Working After 65 in Canada: How OAS, GIS, CPP, and Taxes May Be Affected

Working After 65 in Canada: What Seniors Should Know About OAS, GIS, CPP, and Taxes

Many seniors continue working after age 65. Some work part-time, some babysit, some help family or neighbours, and others run a small side activity. A common question is:

“If I work a little, will I lose my senior benefits?”

The answer depends on the type of benefit and the type of income. Old Age Security, Guaranteed Income Supplement, CPP, and tax credits are not all treated the same way.

1. OAS and GIS Are Not the Same

Many seniors receive Old Age Security, also called OAS. Some low-income seniors may also receive the Guaranteed Income Supplement, often called GIS. These two benefits are connected, but they are not the same.

• OAS is a monthly pension for seniors age 65 and older who meet Canadian residency requirements.

• GIS is an extra monthly benefit for low-income seniors who receive OAS.

The important difference is this: OAS is not reduced simply because a senior works a little. GIS is much more sensitive to income.

For April to June 2026, the maximum monthly OAS amount is $743.05 for ages 65 to 74 and $817.36 for ages 75 and older, based on Government of Canada quarterly pension tables.

2. GIS Depends on Income

GIS is designed for lower-income seniors. Because of that, income matters.

For April to June 2026, a single, widowed, or divorced senior may receive up to $1,109.85 per month in GIS, depending on income.

For that same period, the income cut-off for a single, widowed, or divorced senior is less than $22,512, not including OAS and certain exempt employment or self-employment income. These numbers are not permanent. OAS and GIS amounts are reviewed regularly, so seniors should always check the current Government of Canada payment tables or review their Service Canada letters.

3. Seniors Can Work and Still Receive GIS in Many Cases

A senior does not automatically lose GIS just because they work. The important rule is the GIS earnings exemption. If a person receives GIS and has employment or self-employment income:

- the first $5,000 of employment or self-employment income may not reduce GIS

- for employment or self-employment income between $5,000 and $15,000, only 50% is counted for GIS reduction purposes

This rule is important, but it is often misunderstood. It does not mean all income is ignored.

CPP, pension income, RRIF income, investment income, rental income, and other taxable income may still affect GIS.

4. Example: Senior Doing Babysitting Work

Let’s say a senior receives:

- OAS

- GIS

- a small CPP amount

- $4,000 from babysitting during the year

If the senior is not an employee and does not receive a T4, the babysitting income may be considered self-employment income.

That income still needs to be reported on the tax return.

However, for GIS purposes, the first $5,000 of employment or self-employment income may be exempt under the GIS earnings exemption.

So the question is not simply: “Will she lose GIS?” The better question is:

“What type of income is it, how much was earned, and what other income does she have?”

That is why each situation should be reviewed carefully.

5. Cash Income Still Needs to Be Reported

Some seniors think small cash jobs do not need to be reported. That is not correct. Income may need to be reported even if it came from:

- babysitting

- cleaning

- tutoring

- sewing or repairs

- helping neighbours

- occasional work

- small self-employment activities

Reporting income properly matters because it can affect taxes, CPP rules, benefit calculations, and future CRA or Service Canada records.

6. CPP After Age 65: Do Seniors Still Contribute?

CPP has its own rules. If a person is receiving CPP retirement pension and continues to work, CPP contributions may still apply. A person who is at least 65 but under 70 may be able to elect to stop contributing to CPP. For employees, this is usually done using Form CPT30, Election to Stop Contributing to the Canada Pension Plan, or Revocation of a Prior Election.

At age 70, CPP contributions stop. This is one area where seniors should be careful. If the senior is self-employed, employed, or both, the process may be different.

7. Does Working Affect Benefits Right Away?

Not always. GIS is generally based on income from the previous tax year.

For example, income earned in 2025 may affect GIS payments for the July 2026 to June 2027 payment period.

That means a senior may work this year but not see the GIS change immediately. The adjustment may happen after the tax return is filed and processed. This is why filing taxes on time is very important for seniors.

8. What About OAS Clawback?

OAS clawback is different from GIS reduction.

Higher-income seniors may have to repay part or all of OAS through the OAS recovery tax. This usually affects seniors with much higher income, not low-income seniors who are mainly concerned about GIS.

For 2026, the Government of Canada quarterly pension table states the OAS repayment range starts at net world income of $95,323. The upper threshold is:

- $154,753 for ages 65 to 74

- $160,696 for ages 75 and older

Net world income includes OAS. For most low-income seniors receiving GIS, the bigger issue is usually not OAS clawback. The bigger issue is how additional income may affect GIS.

9. Filing Taxes on Time Matters Even If No Tax Is Owed

Some seniors do not file because they believe they do not owe tax. That can create problems. Filing taxes can affect access to:

- GIS

- GST/HST credit

- Ontario Trillium Benefit

- other provincial or territorial credits

- future benefit calculations

A senior may owe little or no income tax, but filing late can delay benefit payments.

10. What Seniors Should Bring to Their Tax Preparer

To review senior benefits properly, it helps to bring:

- T4A(OAS) slip

- T4A(P) CPP slip

- T4RIF or T4RSP slips, if applicable

- T5 or T3 investment slips

- rent or property tax information

- medical receipts

- records of employment or self-employment income

- receipts for expenses related to self-employment income

- Notice of Assessment from the previous year

- Service Canada letters about OAS or GIS

The more complete the information, the easier it is to avoid mistakes.

11. Common Mistakes Seniors Should Avoid

Mistake 1: Thinking OAS and GIS are the same

OAS and GIS are different. OAS is a pension. GIS is an income-tested supplement.

Mistake 2: Assuming the $5,000 GIS exemption applies to all income

It does not. The $5,000 exemption applies to employment and self-employment income. Other income may still reduce GIS.

Mistake 3: Not reporting small cash income

Cash income still needs to be reported.

Mistake 4: Forgetting about CPP rules after age 65

Seniors between 65 and 70 may still contribute to CPP unless they properly elect to stop, where eligible.

Mistake 5: Filing late

Late filing can delay income-tested benefits.

Final Thoughts

Working after 65 does not automatically mean a senior will lose their benefits. A senior can receive OAS and still work. A senior may also continue receiving GIS, depending on the amount and type of income. The key is to understand that not all income is treated the same way.

Employment and self-employment income have special GIS exemption rules, but other income can still affect benefits. CPP also has its own rules after age 65.

For seniors, the safest approach is: Report all income, file on time, and review how each income source may affect benefits before making assumptions.