NOTE: All of the programs discussed in this video and blog are still available as of June 2021, but with slightly changed numbers for 2021. Please download the below updated booklet for up-to-date numbers.
Welcome back to another episode of Chat with Brandy, a weekly show where we talk personal & business finance, taxes, and how to make money while doing what you love! I’m your host, bookkeeper and tax preparer Brandy Miron, and this is episode 25!
This episode is all about the financial assistance programs and benefits available to Alberta Seniors (age 65+). This is a great episode for not only people over 65 and their caregivers, but people approaching retirement age. Please note – the information relayed in this episode is accurate at the time of recording (November 5, 2019), but note that programs may change or be cancelled in the future, and especially when I am giving specific amounts of either income thresholds or benefit amounts, these change every year, so information will be out of date as time goes on but the basic information should still be useful.
I’ve broken down the program information into segments below:
Canada Pension Plan (CPP)
The Canada Pension Plan (CPP) is the Canadian social security citizen, providing older or disabled citizens a basic level of lifetime income after age 65. CPP requires mandatory pay-as-you-go contributions by all workers, including self-employed individuals. CPP is not government funded, but rather by taxpayers and their employers.
Eligibility
Most Canadian retirees will qualify for some level of CPP, but the amount varies based on how much you contributed in your working life.
To find out how much CPP you qualify for, call Service Canada at 1-800-277-9914 and ask for a CPP Statement of Contributions – they will provide you access to your online statement.
The maximum payout for CPP in 2019 is $1,154.58, but do not count on the maximum – the average CPP payout is $640/month. To get the maximum, you must contribute to CPP for at least 83% of the time (minus the Child Rearing Drop Out Provision) that you were eligible to contribute (ages 18-65), and you must have contributed “enough” to qualify for the maximum for that 83% of the time. Essentially, you must have contributed the maximum for 39 years of your working life.
CPP is considered taxable income and cannot be clawed back based on how high your income is.
Early or Deferred Retirement Pension
CPP rules allow seniors to take CPP as early as age 60 at a reduced rate of 0.5% for each month prior to their 65th birthday.
If you were to take the CPP starting on your 60th birthday, your total CPP payout would be reduced by 30% (0.5% x 60 months).
Likewise, you are able to defer the CPP payment to age 70, and take an increased rate of 0.5% for each month after your 65th birthday. Since CPP is a taxable income, it may be wise to defer if you are still working after age 65.
From a life-long standpoint, if you live past age 77, you’ll take more from CPP if you wait until 65. If you do not live past 77, you will make more by taking the benefit early.
If you will have an additional pension through work or a substantial amount of RRSP’s or RIF’s that will start at age 65, it may be wise to take the reduced rate in order to keep you in a lower tax bracket.
Application
Start applying for CPP at least 6 months before you want it to start (i.e. 65th birthday). Visit here or call 1-800-277-9914.
Old Age Security (OAS)
The Old Age Security (OAS) program is the Government of Canada's largest pension program. It is funded out of the general tax revenues of the Government of Canada. This means that you do not pay into it directly.
The OAS pension is a monthly payment available to seniors aged 65 and older who meet the Canadian legal status and residence requirements.
Eligibility
Your employment history is not a factor in determining eligibility: you can receive the Old Age Security (OAS) pension even if you have never worked or are still working.
If you are living in Canada, you must:
be 65 years old or older
be a Canadian citizen or a legal resident at the time we approve your OAS pension application; and
have resided in Canada for at least 10 years since the age of 18
If you are living outside Canada, you must:
be 65 years old or older;
have been a Canadian citizen or a legal resident of Canada on the day before you left Canada; and
have resided in Canada for at least 20 years since the age of 18.
Generally, if you have lived in Canada for at least 40 years after age 18, you will receive the maximum benefit of $601.45/month. OAS is considered taxable income and will be clawed back based on your annual income, starting at $77,510. Once your income level reaches $125,696, the OAS will be completely clawed back.
