OAS, GIS, and CPP When Raising a Grandchild: What Changes and What Doesn't

Your Pension Does Not Shrink Because You Took In a Grandchild

One of the most persistent fears among grandparents stepping into a caregiving role is that accepting government support for the child will somehow reduce their pension. For the core federal retirement benefits — Old Age Security, the Guaranteed Income Supplement, and Canada Pension Plan — this fear is unfounded. Taking in a grandchild does not reduce any of these payments.

But the financial picture is more nuanced than that. Some benefits improve when you add a child to your household. Others stay the same. And a few tax provisions exist specifically for caregivers that most grandparents never learn about.

Old Age Security and the Guaranteed Income Supplement

OAS is a flat benefit based on years of residence in Canada. It is not affected by your household composition — whether you live alone or have three grandchildren under your roof, the OAS amount stays the same.

GIS is income-tested, but the income calculation looks at your net income (and your spouse's, if applicable). The key point: non-taxable income does not count. PSI maintenance payments, the Canada Child Benefit, and child support received are all non-taxable. None of them increase your GIS-assessed income, and none of them reduce your GIS payment.

The one scenario where GIS could be indirectly affected is if your adjusted family net income rises due to new taxable income — for example, if you take on part-time work to help cover costs. But the grandchild's presence alone does not change your GIS.

Canada Pension Plan

CPP retirement benefits are calculated from your lifetime contributions. Taking in a grandchild has zero effect on your CPP pension amount.

However, the child may be eligible for their own CPP Children's Benefit if one of their biological parents has died or receives a CPP Disability Benefit. The CPP Children's Benefit pays $307.81 per month per eligible child. For children under 18, the benefit is paid to the person or agency with care of the child — which means you, as the caregiver, receive and manage the payment.

For youth aged 18 to 25 enrolled full-time in an accredited educational institution, the benefit continues and is paid directly to the student.

The CPP Children's Benefit is not deducted from PSI maintenance if the child is under a PSI order. The two payments stack.

Saskatchewan Seniors Income Plan

The Saskatchewan Seniors Income Plan (SIP) provides a quarterly supplement to low-income seniors receiving the federal GIS. Because SIP eligibility tracks GIS status, the analysis is the same — non-taxable child-related benefits do not affect your SIP payment.

If you are currently receiving SIP, adding a grandchild to your household does not reduce it.

Tax Credits Available to Kinship Caregivers

Several federal and provincial tax provisions may apply when you are raising a grandchild:

Canada Caregiver Credit: If the child has a physical or mental impairment, you may be able to claim the Canada Caregiver Credit on your personal tax return. This is a non-refundable credit — it reduces tax owed but does not generate a refund if you owe nothing.

Disability Tax Credit transfer: If the child is approved for the DTC (Form T2201), the unused portion of the child's disability amount can transfer to your return. This can be worth over $1,500 in reduced taxes. See our guide on disability benefits for kinship caregivers for the full process.

Eligible Dependant Credit: If you are single, divorced, separated, or widowed and meet CRA's conditions for an eligible dependant, you may be able to claim this amount for a child under 18 who lives with you. The actual tax reduction depends on the child's income and your circumstances; the maximum is roughly $2,300 in federal tax savings for 2026.

Child care expenses deduction: You may be able to deduct eligible child-care expenses if they meet CRA's conditions, including that the expenses enable you to work, attend school, or conduct qualifying research. Saskatchewan's $10-a-day child care program caps fees for children under six in licensed care, but only eligible out-of-pocket expenses and care for older children may be deductible.

The Overall Financial Picture

For most grandparents on fixed retirement income, the financial impact of taking in a grandchild is additive, not subtractive. Your existing pension stays intact. The Canada Child Benefit adds hundreds per month. Tax credits may reduce your tax bill. And depending on your care arrangement, PSI maintenance or the Saskatchewan Employment Incentive can add further support.

Our Saskatchewan Kinship Financial Help Guide includes a complete benefits stacking worksheet that shows every federal and provincial payment layered together based on your specific care arrangement, so you can see the full picture before making decisions.

See more Saskatchewan guides →