Enhancement to the Guaranteed Income Supplement

As part of the Budget 2011 that received Royal Assent on June 26th 2011, the Government of Canada has announced an enhancement to the Guaranteed Income Supplement (GIS).

As of July 2011, eligible seniors will receive additional annual benefits of up to $600 for a single senior and up to $840 for couples. These seniors will have their GIS or Allowance benefits automatically adjusted to reflect the change (no application required). Service Canada will notify seniors if they are eligible for the enhancement to the GIS.

Introduction

The Government of Canada announced an enhancement (otherwise known as the ‘top-up’) to the Guaranteed Income Supplement (GIS) (including Allowance and Allowance for the Survivor) in the 2011 Budget. Effective July 2011, seniors with little or no income will see a top-up to their monthly GIS benefits.

Factors or Specific Issues

GIS benefits will automatically reflect the GIS enhancement (top-up) therefore no additional application is required from clients. Clients will receive a top-up to the monthly benefit if they fall under one of the categories listed below: ­

  • Client is single, widowed, divorced or separated and has an annual income less that $4400. They will receive up to $50 per month.
  • Client is married or in a common-law relationship with a pensioner and their combined annual income is less than $7360. They will each receive up to $35 per month.
  • Client is married or in a common-law relationship with a non-pensioner and their combined annual income is less than $8800. They will receive up to $50 per month.
  • Client is married or in a common-law relationship with an individual who is receiving the Allowance and their combined income is less than $7,360. They will each receive up to $35 per month.

Clients should expect to receive their GIS Award letter sometime between July 13th and 26th. An insert outlining the eligibility requirements for the additional income will also be included with their letter for to those beneficiaries who meet the qualifying conditions listed above. It will not detail the amount of top-up the beneficiary will be receiving. The top-up amount will be included in the amount shown in the July Payment section on their award letter (ISP-3057). As applied to all OAS benefits, the enhancement will be subject to quarterly indexation, in accordance with the Consumer Price Index (CPI).

Below is a chart outlining the maximum income for GIS enhancement eligibility:

Type of Benefit

Marital Status

Income limit to receive full GIS enhancement

Full GIS enhancement monthly amount

Income limit to receive pro-rated GIS enhancement

Guaranteed Income Supplement 

Single, widowed, divorced, separated (incl. involuntary)

 

$2000

 

$50

 

$4400

Married/Common-law pensioners

 

$4000

 

$35

$7400

Married/Common-law pensioner with non-recipient

 

$4000

 

$50

$8800

Married/Common-law pensioner with Allowance recipient

 

$4000

 

$35

$7400

 

Allowance

Married/Common-law

 

$4000

 

$35

 

$7400

Allowance for the Survivor

Widowed

 

$2000

 

$50

$4400

Questions and Answers

1. Question: Why is the GIS benefit being enhanced?

Answer: This newest increase to the Guaranteed Income Supplement will further improve the financial security and well-being of Canada’s most vulnerable seniors.

2. Question: How much additional annual benefit will seniors receive?

Answer: Effective July 2011, eligible seniors will receive an enhancement to the GIS of up to $600 for single seniors and $840 for couples. Single recipients with an annual income of $2,000 or less and couples with an annual income of $4,000 or less (excluding OAS benefits), will receive the full increase.

3. Question: Who is eligible to receive the enhanced GIS benefit?

Answer: The enhanced GIS benefit will be available to low-income seniors who are currently receiving, or have applied to receive, the Guaranteed Income Supplement and have little or no income other than GIS and Old Age Security.

4. Question: How will the adjustment be calculated? Do seniors need to apply?

Answer: The enhanced GIS benefit, or top-up, will be calculated automatically, and will be included in the monthly payment, to be issued on the regularly-scheduled dates at the end of each month. Seniors do not need to apply for the top-up. Eligible seniors will have their GIS or Allowance benefits automatically adjusted to reflect the change.

5. Question: When will seniors begin to receive their payments?

Answer: Eligible seniors could see an increase to their payments as early as the end of July.

6. Question: Will the GIS top-up be indexed?

Answer: Yes, like all other OAS benefits, the GIS top-up will be reviewed quarterly in accordance with changes in the Consumer Price Index (CPI). OAS benefits will never be decreased in the event of a decline of the CPI.

7. Question: Why not provide the top-up to all GIS recipients?

Answer: The GIS top-up will ensure Canada’s most vulnerable seniors are provided with additional assistance. This increase will provide targeted support to the lowest-income seniors, at a reasonable cost, given the current fiscal environment. This is the third time the government has increased GIS benefits. In January 2006 and January 2007, GIS benefits were increased by a total of $36 for a single recipient and $58 per couple. These increases represent a 7 percent increase over and above the quarterly CPI adjustments for OAS benefits. In 2009-2010, $34.7 billion in OAS benefits was provided to 4.7 million beneficiaries, including $7.7 billion in GIS benefits to low-income seniors.

8. Question: Will the increase affect the GIS earnings exemption?

Answer: No, there are no changes to the GIS earnings exemption. Individuals will continue to be able to take advantage of the $3,500 GIS earnings exemption, which reduces barriers to work for low-income seniors. Employment income up to $3,500 is removed from the total income, which allows GIS recipients to keep more of their benefits.