Deferred OAS Benefit
OAS rules do not allow an early benefit, but do allow seniors to defer the benefit up to age 70. For each month of “qualified” deferral past your 65th birthday will result in a 0.6% benefit increase (up to a maximum of 36%).
If you will have an additional pension through work or a substantial amount of RRSP’s or RIF’s that will start at age 65, it may be wise to defer the OAS in order to avoid clawback and keep you in a lower tax bracket.
Application
Start applying for CPP at least 6 months before you want it to start (i.e. 65th birthday). Visit
here or call 1-800-277-9914.
Tax Credits & Splitting Income
There are key tax credits which you should qualify for automatically on a tax return (if eligible).
Who is eligible
Age Amount - You must be 65 years or older at the end of the year to qualify for this $7,333 tax credit. Once your income passes more than $37,000, the age amount begins to drop until $86,000 when it disappears completely.
Pension Amount - If you reported eligible pension, superannuation or annuity payments on your tax return, you may be able to claim a tax credit. You can claim up to $2,000 for the pension income amount.
Disability Tax Credit – You must have a physical or mental impairment for a continuous period of at least 12 months to qualify for the disability amount. See further down for more information.
Sharing tax credits with your spouse
If your spouse or common-law partner qualifies for certain tax credits, but doesn’t need the whole amount to reduce the tax they owe to zero, you may be able to claim all or part of their unused credits for the:
• age amount
• disability amount
• pension income amount
• tuition, education and textbook amount
Splitting pension income with your spouse
If your spouse or common-law partner receives a pension or superannuation (Note: CPP and OAS do not qualify), you may be eligible to split some of their pension income and therefore pay a lower rate of tax. There is no age requirement, but you both must be residents of Canada.
Other common tax deductions
Retired seniors may not qualify for many family or employment-related deductions, but they still may benefit from deductions such as:
• medical expenses (prescriptions, insurance premiums, optical, dental, chiropractor, orthotics, etc.)
• carrying charges (investment fees)
• charitable donations
• home accessibility expenses (must qualify for DTC – see below)
Disability Tax Credit
A person with a severe and prolonged impairment in physical or mental functions may be eligible for the disability tax credit (DTC) of $8,235. Once they are eligible for the DTC, the disability amount could be claimed on the tax return, and can be adjusted up to 10 years back.
Who is eligible
For you to be eligible for the DTC, a medical practitioner must certify that you have a severe and prolonged impairment in physical or mental functions. The medical practitioner also needs to describe the effects of the person’s impairment.
Eligibility for the DTC is based on the effects of the impairment, not on the medical condition itself. You can fill out this self-assessment questionnaire to find out if you may be eligible.
Applying for the credit
Get an application form here and have a qualified practitioner complete and sign the form, such as a doctor, optometrist or psychologist, depending on the disability. Once the form is complete, send a copy into your tax centre and wait for approval.
Other benefits related to DTC
If approved for DTC, you may also qualify for several other tax credits:
Home Accessibility Expenses: DTC-eligible individuals who are over 65 who own their home may claim a deduction of up to $10,000 on a qualifying renovation to allow the individual to gain access to, or to be mobile or functional within, the dwelling
Disability Supports Deduction: DTC-eligible individuals who pay for certain medical expenses in order to work, go to school, or do research for which they received a grant may be eligible for a deduction (i.e. braille devices, note-taking services, reading services, captioning, voice over text software)
Additional Medical Expenses: DTC-eligible individuals may claim certain medical expenses that others may not (i.e. attendant care expenses, nursing homes, specialized care)
Seniors Property Tax Deferral Program
The Seniors Property Tax Deferral Program allows eligible senior homeowners to defer all or part of their property taxes through a low-interest home equity loan . If you qualify, the Government of Alberta will pay your residential property taxes directly to your municipality on your behalf . You re-pay the loan, with interest, when you sell the home, or sooner if you wish . Monthly repayments are not required .
