Only Child warns pensioners to be wary of government pension setup

Only child contemplated government red tape with pensions

Only child contemplates government red tape with pensions

When my late dad turned 65, the Canada Pension Plan was just coming into existence. The CPP was legislated in 1965 and came into effect in 1966 . So, of course Dad never paid into the CPP when he worked for the CNR as it was then called. Of course CNR paid a pension. My mother died before she reached 65.  Dad died at 66.

Fast forward many years and my generation – the so-called baby boomers-  are dealing with the current federal government pension plans and Guaranteed Income Supplement. And if you think once we sign up and get approved it is all smooth-sailing and we will get our regular monthly increments, sometimes with additions, think again.

There are many Federal Rules and Regulations that can screw up those receiving pensions. I know this from first-hand experience.

Because I can’t afford to retire (I didn’t say the pensions etc. were enough to live on), I still am self-employed. I am grateful that I am doing something I love (writing, editing, teaching writing) and would probably chose to do so until age 70. Then I would just write – to me, writing is for a lifetime. However, how many pensioners who have to work to make ends meet are working at something they love?

To make a long story short, if you are still self-employed and getting CPP you can elect to still contribute until you are 70.

Watch it here folks. If your self-employment income (after business deductions) is below a certain amount, you don’t have to pay into the CPP for that tax year. So, I followed this rule, didn’t have to pay,  and the powers that be at CPP punished me for that.

The b******* clawed back my CPP.  The monthly decrease is a mere $1.47 so I’m not quibbling about that. But they arbitrarily decided to deduct all the difference in the same month’s payment instead of spreading it over 12 months. And they pick a month barely three months from when they send you the notice letter so that if you do dispute it (which I did) your three months timeline for disputing runs into that month of cut-off. Yes, I disputed, after contacting my MP, and did the dispute for lots of time for the CPP rulers to do as the letter said can be done – have a different set of CPP rulers go over my situation.

Well, I got notice that I’m not getting it reversed. This notice came after the full clawback deduction in May’s payment. Their excuse? Legislation says they can’t repay once they do the clawback, once it is taken off. What do you want to bet they didn’t even bother to re-check it?

Sure, there is more procedure if I disagree. I am planning to take all that to my MP and hope his office will help me with that.

But in the meantime I’ve run into more government red tape – with the Guaranteed Income
Supplement (GIS). I did apply for it originally (as per government instructions) when I applied for the OAS.  Last year I got notice from the government (read Service Canada – they do all the government dirty work with us citizens) that I would be receiving the GIS monthly – how much extra, that it would be added on to my OAS for one payment, plus the first month of all that I would get a lump sum for past months.

Great. I thought.

My suspicious radar should have been on alert. June 30, this year, I received another application form for 2016 and 2017 GIS. I thought once you applied that was it. I did know they could claw back if your taxable  income went up too much. Well, for 2015 my taxable income went down, enough to put me below the poverty level for a single person (according to the Ontario Government). I thought they got the information about a person’s income from the CRA (they do; I checked with Service Canada). I always file my income taxes and on time. And this year for a change I don’t seem to have made any math errors. (And yes, I signed out of paying anymore into the CPP.) So, why are they sending me this application form, which arrived June 30, when the note with it says that if I don’t fill in this form and get it in by June 30, my GIS could be stopped until they receive it and then I would get reimbursed and the payments would continue?

What? Okay, if  I have to reapply, fine. Just get the damn form to me on time to do so.

I phoned Service Canada June 30 afternoon right after receiving this nonsense in the mail. The fellow I talked to checked into my account and said there was money there in my account to be paid in July. But he suggested that I fill out the form and deliver it to Service Canada on Monday just to be on the safe side.

Which I did. I had questions for the Service Canada employee at one of the desks. After waiting 30 minutes to do so, this fellow was not very helpful and wasn’t very polite either. He did give me one piece of information for filling in my form but he wouldn’t check into my account to see if the money there is OAS only or includes the GIS. His excuse “We don’t have the means to do this like where you phone Service Canada.”

Oh, please. Now I have to waste another 20 minutes to half an hour on hold at Service Canada and also worry if I filled in the form correctly because I just sat down at one of the tables and finished filling in the form and then handed it in at the front. I did find it is sent by courier, not Canada Post, so if there is a Canada Post strike it won’t be stuck in regular mail.

And if you think this is just me whining, think again. Some of my friends have told me similar stories of what has happened to them.

If any of you reading this have any bad dealings with your government pensions, I would like to hear.

Meantime, I’m going to set up an appointment later this month with my MP.

But first, I have some client work to finish. That got slowed down because of all this government red tape.

Cheers.

Sharon

Only Child Writes

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Filed under finances, Income Taxes, Old Age pensions, Only child

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