Canada and ordinarily living in Canada.” If you meet that criteria, you are allowed to have temporary absences from Canada, but GIS will be suspended if any single absence exceeds 6 months.

        • John Newton says:

          The rule reads “the month you leave” plus six months. The 241 day rule is for Ontario health coverage.

  53. matthew says:

    John, thanks for the prompt reply.
    So i guess those Canadians who talk about living in Burma, Equador,etc.. must not be collecting OAS or GIS, huh? They must have emigrated there and live on other source of income.
    And those Forbes articles about the best place to retire is pretty much not meant for the average Canadian stiff who works his her 20-40 years contributing to CPP.

    The other thing that is not discussed here is how much would you lose in Supplement if you should decide to go back to work . eg. if you earn $2000 monthly from part-time work , does that mean you lose your $700 monthly GIS?
    If so, how would this encourage one to keep working after 65?

    • John Newton says:

      You cannot earn one dollar if you are on the supplement.
      Any earnings are deducted dollar for dollar, you would have to work under the table. You can retire outside Canada but only for 241 days in each year. Once you lose your health care coverage for being outside a province for more than 241 days “it is a major job to get the coverage back”. A couple over 65 would have to pay a heavy premium for private insurance for three months before they are reinstated. Canadian seniors truly are under house arrest by government. Some elderly Canadians purchased retirement homes in other parts of the world before they discovered this.

      • Doug says:

        John

        You should check your facts before posting answers here!

        GIS is never deducted dollar-for-dollar. It is generally deducted 50 cents on the dollar, but not always. There are some provinces that offer a supplement top-up and sometimes they deduct at 50 cents on the dollar too. This has the same impact as a dollar-for-dollar reduction, but it only applies to residents of some provinces and it only applies to those who are eligible for near-maximum GIS where the provinces are offering there top-up amounts.

        And again, there is no 241 day limit for anything to do with OAS or GIS eligibility.

    • Doug says:

      Matthew

      OAS can be paid anywhere in the world, IF you have at least 20 years of residence in Canada after reaching age 18. GIS is paid only to OAS residents in Canada, allowing for temporary absences from Canada for up to 6 months. CPP is payable anywhere in the world, with no restrictions at all.

      GIS entitlement is generally based on your annual income for the previous year. If you earned $2,000 working part-time for one month, that would generally reduce your GIS entitlement by about $1,000 in the following year. If you earned $2,000 part-time every month for a year, that would probably eliminate your GIS for the following year. But you would have $24,000 of earnings instead of $8,400 of GIS. That’s a fair bit better in my books!!!

  54. John Newton says:

    If you get a $5. per month increase in your CPP, the OAP will reduce your GIS by $5.

  55. John Newton says:

    This is a cut and paste I just found: Once the senior starts bringing in income, Guaranteed Income Supplement is clawed back at $0.50 for every $1 of income. It will continue to be clawed back until the maximum income threshold is met as indicated above.
    This means if a senior collecting GIS found a job for $10. per hour, he could keep $5. per hour until the threshold is met, and then his GIS would no longer be available to him. Who would be crazy enough to work for $5. per hour?

  56. Dave says:

    Hmmm. Now lets see, if a bank president gets 10 million a year, he pays almost 50% (4.92 million)in income taxes (Source taxtips.ca calculator – using Ontario). Are you saying he’s “crazy” to work further because for every dollar he makes the gov’t takes .50. …. and the lefties want to raise the taxes on high income earners. You finally seem to understand taxes are a disincentive to work and so are welfare benefits (GIS)

    But… the crazy pensioner you refer to might want to work for pride AND the 20800 per year ($10.00 per hour 40 hour week) would likely improve their lot in life substantially. Even losing 9000 GIS would still leave them an additional $11800.

  57. John Newton says:

    According to the Nation Post and a study done by the Fraser Institute, the Canadian government (borrows) “23 Billion dollars) each year to support their excessive immigration policies, and very little is recovered as a result of this large number of immigrants paying personal income tax. Knowing that this corruption exits keeps a person like me from paying even one more cent in tax to government. Canada has entire cultures which have underground economies, so why shouldn’t the people who work in Canada not work for cash?

  58. John Newton says:

    I think that anyone who chooses to support Canada’s police state politically correct government has every right to do so. Choosing a life of denial is normal in Canada, and we wouldn’t want anyone to be considered abnormal would we. Former US president George Washington once made this quote: If freedom of speech is taken away, then dumb and silent we will be led, like sheep to the slaughter. Canadians are the most sheepish people in the world.

