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Changes to Guaranteed Income Supplement

Starting in July 2020, there will be changes to the income that can be earned by seniors without affecting the amount of the Guaranteed Income Supplement (GIS) that they receive.

Previously, the first $3,500 of employment income earned by seniors was excluded from the calculation of the taxpayer’s income for the purposes of GIS.

This has been expanded to exclude an additional $1,500 of employment income. As well, one half of the next $10,000 of income earned will also be excluded.

The type of income has been expanded to also exclude self employment income from the calculation.

These changes can have a significant affect on the amount of GIS that a person can receive.

GIS is reduced annually by 50% of whatever income is not excluded. Under these changes, a senior earning $15,000 of wages in a year could have an additional $6,500 of income excluded from their income calculation, resulting in a potential annual increase of $3,250.

These calculations are based on the prior year’s net income, meaning that the July 2020 changes will be based on the taxpayer’s 2019 income.

If a taxpayer files their tax return on time, they do not need to apply for GIS.

File Taxes On Time

If you have children, you and your spouse most both file your personal tax returns in order to receive the full amount of the Canada Child Tax Benefit (CCTB). In order to ensure there is no delay in receiving your CCTB, you must file your return by the appropriate due date. Even if you are delayed and do not forward your tax returns until the end of the year, the government will still back-date any payments which were owed to you.

This is similar to many other government programs. If you are eligible for a GST refund, or the Guaranteed Income Supplement, your returns must be filed by April 30th in order to ensure your payment will not be delayed.

The payment you receive in July for these programs is based on your personal tax return from the previous year. In short, if the government owes you money, the sooner you get your tax return to their office, the sooner you will receive your funds.