You need to live in Canada at least 40 years after age 18 to get the maximum benefit. Plus: a question about federal assistance for renters.
Last week’s column about enhancements to Old Age Security (OAS) generated further questions on the topic from readers. Here’s what they wanted to know.
Q: I am a Canadian retired in Ecuador. The government recently announced an increase for all Canadians who are receiving OAS payments. Will they apply to Canadians retired outside Canada or only to those living in the country?
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A: In general, OAS recipients who move to other countries are entitled to the same amount they would receive if they still lived here. Depending on where they relocated, they might even have the option of having the payment automatically converted into local currency.
But you need to live in Canada at least 40 years after age 18 to get the maximum OAS benefit at age 65. If you moved after living here fewer than 20 years, the rules are different.
“OAS pensioners who leave Canada and do not meet the 20-year requirement are entitled to their OAS pension payments for the month of departure and the following six months, but the payment is not continued beyond that point,” Employment and Social Development Canada says.
OAS payments can resume, however, if the individual returns to reside in Canada.
The Guaranteed Income Supplement (GIS), an extra boost for low-income seniors, is cut off for good six months after a recipient takes up residence outside Canada.
“The six-month grace period ensures that GIS and allowances continue to be paid to low-income pensioners who only leave Canada on a temporary basis,” the agency said. They, too, can be reinstated if the individual returns.
Q: A friend of mine will be 75 in September. She wonders if she will get the 10 per cent OAS increase in October or only in July 2023. And will all people 75 and older receive the same amount?”
A: The 10 per cent increase in OAS for Canadians 75 and older takes effect this month but is ongoing. It’s applicable the month after someone turns 75 — in your friend’s case, October.
All recipients get the same percentage increase, but not necessarily the same amount. Those who haven’t lived in Canada at least 40 years after age 18 get a lower benefit than someone who has. A senior who waited beyond age 65 to start collecting OAS gets more than someone who took it as early as possible. Seniors in higher tax brackets may have some or all of their OAS entitlement clawed back.
Q: Finance Minister Chrystia Freeland was recently quoted as saying the (federal) government would be providing some sort of special assistance to renters. How do you qualify for that?
A: We don’t know yet. The government has stated it will pay a one-time “housing affordability payment” of $500 for almost 1 million low-income Canadians who are renters in 2022, but so far has provided no further details or a timeline for the payment.
It will be interesting to see how the government establishes that potential recipients actually are renters in 2022, or ends up simply sending a cheque to anyone whose income falls below a certain threshold.
Q: You wrote recently that children or spouses living in a home owned by their spouse or parent could mean an exemption for that property from capital-gains tax, even if the home is not the owner’s principal residence.
What about a parent of the owner living in an upper duplex, with the owner in the lower? When the upper is sold, does the relationship allow for the exemption on capital gains?
A: A duplex is, by definition, two residences. If the building has one owner, he or she cannot occupy both units at once, so only one could be eligible for the principal-residence exemption from capital-gains tax when the building is sold. If the parent owned the upper duplex, both units would be eligible for the exemption.
The Montreal Gazette invites reader questions on tax, investment and personal-finance matters. If you have a query you’d like addressed, please send it by email to Paul Delean at gazpersonalfinance@hotmail.com
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