Wednesday, October 21, 2009

OAS, GIS, Clawback - for Seniors in Canada

Guaranteed Income Supplement (GIS) and GIS Clawback: Million Dollar Journey

Guaranteed Income Supplement (GIS) and GIS Clawback

Posted: 10 Aug 2009 03:30 AM PDT

I received an email from a senior reader (married) recently who was wondering what he can do about avoiding the GIS clawback as he was soon due to convert his RRSP to an RRIF thus a forced withdrawal.

Before we get into the question, lets start with the basics.

What is Guaranteed Income Supplement (GIS)?

GIS is a non taxable benefit for low income seniors which basically tops up Old Age Security (OAS). The maximum GIS benefit is approximately $7,800 per year, which combined with OAS (max $6,200/year) is around $14,000 per year.

In addition to the extra cash, there are other benefits as well like drug coverage.


To be eligible for GIS, the senior must qualify for OAS and meet the income requirements. Note that old age security does not count towards income when calculating the GIS threshold.

What’s counted as income (from govt)?

  • Canada Pension Plan or Qu├ębec Pension Plan benefits
  • private pension income and superannuation
  • foreign pension income
  • RRSPs that you cashed
  • Employment Insurance benefits
  • interest on any savings
  • any capital gains or dividends
  • income from any rental properties
  • any employment income
  • income from other sources such as workers’ compensation payments, alimony, etc.

Income criteria for eligibility for GIS (from govt site):

  • If single, income for previous year must be less than $15,672
  • If couple with one not receiving OAS, income from previous year must be less than $37,584
  • If couple with both receiving OAS, income from previous year must be less than $20,688

What is the GIS Clawback?

Once the senior starts bringing in income, Guaranteed Income Supplement is clawed back at $0.50 for every $1 of income. It will continue to be clawed back until the maximum income threshold is met as indicated above.

So in the case of my reader question, once his RRSP is converted to an RRIF he will be forced into a regular (and increasing) withdrawal schedule which will be counted as income against his GIS benefits. When the reader turns 71, 7.38% of his RRIF will be withdrawn as income. If he has a $50,000 RRSP, $3,690 will be added as income which will reduce his annual GIS benefits by $1,845 (in addition to regular income tax).

With regards to reducing the GIS clawback, if the reader has a younger spouse, he can base the RRIF withdrawal rate based on the age of younger spouse. That way, he can remain at the lowest withdrawal rate for a bit longer, thus delaying taxation.

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Normal is Broke

Living With A Chain

How to Get a Job when No One is Hiring

When the jobs are hidden

To get a job, you have to find the openings that no one's advertising, and really impress your potential employer.

By Jia Lynn Yang, writer-reporter

NEW YORK (Fortune) -- David Perry, a longtime headhunter, says you're wasting your time if you're looking for job postings online. And he should know: he's often the guy on the other side helping companies lure new talent. Perry, who's based in Ottawa, says that in the last 22 years he has accomplished 996 searches totaling $172 million in salary. And the bottom line in today's economy, he says, is you have to tap the "hidden job market."

Perry's also the co-author of "Guerrilla Marketing for Job Hunters" and he recently spoke with Fortune.

What's the "hidden job market"?

When companies say, 'We have a hiring freeze,' that doesn't mean they're not hiring. It just means they're not adding headcount. Every year there's 20-25% turn over. So in a 1,000-person company, 200 or 250 people are going to turn over, either through attrition, or someone moves. Those companies are still hiring but they don't want to tell you.

So how do you find these jobs?

What you have to do in a recession is map your skills to employers to where you know they have a problem you can solve. My advice to job hunters is pick 10 to 20 companies, no more, and pick companies you're interested in, and that you think you can add value to. That requires researching companies, and so that list may take you two weeks. If you're trying to crack the hidden job market and you know the job position you want reports to vice president, find that vice president on LinkedIn and look at his profile to see who else he's connected to and go ask them, 'What's this guy like to work for?' Do the research before you even pick up the phone.

How can you get someone's attention?

We can go into billboards, sandwiches - that stuff only works once. It's only for one person who figures it out once, once in a city. If you're looking for fun stuff, we have this thing called the coffee cup caper, 30% of the time it will result in an interview. You send an employer a coffee cup with a little $5 swipe card with a little note that says, I'd like to get together and talk with you over coffee. I'll be calling soon. And you send it by U.S. post two day delivery, and that gets registered. So when they've signed for it, you wait about 20 minutes and then you call them. And then you go, Hi, I know you just got my package.' You're proving you're imaginative and creative.

What something people should avoid during a job interview?

This drives me insane: I've seen people mentally deciding in the interview whether they want the job. That's the last place to decide. You go into an interview, and you sell like your life depends on it. You've got to get the job first. I've seen it thousands of times. There's this point in the interview, where people go 'Hmm, do I really want this? You can see their body change. The employer picks it up and it's gone. If the employer is telling you, 'I love you,' and you're not saying 'I love you too,' it's over with.

How about following up afterwards?

If you really like the opportunity, don't go home and write thank you very much. Go back and write a letter that says, upon further reflection of what we were talking about, here's what I bring to the table, here's how I see myself fitting into the organization, including a 30-60-90 day plan.

How can someone attract a recruiter's attention?

You have to go to ZoomInfo and LinkedIn and create a profile. All corporate recruiters and probably 20% of the headhunters in America have ZoomInfo accounts. When we start a search, companies aren't going to advertise. The headhunter goes to ZoomInfo, types in requirements that we need, like skillset, degree, city, functional title, and up will come anywhere from a hundred to several thousand people who fit that criteria. Then we go to LinkedIn and run the same search. If you're in ZoomInfo with a picture, we're going to call you first. Just reverse engineer what recruiters are doing so you get found.

How can you really impress a potential employer?

It hasn't worked in years just to bring in your resume, except only in the most junior positions. I concentrate on directors to CEOs, and the last interview for us regardless is always a Power Point presentation of what you've learned, pain points, and how you intend to fix that. Everyone talks about being a great leader and great communicator, so prove it. Don't go into an interview and treat it like it's just another business meeting. Your career is your biggest asset now - because it's certainly not your house. To top of page


August 2008 Dave Ramsey on Barack Obama

This was aired in August 2008. So was Dave right???