Here is a brief overview of the key federal and provincial government pension or financial assistance programs and guidelines that you should be familiar with. They can be modified periodically, of course, so obtain a current update of regulations and criteria relevant to your circumstances. In addition, there could be exceptions to the general guidelines outlined. For more information and assistance, including eligibility benefits, indexing and payment outside of Canada, contact the Income Security Programs Branch of the Human Resources Development Canada (HRDC) office closest to you. Their web site is www.hrsdc.gc.ca, or look in the Blue Pages of the phone book under Government of Canada. Also contact your closest Health Canada office, found in the same Government of Canada section of the phone book (Blue Pages) or at www.hc-sc.gc.ca.
Keep in mind that the OAS, GIS, SPA and CPP benefits are not paid automatically. You have to apply for them. You can arrange to have these funds automatically deposited into your bank account.
Old Age Security Pension (OAS)
The OAS pension is a monthly benefit available to anyone 65 years of age or over. OAS residence requirements must also be met. An applicant’s employment history is not a factor in determining eligibility, nor does the applicant need to be retired. You have to pay tax, federal and provincial income tax, on your OAS pension. Higher income pensioners also repay part or all of their benefit through the tax system, referred to as a clawback. This clawback is taken off the OAS pension at source, based upon the previous year’s tax return income. Contact your local HRDC office or Health Canada for the current amount of the clawback. This amount could be increased by the government over time.
All benefits payable under the Old Age Security Act are increased in January, April, July and October of each year based on increases in the cost of living as measured by the Consumer Price Index (CPI).
Guaranteed Income Supplement (GIS)
The GIS is a monthly benefit paid to residents of Canada who receive a basic, full or partial OAS pension and who have little or no other income. GIS payments may begin in the same month as OAS pension payments. Recipients must re-apply annually for the GIS benefit. Thus, the amount of monthly payments may increase or decrease according to reported changes in a recipient’s yearly income. Unlike the basic OAS pension, the GIS is not subject to income tax.
Allowance and Allowance for Surviving Spouse
The allowance is over and above the Guaranteed Income Supplement for qualifying individuals aged 60 to 64. It is designed to recognize the difficult circumstances faced by many widowed persons and by couples living on the pension of only one spouse. Benefits are not considered as income for income tax purposes.
Provincial Social Security Supplement Programs
Some provinces have guaranteed annual income systems. If you are 65 years of age or older and you receive the federal Guaranteed Income Supplement, you might qualify for additional provincial benefits which ensure that your income does not fall below the province’s guaranteed income level. To apply for provincial assistance, contact your provincial government.
Canada Pension Plan (CPP)/Quebec Pension Plan (QPP)
The CPP is a contributory, earnings-related social insurance program. It ensures a measure of protection to a contributor and his or her family against the loss of income due to retirement, disability and death. The plan operates throughout Canada. Quebec has its own similar program, the Quebec Pension Plan (QPP), which is closely associated with the CPP. The operation of the two plans is coordinated through a series of agreements between the federal and Quebec governments. Benefits from either plan are based on pension credits accumulated under both, as if only one plan existed.
Benefits paid by the CPP are considered as income for federal and provincial income tax purposes. Youmust apply for all CPP benefits and should apply at least six months before you want to receive it.
A CPP retirement pension may be paid at age 60. However, the contributor must have wholly or substantially ceased pensionable employment. Contributors are considered to have substantially ceased pensionable employment if their annual earnings from employment or self-employment do not exceed the maximum retirement pension payable at age 65 for the year the pension is claimed. Once 65, a pensioner is not required to stop work to receive a retirement pension.
All CPP benefits are adjusted in January each year to reflect increases in the cost of living as measured by the Consumer Price Index.
CPP Disability Pension
To receive a disability pension, a contributor must have had to stop working because of his or her medical condition, must have made sufficient contributions to the plan and must be under the age of 65.
A contributor is considered to be disabled under CPP if he or she has a physical or mental disability which is both severe and prolonged. Severe means that the person cannot regularly pursue any substantially gainful occupation. Prolonged means that the disability is likely to be long continued and of indefinite duration, or is likely to result in death.
CPP Surviving Spouse’s Pension
A spouse of a deceased contributor or a person who lived in a common-law relationship with a contributor before his or her death, may be eligible for a survivor’s pension. To qualify, the deceased must have contributed to the CPP during at least one-third of the number of calendar years in his or her contributory period. If the deceased’s contributory period was less than nine years, then at least three years’ worth of CPP contributions are needed. If the contributory period was more than 30 years, at least 10 years’ worth of contributions are required.
CPP Death Benefit
A death benefit may be paid to the estate of a deceased contributor, if contributions to the CPP were made for the minimum qualifying period. This minimum period is the same as for a surviving spouse’s pension. The death benefit is paid, as well, where there is no will or estate. In this case, the benefit is usually paid to the person or agency responsible for funeral costs.
Veterans’ Pension
Veterans Affairs Canada provides a wide range of services and benefits to war veterans and former members of the Canadian Armed Forces. Assistance is in the form of disability pensions, survivors’ pensions, and help with funeral and burial expenses. For more information, contact the nearest Veterans Affairs district office, listed in the Blue Pages of your telephone directory, under Government of Canada or on the Internet at www.vac-acc.gc.ca. You must apply for all pensions or services provided by Veterans Affairs Canada.
Social Security Programs from Other Countries
In many countries, nationality is an important criterion in determining eligibility for social security benefits. Noncitizens may be required to meet special conditions before they can receive a pension, and the payment of benefits to noncitizens living abroad may be severely restricted or even prohibited. Through the social security agreement between Canada and selected countries, including the U.S., citizens and noncitizens are entitled to those benefits on the same conditions as the citizens of the other country. Most important, Canadian residents may start to receive benefits from the other country.
