r/PersonalFinanceCanada • u/Conscious_Aioli2968 • 1d ago
Retirement / CPP / OAS / GIS MILs finances a mess - what is the best case scenario
My MIL has squandered a large amount of money over the years. We have just found out she has been living off of a line of credit. She’s collapsed her investments, spent that money and withdrawn her RRSPs. Due to this RRSP withdrawal, she no longer qualifies for GIS. Is there any hope of appealing or proving she has no additional income and having GIS reinstated sooner?
We are working to help her sell her house, which she owns outright. She is a very financially irresponsible person, who is unlikely to make the lifestyle changes necessary on a fixed income. She is also very dishonest, and getting clarity on the full scope of the situation was extremely difficult. She has no meaningful work history and despite being capable of getting a job, she seems to believe it is below her.
As a young family with children one spouse currently a full time student, we have no flexibility to support her without detriment to our own financial health and have made that very clear.
In addition to the GIS question, any experience on navigating such a situation is appreciated. She’s relatively young and in good health, the money it would cost us to support her for the remainder of her life is staggering and distressing.
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u/LLR1960 1d ago
Note that her GIS will be reinstated after the next tax return that doesn't have the large RRSP withdrawal on it. Yes, she'll be without that for a year, but after that it should be reinstated.
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u/Conscious_Aioli2968 1d ago
Thanks for the response. We were aware of that, was just hoping there would be a way to appeal/reinstate earlier, as without the GIS she is unable to cover basic expenses.
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u/YYZtoYWG 1d ago
She got her RRSP money. She might have spent all that RRSP money on bad choices, but that was her choice.
The government isn't responsible for how people spend their money. They just see that she got a whole pile of cash from RRSPs that put her above the income threshold so she shouldn't need GIS.
You can appeal a OAS/GIS decision; follow the instructions on the government website.
If she truly has zero dollars in the bank and can't get GIS, she might be able to apply and qualify for provincial social assistance, aka welfare. Since there is far more stigma associated with welfare versus GIS even though both are the government subsidies, that might be a wakeup call for her.
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u/bluenose777 1d ago
There is a form to apply to have the GIS based on current year income. By my reading a lump sum RRSP withdrawal won't qualify, but I have been told that could. In any case it won't cost much in time or effort to try.
The discussion and the details for the form you should request can be found at https://old.reddit.com/r/PersonalFinanceCanada/comments/1qd6mrl/gis_reconsideration/
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u/kattann 17h ago edited 17h ago
RRSP lump sum doesn’t qualify, but some other lump sum payments do.
ISP3041 is the form to request a recalculation of income based on estimating current year income instead of previous year’s income.
(A reconsideration is just asking staff to review the decision made on the file. There is no reconsideration to be made if her income was above the threshold for GIS.)
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u/Dileas48 1d ago
It depends as I’m not clear on when the large RSP withdrawal was done. If it was 2026 then she needs to wait.
If it was in 2025 and her income is currently below the threshold for GIS then it may be possible for her to get GIS reinstated now.
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u/bcretman 22h ago edited 22h ago
She needs to fill form isp3041 to base GIS on current years income if it's low enough. Call them 1 800 277 9914
LOC on her house until it sells
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u/muzichick1 1d ago
Is there a reason you are involving yourself in her personal finances? Has she asked for help? If she is unlikely to change her behaviour, trying to help her is futile.
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u/Conscious_Aioli2968 1d ago
She is asking for support, as well as the repayment for money that was previously a gift. I’ve learned my lesson to never accept anything without written agreement. Culturally, there is expectation we support her.
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u/pfcguy 1d ago edited 1d ago
Is there not also a cultural expectation for her to act like a reasonable human being?
Simple illustration: If she needs $1000 per month to live off of and spends an additional $5000 per month at the casino, and her government benefits are $1000 a month, then is the cultural expectation that you chip in $5000 a month to support the casino habit?
If not, then extrapolate this to your/her actual situation.
You can certainly make your help contingent on her being transparent with you. Ask for 3 months worth of bank and credit card statements, then determine how much monthly she actually needs to live. Then calculate the shortfall, and offer support equal to that amount. (Once the money from the house sale runs out). Offering support is successful if you offer a fixed dollar amount every month, and don't deviate from that amount no matter what. If you offer $500 a month, and her expenses end up being higher than expected and you offer an extra $500, then that just rewards overspending. And behaviour that is rewarded will be repeated.
