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.