this post was submitted on 06 Apr 2024
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‘Why am I getting so little pension?’ Quebec woman turns to food bank, can’t make ends meet (globalnews.ca)
submitted 10 months ago by [email protected] to c/[email protected]
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[–] [email protected] 10 points 10 months ago (2 children)

Pagliuca explained she’s using her RRSPs to cover the rest of her rent, but said a good portion of that is getting taxed.

That is how the RRSP is designed to work. She got all those taxes refunded for decades so now she can pay a lower taxable amount than she would have earlier.

And if she’s using it for $500 a month, the taxes on that are going to be very low, not a “good portion”.

[–] [email protected] 10 points 10 months ago (1 children)

The article is written in a very misleading way. 10-20% could be seen as a "good" portion, but it will be returned in the next year since 6K a year will be in the lowest tax bracket.

[–] [email protected] 6 points 10 months ago

Most banks default to 10% tax deducted at source. Clients can tell the bank to take more or less, but you're right, she should be getting back almost of it (if not all of it) when she files.

[–] [email protected] 2 points 10 months ago (2 children)

if she’s using it for $500 a month, the taxes on that are going to be very low, not a “good portion”.

It raises her income, so she gets less OAS. You're right, but if she's poor, then she's gonna have a bad time.

[–] [email protected] 7 points 10 months ago* (last edited 10 months ago) (1 children)

OAS recovery doesn't start until $90,997 of annual income in 2024, so that's not a factor.

EDIT: It could reduce her GIS. The threshold for GIS recovery is $21,624, but from what she said, she also shouldn't have that much income, even with the RRSPs.

[–] [email protected] 3 points 10 months ago (1 children)

Yeah, sorry. I get OAS and GIS mixed up.

[–] [email protected] 3 points 10 months ago

Understandable. GIS is automatically applied to an OAS applicant if they qualify, so a lot of people just think of them as the same program.

[–] SchmidtGenetics 4 points 10 months ago

What’s the thresholds?

The bar is pretty high.