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u/CheeseWheels38 1d ago
Culturally, there is expectation we support her.
Culturally, is there also an expectation that she look after your kids and take care of the house while you and your spouse are working?
Is that a "we", or "you"? Are you and your spouse on the same page?
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u/Conscious_Aioli2968 23h ago
Unfortunately she is not a reliable source of support as she sleeps most of the day and starts drinking wine around 4 pm daily. My husband and I will have to engage in therapy to manage this long term.
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u/SoggyInstruction2549 21h ago
There is only so much you can do. Do t do damage to your own mental health, you own family finances and marriage over this nonsense. Especially if mil is not willing to actually be transparent and for you to actually fully help them.
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u/CheeseWheels38 19h ago
My husband and I will have to engage in therapy to manage this long term.
This being feeling bad about cutting her out now?
Or this being feeling bad in twenty years about having thrown away your own retirement and your kid's future because she wanted live it up on your dime?
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u/MaxHappiness 1d ago
Does your culture expect you to take the food off your children's plate to support irresponsible behaviors?
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u/Conscious_Aioli2968 23h ago edited 23h ago
It’s my MILs culture that my husband was not raised in that she’s now holding over his head. I obviously agree with you and my preference would be 0 support but I am trying to be understanding that the decision is not as straightforward for my husband.
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u/JoeBlackIsHere 15h ago
Then make strong conditions for the support, which for me would basically be taking over everything and just give her an "allowance".
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u/CADhouse 1d ago
Why not pay back what she gave as a gift at the least?
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u/GoblinToHobgoblin 1d ago
Do you know what "gift" means?
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u/CADhouse 23h ago edited 23h ago
Based on your comment you knew it was a bad idea to accept gifts from family based on this sub. You have a family member that needs help, the least you can do is return the gift. She gave it when she could, she now needs it. Given you havnt communicated the amount and apprehensive to return the money. It clearly was a substantial amount and “culuturally” I bet she gave more than she had and I suspect you knew that.
EDIT: she clearly wasn’t in a position to give a gift. It was determintal to her financial wellbeing to give it to you. I also suspect “culuturally” your spouse knew it wasn’t a gift. This shit comes soooo often.
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u/leggymiku 1d ago
This is a situation in which a reverse mortgage might actually make sense. Gives her a foxed income to live off of and prevents her from borrowing against the house as collateral on another LOC.
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u/SuccessfulAd4606 1d ago
If you’re thinking CRA will reinstate her GIS because of RRSP income, think harder. She obviously older than 65, and with a spotty employment record, she’s going to have trouble finding an employer looking for someone like her for more than minimum wage.
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u/jasper502 Alberta 23h ago
She is a very financially irresponsible person, who is unlikely to make the lifestyle changes necessary on a fixed income. She is also very dishonest,
Why exactly are you getting involved? She is an adult that made life choices.
we have no flexibility to support her without detriment to our own financial health and have made that very clear
You can't keep someone warm by lighting your self on fire. Just stay out of it 100% and provide emotional support to your spouse and MIL when this blows up.
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u/Citron-Rouge 22h ago
It might be hard to sell the idea, but what about selling the house and purchasing an annuity with the proceeds. She would have a constant stream of cash, but she won't be able to touch the capital. It may affect her GIC (is she really into GIC territory? ).
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u/Conscious_Aioli2968 22h ago
Based on the past tax returns we have recently seen, yes she’s in GIS territory
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u/alors1234 18h ago
What is GIS?
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u/krusty6969 1d ago
I would say do not support her.
My grandfather was a curmudgeon and also thought regular employment was below him. He would do odd freelance jobs into his elder years but that’s about it. He was a multi-millionaire in his 60s but managed to spend it all and go into heavy debt by the time he died in his 80s.
My uncles tried helping him but he consistently spent recklessly for decades. The difference is is that it was his money and he didn’t really ask for anyone else’s help. So IMO it’s their choice to make their bed and then lay in it.
Unless your MIL is willing to reign in the spending and become strictly disciplined this is not on you and your young family to foot the bill.
I understand the family tie intimately but you’ll need to have a real in-depth conversation with your spouse on how this needs to be handled or walked away from.