Who is eligible
To qualify for the Seniors Property Tax Deferral Program, you must meet all of the following criteria:
• be age 65 years or older
• be an Alberta resident for at least three months
• own a residential property in Alberta
• have a minimum of 25 per cent equity in your home
Only residential properties are eligible. The home must be your primary residence (that is, the place where you live most of the time). If you owe arrears from previous years’ property taxes, you can still apply to the Seniors Property Tax Deferral program, as long as you have a minimum of 25 per cent equity in your home .
Interest charge
The Seniors Property Tax Deferral Program charges simple interest (not compounded) . Interest charges start the day the program pays your residential property taxes to the municipality on your behalf and ends when the loan is paid in full . The interest rate is variable and is reviewed twice a year in April and October and may be adjusted accordingly .
Applying to the program
Complete and submit a Seniors Property Tax Deferral application form in order to apply to the program . For an application form or for information on the current interest rate, visit here or call the Alberta Supports Contact Centre toll-free at 1-877-644-9992 .
Alberta Seniors Benefit program
The Alberta Seniors Benefit program is a monthly benefit paid to seniors with an annual income of
$28,150 or less, or a senior couple with a combined annual income of $45,720 or less . These income levels are guidelines only, and are for seniors whose income includes full Old Age Security pension.
The benefit is determined by:
• the type of accommodation you live in
• your marital/cohabitation status
• your income (combined with your spouse/partner’s income if applicable)
• receiving the federal Old Age Security pension (i .e ., having lived in Canada for 10 years)
Maximum benefit available
Accommodation and Marital/Cohabitation Status Maximum Annual Benefit (if eligible for Old Age Security)
Supplementary Accommodation Benefit
The Supplementary Accommodation Benefit supports eligible seniors who reside in a designated
supportive living or long-term care facility with monthly accommodation charges . The amount received is determined by:
• your personal income from all sources (line 150 of the previous year’s income tax return) combined with your spouse/partner’s income (regardless of age)
• the maximum monthly accommodation charge in designated supportive living and long-term care as set by Alberta Health
• the monthly disposable income amount of at least $322 (this amount may be used for personal
expenses such as personal hygiene, telephone, cable, etc .)
When a couple is required to live apart for health reasons, a review of eligibility is completed to consider the couple as two single seniors living in separate dwellings . This is done by dividing the couple’s total combined income equally (50:50 split) and calculating benefits using the single senior income threshold. Seniors whose monthly income from all sources is less than the current private room rate may receive a benefit.
Special Needs Assistance for Seniors program
The Special Needs Assistance for Seniors program provides a lump-sum payment to eligible seniors with low income towards the cost of appliances and specific health and personal supports . The maximum assistance available is $5,105 in a benefit year (July 1 to June 30) . Each January the maximum benefit and benefit rates considered by the Special Needs Assistance for Seniors are adjusted according to the Alberta Consumer Price Index .
Who is eligible
A single senior’s or senior couple’s total annual income and the expense or item requested are used to determine the amount funded. Seniors must complete the Seniors Financial Assistance application form to enroll in the program. Once you are notified of your eligibility for Seniors Financial Assistance programs, you can submit an estimate or receipt to apply for assistance towards the cost of an item funded by the program.
Income eligibility
To be eligible for assistance, your total income (line 150) of your tax return needs to meet these levels:
What is covered
For a full list of eligible items and program requirements, visit here or call the Alberta Supports Contact Centre toll-free at 1-877-644-9992 to request a Special Needs Assistance for Seniors Information Booklet.
Guaranteed Income Supplement & The Allowance
The Guaranteed Income Supplement (GIS) provides a monthly non-taxable benefit to Old Age Security (OAS) pension recipients who have a low income (see below) and are living in Canada.
Who is eligible
To qualify for the GIS, you must meet all of the following criteria:
• receiving an Old Age Security pension
To qualify for the Allowance, you must meet all of the following criteria:
• aged between 60-64;
• your spouse or common-law partner receives on OAS pension and is eligible for GIS (or they are incarcerated or is deceased)
• Canadian citizen or legal resident;
• reside in Canada for at least 10 years
Income eligibility
To be eligible for GIS, your total income (line 150) of your tax return needs to meet these levels:
To be eligible for the Allowance, your total income (line 150) of your tax return needs to meet these levels:
Applying to the program
If you did not receive a letter from Service Canada informing you that you were selected for automatic enrolment, you must apply in writing for the GIS; however, you must first apply for OAS.
