TORONTO -- Not all seniors are cheering when it comes to government aid.
On the one hand the government is helping high-risk Canadians get through a tough financial situation. Government benefits are seen by many as the financial lifeline they needed as jobs were lost, income reduced and financial futures were put on shaky ground due to the pandemic.
On the other hand the government will be taking back some of the financial lifeline it provided. The government benefits such as the CERB will be taxed and is considered to be income. Some aren't thinking about this today but it will become a issue when 2020 taxes are filed.
Others such as seniors who currently qualify for the Guaranteed Income Supplement are worried government aid might actually compromise their lifestyle. This fear of struggling financially isn't new to seniors who are vulnerable and barely making ends meet. Especially those who collect the Guaranteed Income Supplement and maybe generate a little bit of income from a side hustle yet still manage to come in below threshold limits.
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In 2020 seniors are eligible to receive GIS if they are: A single senior with a total annual income of less than $18,600. A couple both receiving Old Age Security and with a combined annual income of less than $24,576.
Fear is mounting among low-income seniors who are receiving government aid and who may also be living in subsidized housing that is income-tested. The government aid they receive via CERB may push them out of the eligibility requirements for relief on rent. If this happens they will be hit twice - potentially higher rent and taxation on the benefit. Add to this the concern the GIS could be clawed, which has some wondering if the government benefit will do more harm than good to their financial situation.
Now to be fair, not all government aid will be taxed. It doesn't apply to the one-time special payment seniors will be receiving this week. To add some context, there are currently 6.7 million seniors who are eligible for the OAS pension and 2.2 million who are eligible for the GIS.
Where it gets sticky is if you are a senior, low income and collecting the GIS, some will still qualify for the government program even if they have a side hustle that brings them in a little extra money. If they are no longer making that little bit of extra money due to COVID-19 they now qualify for the CERB. The problem is that it isn't tax-free money and given the amount it could be more than they were making and push their income higher. This may result in them earning too much to qualify for low-income housing.
As the government views financial aid and those most vulnerable, there is a reasonable expectation and case to be made for exemptions for some low-income seniors collecting GIS and who qualified for CERB So the question is: do they or don't take advantage of the government benefit?