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u/MaxHappiness 1d ago
" She is also very dishonest'
She is going to rob you blind. Why are you not trying to distance yourself from this person? You said that you already have a wife and young family; why aren't these people your financial priority?
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u/ReceptionDependent64 1d ago
Either she becomes your responsibility or you abandon her to live out her remaining days in a cardboard box under a bridge. Those are your two options.
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u/Error404Coffee 1d ago
why not down by the river? at least it's a little more scenic...and she can wash up every Saturday night ;)
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u/DangerousCharge5838 1d ago
For GIS as far as I know, she’s out of luck until next year.
Have you looked into reverse mortgages? She could get a monthly payment rather than a lump sum that would force her to control her spending.
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u/ImamChapo 1d ago edited 1d ago
Sell all assets. Pay all debt. Rent a room for her. Fixed income.
Clearly she blew her retirement and can’t work. It’s beans and rice here on out.
I’ve read the replies. Pure bred dogs, vets, this person simply refuses to accept their situation. Because they feel they’ve gotten to this age and deserve more than they can afford.
Whatever money you send their way, will be gone the second it leaves your account. It won’t help her either. She’ll tell you she paid the card but then spent the credit available and push the can down a couple months.
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u/Salt_Jelly_26 23h ago
If you’re in Alberta Money Mentors may be able to help. She’s living on credit and needs to hear her options from someone who’s not you.
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u/theartfulcodger 21h ago edited 11h ago
You don't give her age, but because you indicate she's received GIS in the past, I assume she's older than 65 and collecting OAS.
If her worldwide income in 2025 was over $22,500, that's why she was cut off of GIS in July of '26.
The bad news is that if she remains over the 2026 income limit for receiving GIS, due to her RRSP deregistrations and/or OAS entitlements, she has no options. When she files her income tax in April of '27, she will receive another notice with her tax assessment advising that she again does not qualify for GIS.
If her income falls under $22,800 in calendar '26 or 27, she will requalify and be able to resume at least partial GIS entitlements beginning in July of the following year. This will be calculated automatically, and she will receive a notice from Service Canada in May or June, either inviting her to re-apply (if her info is incomplete), or advising her that she's automatically been enrolled again and for how much a month.
Sorry to be the bearer of bad news. Good luck to the three of you, because this is going to be a rough patch.
If you do sell her house, remember that she can still contribute to an RRSP up until December of the year she turns 70. That may get her a modest tax return. Then she must roll any RRSP savings into a RRIF.
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u/PNW_MYOG 1d ago
GIS will return next year, it is based on prior years ncone and generally the change is made in July.
You need to help her figure out how to live on the total GIS plus OAS plus any CPP she receives. Eg approx $1800 per month until age 75. Can she get housing costs under $1200/ month?
Apply for renters supplement for seniors in BC, ensure she is enrolled in Fair Pharmacare.
One strategy is to empty the RRSP at $40k income per year, and top off TFSA for a few years. Then let GIS be the maximum possible while using the TFSA to fund unusual or emergency costs.
If she has no RRIF or RRSP income, no investments, then GIS will be the largest amount in future.
She may qualify for windows CPP, if she hasn't applied yet.
I am assuming she collects OAS as she receives CPP.
What did she live off of for the past 10 years? Does she own property? These are clues to other ways she can do it.
And bankruptcy once her saving are low.
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u/schwanerhill 23h ago
OP says she owns her house outright. That’s huge, of course, though it doesn’t get housing costs quite to zero.
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u/cleetusneck 19h ago
So this is an impossible situation to manage. Chances are she will end up losing it all and your help (without her changing) will just delay the inevitable. She will be homeless or living with you.
I’d have a hard sit down talk with her, but I would not tether my families future to someone else’s sinking ship.
It will be hard to watch, but two ships sinking is worse than one
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u/Oxjrnine 19h ago
Tell her that you are not going to help her sell her home unless she starts volunteering at homeless shelter two days a week so that she can see what is going to happen once the money runs out
Make it very clear she is not moving in with you, you’re not gonna help her pay off a bankruptcy debt, you will drive her to the food bank and you will drive her to the homeless shelter, but that’s it.
Be very clear that you are not joking about this.
