Will Having a TFSA Reduce the Size of the Guaranteed Income Supplement?

With very minor exceptions, the definition of “income” used to determine the amount of the Guaranteed Income Supplement is the same as “Net Income” under the Income Tax Act. 

The most notable exceptions are the elimination of the OAS, GIS, CPP death benefits, up to $3500 of employment income, deduction of CPP contributions and EI premiums, and social assistance. In terms of the TFSA, since any income earned within the TFSA is not included in income for the purposes of the Income Tax Act, it will not affect the calculation of the GIS either. Neither will the transfer of funds from another family member by way of a loan or a gift (unless the loan is in fact a shareholder loan or an employee loan).