Living longer, and the need to cover the day-to-day basics and rising healthcare costs can lead to financial challenges for older adults. The is especially true when public pensions like Old Age Security (OAS ) Canada Pension Plan are their only sources of income over the age of 65.
Sadly, when care for an infirm spouse can no longer be well-handled at home and a long-term care home is required, couples may be forced to live separately. However, when one or both spouses need public pension money to cover long-term care home costs, individuals or their power of attorney may apply for what’s called “an involuntary separation” (not to be confused with military service involuntary separation).
How to apply
A written declaration using two forms, can be filed with Service Canada, under the Federal Government’s Old Age Security Act. This allows both spouses to be treated as single persons when they qualify for OAS. Ordinarily, family income is usually taken into account for the purposes of OAS and GIS. When recognized as not living under the same roof by the federal tax department, spouses or common law partners may be able to independently quality for higher OAS and GIS payment to help reduce their financial burden. Of note, to qualify, the physical separation cannot be voluntary and must be caused by circumstances such as illness that are beyond the control of either spouse. (they can share a room in LTC and still qualify)
The fine print
In general, according Revenue Canada, involuntary separation could occur for work, studies, being incarcerated or for health reasons and has no impact on pension income splitting, medical tax credit other tax credits for retirees. In some provinces there are additional benefits related to being involuntarily separated. Of note: Payments can only be retroactive for 11 months for file as soon as you know the situations.
Resources: Appui.org • Canada.ca • familycaregiversbc.ca
Image: CanStock