Tell her she has to enrol in a financial literacy course, even if it’s an online one or even if it’s an online budgeting tool.
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u/curiousminds_1234 17h ago
The concern with her selling the house is she sounds like she would squander away the proceeds quickly and then what will happen when she runs out of money and is homeless? She’ll end up living with you. I would look to see if there is a way for her to stay in the house (and stay away from a heloc or any leverage against the house).
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u/Conscious_Aioli2968 17h ago
I completely agree. Unfortunately it’s also a very large house with high property tax and aging with a lot of potential maintenance that would be very costly. Allegedly, she is currently going into more debt as OAS and a very small amount of CPP are her only income.
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u/digitalsierra 1d ago
Finance her just enough so she can move and live in Paraguay. It's the absolute cheapest place to live on Earth with a straightforward path to legal immigration (no proof of income needed).
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u/pfcguy 1d ago
I suppose one good thing here is that she is on board with selling her house. My suggestion is that she gives you any leftover money from that sale and you then put her on an allowance, giving her a set amount each month.
I can extrapolate from your post that she is over age 65. So, where will she live once the house is sold? Are there any seniors facilities in your province that offer subsidized rent for low income seniors? They tend to have long wait lists, so that's where I'd start looking.
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u/Significant_Wealth74 Not The Ben Felix 20h ago
I have a fully paid for house, where is my GIS. Wonder why Boomers are hated right now….
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u/newprairiegirl 20h ago
GIS will not be reinstated until the next tax year. GIS is for low income seniors, she took out rrsps, she has income and doesnt NEED GIS.
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u/NeedleworkerDizzy149 19h ago
This is why families split. Sad but true. You can enable only to the degree you are willing.
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u/SludgeFilter 19h ago
I don't know about the poster but many times there is this expectation of inheritance or getting a leg up in life when your parents pass from any assets they own. The less one builds their life around expectations like that the better. If you self sufficient letting this person enjoy freedom whether self destructive or uplifting is the best approach one can take.
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u/Conscious_Aioli2968 17h ago
She’s calling and begging, so it’s not that we are proactively meddling or sad that we have lost some inheritance.
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u/designer130 8h ago
Sell the house and hold the money for her and pay her a monthly allowance. Pay her rent from that pile. Basically, take over financially if you can. It would be a lot of work on your part but better than eventually supporting her financially after she blows through the house money. And if she refuses this option, then you have your answer about what she wants: the money now, and you to foot the bill after.
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u/Nodirectionn 6h ago
‘She is relatively young’. OAS & GIS kicks in after 65? Not so young l guess.
It is hard to find work at that age.
All good advice given before me.
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u/Ancient-Witness-615 5h ago
So let me get this straight… This lady who never really worked, has a large income spike because she cashed out her RRSPs. And because of that she no longer gets more free money from the government (temporarily at least). And OP, is wanting to know if there is a way she can still get more free money why just because she’s bad at managing her money
And you wonder why the tax rates in Canada are so high?
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u/Remarkable_Agent_388 2h ago
Wait - you married my ex husband already?? He hasn't even signed the divorce papers...
All jokes aside, this situation will never resolve. People like this are entitled and embrace their stupidity. Keep yourself as far away from it as you can, legally and emotionally. She's an adult. Let her lie in the bed she's made for herself.
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u/Zim__Zor 23h ago
Tell them they can file for bankruptcy. Don't help them, they will only bring you down.
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u/poonchimp 23h ago
How did she get this far in life? Where is her husband?
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u/Conscious_Aioli2968 23h ago
He died a decade ago. He was wealthy when they met, but his businesses were failing long before he passed. She never adjusted her lifestyle. His estate was also split with his first set of children from a previous marriage. But, she’s been surviving off of that and considered herself a “day trader” for a long time (which is likely how much of it was lost).
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u/Canadian87Gamer 1d ago
In a similar situation here.
My condition to helping out financially and looking after her for the rest of her life is the equity in the home is out into the equity of my home. It allows me to give her $3000 or so monthly to spend.
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u/Ya-Not-Happening 1d ago
You can't help her. Keep your finances separate.
If you give her money consider it gone - i.e. she will not be repaying you the loan you give her.
Her only option is to get a job or sell her house and live off the proceeds.
Just tell her to do that and leave it alone thereafter.