Canada Revenue Agency
www.cra.gc.ca
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Impact on your government benefits and credits
Your federal income-tested benefits and credits such as: Old Age Security (OAS) benefits, Guaranteed Income Supplement (GIS), or Employment Insurance (EI) benefits will not be reduced as a result of the income you earn in your TFSA or the amount you withdraw from your TFSA.
The income earned in the account or amounts withdrawn from a TFSA will also not affect your eligibility for federal credits, such as the Canada Child Tax Benefit (CCTB), the working income tax benefit (WITB), the goods and services tax/harmonized sales tax credit (GST/HST), or the age amount.
You can withdraw money from the TFSA at any time, for any reason, with no tax consequences, and without affecting your eligibility for federal income-tested benefits and credits.
Denis is retired. In addition to his pension, he receives Old Age Security (OAS) and Canada Pension Plan (CPP) benefits. He earns $500 a year in interest income from his TFSA savings. Neither this income nor any TFSA withdrawals will affect any federal income-tested benefits or credits he receives. If he had earned $500 in a regular savings account, it would have to be included on his tax return and Denis would have to pay more tax and might have to repay some of his social benefits.
| Denis' income | Funds in a TFSA | Funds outside a TFSA |
| Total pension income | $48,250 | $48,250 |
| Total CPP benefits | $12,017 | $12,017 |
| Total OAS benefits | $ 5,933 | $ 5,933 |
| Interest income to be reported on the tax return |
$0 | $500 |
| Total income | $66,200 | $66,700 |
| Fictitious base amount for social benefits repayments |
$66,250 | $66,250 |
| Amount over base amount | $0 | $450 |
| Multiplied by 15% | X 15% | X 15% |
| Amount to be included on the tax return as a social benefit repayment | $0 | $67.50 |
