The GIS income test and exemptions

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GIS uses your annual income other than OAS. Your OAS pension is never counted, and GIS itself is never counted. Almost everything else is — but with one important exemption for work, and one important exclusion for TFSA withdrawals. The test uses the previous calendar year's income from your tax return for the July-to-June benefit year, unless you have asked Service Canada to use an estimate of your current-year income because your income has dropped (see the changes page).

What counts

CPP or QPP pension — counted in full, dollar for dollar.
Workplace pensions and annuities — counted in full.
RRSP and RRIF withdrawals — counted at their full withdrawn amount in the year you take them out.
Investment income — interest, dividends and capital gains, counted.
Rental income — counted.
Employment and self-employment income above the exemption — counted after the exemption below.

What does not count

The OAS pension itself — never counted.
GIS itself — never counted.
TFSA withdrawals — do not count at all. Money drawn from a TFSA is invisible to the GIS income test, which is why the account you withdraw from can matter more than the amount you withdraw.
The Allowance and Allowance for the Survivor — payments to your spouse under those programs do not count as your income.

The work exemption, worked out

The first $5,000 of employment or self-employment income in a year is fully exempt — it does not reduce GIS by a cent. Of the next $10,000 (earnings from $5,000 to $15,000), only 50% counts. So a senior earning $15,000 from part-time work has only $5,000 of it counted. Earnings above $15,000 count in full. Two worked examples:

Work income $8,000: first $5,000 exempt; of the remaining $3,000, half ($1,500) counts. Counted work income: $1,500.
Work income $10,000 plus CPP $6,000: work counted is $2,500 (first $5,000 exempt, half of the other $5,000), plus CPP $6,000 = $8,500 counted in total. For a single pensioner that is well below the $23,112 limit, so GIS continues at a substantial rate.

How fast does GIS fall as income rises?

Service Canada publishes GIS in income bands rather than one flat taper, and the published tables are the authoritative source for an exact figure at a given income — the OAS estimator on Canada.ca gives a personalised estimate. As a rough guide, a single pensioner loses about $1 of monthly GIS for every $2 of annual income above zero in much of the range, which is why a CPP pension of $6,000 a year does not wipe GIS out: it reduces it, it does not end it. Do not use a single percentage for planning; use the estimator or the tables, and remember that couples have their own tables and their own combined limits.

The RRSP trap. The most expensive GIS mistake is a large one-off RRSP withdrawal. Every dollar withdrawn counts as income for the following benefit year, so a $20,000 withdrawal to pay for a roof can cut the next year's GIS sharply, while the same $20,000 drawn from a TFSA would not touch GIS at all. If a big withdrawal is unavoidable, ask Service Canada beforehand what it will do to your GIS, and whether an estimate of current-year income would help in the year after.

General information only. This page explains the Guaranteed Income Supplement in plain English. It is not legal, financial, or tax advice, and it cannot decide whether you qualify. Only Service Canada can decide a claim. Rates and rules change over time — the figures here are for October to December 2026 unless another period is stated — so always confirm the current position with Service Canada or Canada.ca before you act on it. Contact: hello [at] tapetoolhq.com.