In addition to the CPP (and Quebec Pension Plan) to which all working Canadians and their employer contribute, and the basic Old Age Security benefit, another pillar of the government pension program is the Guaranteed Income Supplement and Allowance (GIS) which is an income-tested benefit payable to seniors with little or no other retirement income.
Currently low-income seniors who are eligible for GIS and who wish to continue working, will see a significant reduction in their GIS benefit for every dollar of employment income that they earn. At present, the GIS earnings exemption allows low-income seniors and their spouses to earn up to $3,500 of employment income per year without triggering a significant reduction in GIS benefits.
Budget 2019 proposes that the GIS earnings exemption be adjusted beginning with the July 2020 to July 2021 benefit year to increase the full GIS earnings exemption from $3,500 to $5,000 per year, and to provide a partial exemption for up to another $10,000 of annual income. Eligibility for the earnings exemption will be extended to include both employment income and self‑employment income.