Impact on your government benefits and credits

Your federal income-tested benefits and credits such as: old age security (OAS) benefits, the 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The income earned in the account or amounts withdrawn from a TFSA will also not affect your eligibility for federal credits, such as the Canada child benefit (CCB), the working income tax benefit (WITB), the goods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.

You can use the MyBenefitsCRA mobile app to securely access your benefit information.

Example

Denis is retired. In addition to his pension, he receives 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 as they do not have to be included on his income tax and benefit return. If he had earned $500 in a regular savings account, it would have to be included on his income tax and benefit return and he would have to pay more tax and might have to repay some of his social benefits.

The following table demonstrates the impact of withdrawals from funds invested in a TFSA, compared with funds that are invested outside a TFSA.

A comparison of investing in a TFSA and outside a TFSA
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 income tax and benefit 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 as a social benefit repayment $0 $67.50
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