LLQP Segregated Funds & Annuities · Component 1.2 · 35% of the exam
The Guaranteed Income Supplement (GIS) is:
- APaid to every OAS recipient as a fixed top-up, regardless of what other income they receive
- A non-taxable, income-tested supplement for low-income OAS recipients
- CA private annuity purchased by the government on behalf of retirees with no pension
- DContribution-based, so it rewards seniors who paid into the system for the longest period
Correct answer: B) A non-taxable, income-tested supplement for low-income OAS recipients
GIS clawback rates are high; for low-income clients, sheltering income (for example, in a TFSA rather than RRSP) can preserve GIS.
Why the other options are wrong
- AGIS is income-tested, so not every OAS recipient receives it.
- CIt is a government benefit, not a purchased annuity.
- DIt is not contributory; it is based on income.
Exam tip
GIS is steeply income-tested; TFSA withdrawals do not reduce it, RRIF withdrawals do.
Common mistake
Recommending RRSP contributions to a low-income client who will rely on GIS.
What this tests
CISRO competency component 1.2 — Assess the client's needs and situation — which is weighted at 35% of the Segregated Funds & Annuities module. Written against the published curriculum.
More from component 1
- The first step before recommending a segregated fund or annuity is to:
- A client's 'time horizon' for an investment is:
- 'Risk tolerance' in an investor profile refers to:
- A client says he wants 'high returns with no risk of losing money'. The agent should:
- Investment objectives are commonly classified as:
- Why is the client's marginal tax rate relevant to a segregated fund recommendation?
Practice the whole Segregated Funds & Annuities module
Timed sets weighted like the exam, and review of every question you miss. Free to start.