Canada’s tax and benefit system is making life harder for low-income seniors who continue working to pay the bills, according to a new report from the Montreal Economic Institute. The think tank is recommending the federal government overhaul how the Guaranteed Income Supplement, a benefit for this group of individuals, is clawed back.
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Eligible seniors can receive a little more than $13,000 a year from GIS. Once they work and earn more than $5,000, the federal government begins clawing that benefit back. For every additional dollar earned, GIS payments are reduced by 50 cents, before income tax and payroll deductions are applied.
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The clawback issue was recently flagged by another think tank. A November 2025 report from the C.D. Howe Institute found that Canadians with a modest pension income that includes CPP, as well as OAS and GIS, face some of the highest effective tax rates, often exceeding 75 per cent.
To address the problem, the report recommends raising the amount seniors can earn before GIS benefits are clawed back to $30,000. That threshold was chosen because it’s around Statistics Canada’s poverty line for individuals in urban areas, Mr. Giguère said.
Alternatively, maybe they could reduce benefits to affluent seniors and increase benefits for folks who have less. 🤷♂️
Also, impliment UBI
UBI for seniors makes a lot of sense. Of course, baby boomers (and later large population waves) may put a strain on such a system.
Also make a society where seniors can retire properly and not have to work for low income…
low-income seniors who continue working to pay the bills
this should not even be a sentence in a civilized, developed country
Agreed. I thought that was the goal of the OAS/GIS system. It sounds like the cost of living has outpaced the floor the system provides for poor seniors.