You can access the application online through Service Canada Form # ISP3025 or call the Service Canada toll-free at 1-800-277-9914 .
Senior Home Adaptation & Repairs Program (SHARP)
The Seniors Home Adaptation and Repair Program (SHARP) allows seniors to use their home equity to remain in their homes and maintain their independence. Eligible seniors can apply for a low-interest home equity loan with the Government of Alberta to cover repairs, adaptations, and/or renovations to their primary residence. For low-income seniors, non-repayable grants are available.
Home Equity Loan Program
Low-interest home equity loans can cover a range of home adaptations and renovations to help seniors stay in their homes longer.
You must provide a written cost-estimate or receipts for all project funds being applied for.
Seniors may apply for retroactive funding. Receipts must be provided for home repairs, adaptations or renovations completed and paid for within 12 months before the date that SHARP staff receives your application package.
The current interest rate is 3.95%. It is reviewed, and may be adjusted, every 6 months in April and October. Simple interest charges start on the date that the program issues a loan and end when the loan is repaid in full.
Eligibility
To be eligible for this program you must:
• have an annual combined income of $75,000 or less (and more than $45,720 or $28,150 for a single person – see grant info below)
• be 65 years of age or older (only one spouse/partner needs to be at least 65) and listed as a registered owner of a residential property in a Land Titles Office
• maintain a minimum of 25% equity in your home AFTER the loan amount is applied
• be a Canadian citizen, or have been lawfully admitted to Canada for permanent residence
• be an Alberta resident, having lived in the province for at least 3 months
Grant
Seniors Home Adaptation and Repair Program (SHARP) grants may be available to eligible senior homeowners with low income (single seniors with total annual income of $28,150 or less, or couples with a combined income of $45,720 or less) who do not qualify for a SHARP loan to help with certain home repairs.
The maximum assistance available is $5,000/year and $15,000/lifetime.
Application
For more information or to apply, visit here or call the Alberta Supports Contact Centre at 1-877-644-9992.
Residential Access Modification Program (RAMP)
Low income Albertans with mobility challenges can apply for grants to modify their home for:
up to $7,500 per person each year
up to $15,000 per person within 10 years
Eligibility
To be eligible for this program you must:
be a single person with a gross household income of $36,900 or less, or a couple with a gross income of $46,500 or less. These amounts can be increased if you have children under 21 living with you, or the family is applying for a child under 18 who uses a wheelchair
living with a progressive neuro-degenerative disease including: MS, muscular dystrophy, ALS, COPD,
Parkinson’s, Alzheimer’s, Spina Bifida, spinal cord injuries, or non-recovering stroke
an Albertan of any age using a wheelchair OR a 65+ senior who uses a 4-wheel walker on an ongoing
basis
homeowner, tenant, or living with family
be a Canadian citizen, or have been lawfully admitted to Canada for permanent residence
be an Alberta resident, having lived in the province for at least 3 months
You must be expected to live in the home for the next 10 consecutive years
The modifications must:
enable you to enter and move within your own living space
usually be permanent – RAMP will review requests for temporary modifications on a case-by-case basis
be made to properties in Alberta – including on- or off-reserve homes
Application
For more information or to apply, visit here or call the the RAMP Program at 1-877-427-5760.
In preparation for this episode, I spoke with a general contracting company here in Edmonton that has a lot of experience with both of these programs and knows how to walk you through the application process and answer additional questions. Feel free to contact Graham Churchill at Caruana Interiors if you have contractor-related queries, or you can call the government programs directly at the numbers provided above.
And that wraps up this week’s episode! I hope you found it helpful and informative, and we’ll see you next week!