  59. matthew says:

    ok, time out. there is a proper place to debate pros and cons and what George Washington said, but let’s not bring USA up in this Canada pension website to hijack a good intention.

    my concern is that when it is time for us to collection pension (OAS, provincial pension, and for most of us who in spite of having worked and contributed to CPP, and say BC or Alberta or Quebec,etc.. Provincial Pension, will need some extra
    from the GIS. which i was told would bring a 65 year old a total pension of about 1100 in sum.

    so, let me see if i understand you Doug.
    if i decide to move to a warmer and cheaper place outside Canada, i will still receive OAS and say for BC, Ontario or Quebec PP,…
    but i won’t be eligible for the GIS . GIS is only a supplement if i remain in Canada.
    but if i go away for less than 6 months to a warmer place,
    coming back after winter, i will still get my OAS, and of course, coverage for medical .

    the cautionary note is NOT TO BE AWAY FROM CANADA longer than 6 months.

  60. Juan Eduardos says:

    I hate to answer for Doug, but this is what I’ve learned. It’s a six month limit for GIS and provincial health care. Don’t be late coming back or you will lose the health care and the GIS “and you will have to re-apply for both”. The wait to get the health care back is three months, I’m not sure about the GIS.
    An earlier post mentioned “house arrest” for Canada’s seniors on GIS, I have to agree with that.

  61. John Newton says:

    Hello Juan Eduardos; The Canadian government discovered that vast numbers of people were entering Canada, staying the required number of years, getting GIS and health coverage, and then returning to the jungle or desert full time. To deter immigrants from doing this the six month regulations had to be put in place. It’s too bad that Canadian born citizens are also being punished.

  62. Dave says:

    Hi Matthew

    How many years have you been in Canada? I ask because the years are relevant to answering your OAS question?

    What Provincial Pension Plan specifically, for you, are you referring to? How much do you expect to receive. This amount will reduce any GIS

    CPP – Live and collect anywhere you want, year round. How much do you expect to receive? This amount will reduce any GIS.

    Any investment income will also reduce your GIS

    Federal GIS may not even be relevant for you depending on your total income. In my opinion those eligible to receive any Federal GIS won’t have any money available to be travelling anywhere, period.

    Medical benefits – Most provinces require you to be in the province 5-6 months per year. (Out of province 6 or 7 months a year). (BC is 7 months allowed out)

  63. Juan Eduardo says:

    Dave – You can live in many Central and Latin American countries for half of what it costs to live in Canada, and that’s the reason people want to get out of the country “not because they are wealthy enough to travel”. For example: The public health care (which is as good as in Canada) is $40. per month and also includes some perscribed drugs. It’s just the loss of the GIS that keeps many elderly Canadians from returning to Canada every six months, not the health care system (which is dteriorating as a result of Canada’s excessive immigration policies).

  64. Doug says:

    John, Matthew, Juan and Dave

    I’m possibly a little late for the party, but I’ll throw my two cents in anyway!

    As Dave said, whether OAS is payable outside of Canada depends mostly on whether or not you have the required 20 years of residence in Canada after age 18. If you do, it’s fully portable anywhere in the world, with no restrictions on length of absence.

    If you don’t have the necessary 20 years of residence in Canada, OAS eligibility is similar to GIS eligibility in that it’s payable only to residents of Canada. The definition of who’s a resident of Canada for OAS/GIS purposes is intentionally vague. It’s not as simple as 6 months plus a day in Canada and you’re a resident.

    The definition for being a resident in Canada under the OAS act is someone who “makes their home in Canada and ordinarily lives in Canada”. Once you meet that definition, you are allowed to have temporary absences, and both benefits will continue to be paid for the month of departure and for the following 6 months. Theoretically, you could return to Canada for a day during that sixth month, and then depart again for another temporary 6-month absence. I say theoretically, because you might be able to get away with that once or twice and still convince the department that you were still truly residing in Canada and that your absences were only temporary. Do it regularly however, and it might be difficult to claim that you “ordinarily lived in Canada”.

    On the opposite side of the coin, you might be physically present in Canada for 7 months every year and only away for 5 months and still not be considered a resident in Canada. This might occur (for instance) if you owned a home outside Canada and only rented or stayed with friends or relatives when you were in Canada. It’s not as simple as home ownership determines where you reside, but it’s one of the factors that would be considered. I raise this issue, because nor is it as simple as keep your absences under 6 months and you’ll continue to be eligible for GIS (and OAS if you have less than 20 years of residence).

  65. Des H says:

    John N,I agree with Matthew – this is a “minimizing old age security clawback” forum so many of your points have no place in here.
    Also, I must remind you that everyone in Canada has immigrants somewhere in there family even if you have to go generations back.
    Being an immigrant, now a Canadian citizen and having retired after serving 35 years in the Canadian Army defending your right to make these comments – this is not the proper place

    • John Newton says:

      My wife is an immigrant from the Philippines, I am bringing a Cuban here to be a domestic nanny in my daughters home in September, and it costs me $400. per month to fees a group of elderly Filipino people back in the jungle each month, plus I am off to Costa Rica on a humanitarian mission in May. I DON’T DISLIKE IMMIGRANTS, I am only upset that the Canadian government is borrowing 23 Billion dollars each year to import them “which is money we cannot afford”. We must share our crops, but don’t give away the farm.

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