The guaranteed income supplement (GIS) is a vital lifeline for low-income Canadian seniors. Providing up to $1,097.50 per month (more for couples), the amount can go a long way in helping you make ends meet in retirement. However, there are some strict eligibility criteria for the GIS. In order to receive it, your income needs to be below a certain threshold, which is generally quite low. In this article, I explore the income limit that determines your GIS eligibility.
$22,272 for single, divorced, or widowed people
The 2025 GIS income limit for single, divorced, or widowed Canadians is $22,272. Below that amount, you can receive the full GIS benefit. Forms of income that put you above the threshold include employment income, pension income, and –crucially – investment income if the investments are held in taxable accounts. As I will show in a moment, holding investments in non-taxable accounts is a great way to ensure your investments don’t impact your GIS eligibility.
It’s slightly different for couples
For couples, the income threshold for GIS eligibility is slightly higher. Sources online indicate that a couple can earn as much as $53,000 combined and still get the full GIS benefit. Whether or not you or your spouse earns OAS is also a factor in your GIS eligibility.
Reducing your investment income using a TFSA
Since taxable investment income reduces your GIS eligibility, it makes sense to hold your investments in non-taxable accounts. For Canadian retirees, the most flexible and straightforward such account is the tax-free savings account (TFSA). The TFSA is an account that lets you grow and compound your investments tax-free. It also lets you withdraw your investment proceeds tax-free, making it more flexible than a registered retirement savings plan (RRSP).
Let’s imagine that you held $100,000 worth of Fortis (TSX:FTS) stock in a taxable account. Fortis is a Canadian utility stock with a relatively high dividend yield and a long-term track record of dividend growth, which makes it a good candidate for inclusion in a long-term TFSA portfolio.
A $100,000 position in Fortis stock pays about $3,630 per year in dividends on a $100,000 position. Here’s how the math on that works:
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT | FREQUENCY |
| Fortis | $67.19 | 1,488 | $0.61 per quarter ($2.44 per year) | $907.68 per quarter ($3,630.72 per year) | Quarterly |
Now, if you hold Fortis in a taxable account, you’d pay substantial taxes on those dividends. The $3,630.72 would be “grossed up” by 38%, making the taxable amount around $5,010. Then, two dividend tax credits would be removed from the resulting taxes, resulting in a final tax bill. Not only is that a tax in itself but, because it’s in a taxable account, it’s taxable income that impacts your GIS eligibility. If you hold Fortis in a TFSA, on the other hand, you pay no taxes and report no additional taxable income – a double whammy of savings for a prospective GIS recipient.
So, if you’re going to invest, invest in a TFSA. The savings can go a long way.
