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Millions of retirees and people with disabilities rely on government benefits like Old Age Security (OAS), the Guaranteed Income Supplement (GIS), and the Canada Disability Benefit for fixed income payments. Unlike a working income, which may include raises, bonuses, or the ability to work more hours, fixed income provides limited flexibility to respond to rising costs. When simply covering everyday basics like food and housing is a challenge, a health issue or other emergency can result in debt that’s difficult to manage.
Here we explain some of the main sources of fixed income for Canadians, provide tips for lowering your expenses, and offer solutions designed to help you find debt relief.
Who Lives on a Fixed Income?
Living on a fixed income means your income remains stable from month to month, with little room to manage unexpected costs or debt. Many seniors, retirees, veterans, people with disabilities, and those on long-term assistance live on a fixed income in Canada.
Individuals on a set income may face financial challenges, including rising housing costs, inflation, and increasing prices for essentials such as groceries or medication.
Primary Source of Fixed Income
The federal government is one of the main sources of fixed income for Canadians. Some of the benefit programs that support retirees and disabled Canadians include:
- Old age security (OAS). This is a monthly payment provided by the government to eligible seniors 65 and over. The maximum payments, as of January 2026, varies from about $742 per month at age 65, and $817 at age 75.
- Guaranteed income supplements (GIS). This benefit is also available to seniors over 65. It’s available to low-income OAS pensioners. The maximum monthly payment varies based on your annual income but ranges from around $667 to $1,108, as of January 2026.
- Canadian pension plan (CPP). The CPP is another benefit available to seniors. You may be eligible if you paid into the plan during your working years. The maximum pension in 2026 is $1,433 per month.
- Canada disability benefit. This benefit supports Canadians aged 18 to 64 with disabilities. You can get up to $200 per month, based on your family income.
As you can see, if you rely on government benefits to pay your bills, you likely won’t have much flexibility in your budget. So, what can you do if you don’t have enough money to cover your bills?
Tips to Reduce Your Monthly Expenses
To help make ends meet, look for ways to reduce your monthly expenses. If you don’t have a budget, the first step is to make one.
The purpose of a budget is to help you visualize where your money is coming from and going to. Start by listing your income and expenses. Your income might consist of government benefits, a pension, investments, or a part-time job. Expenses consist of fixed (rent, mortgage, insurance) and variable (groceries, utilities, transportation).
By listing your expenses, you can see if it’s possible to make cuts. For instance, can you eliminate any subscriptions or reduce the amount you spend on takeout?
Here are some other strategies you can consider to reduce your monthly expenses:
- Downsizing can reduce your financial obligations. A smaller space can also mean less cleaning and maintenance.
- Meal plan. Cooking from home and planning your meals can reduce cost and food waste.
- Minimize transportation costs. If you live in an area with good public transportation, consider selling your car to eliminate car payments, insurance, and gas.
- Reduce utility costs. Making small changes, such as hanging laundry to dry instead of using the dryer, reducing water consumption, and adjusting the heating or cooling, can help lower your utility bills.
- Use local resources. If you’re struggling to put food on the table, you can look into community resources like your local food bank. If you need help finding these resources, you can access a free, confidential helpline by calling 2-1-1. You can find essential services close to home, including food, housing, and mental health support.
Another way to balance your budget is to increase your income. If you’re able, you might try to find a part-time job. Unfortunately, this is the reality for many retired Canadians who have to return to work or continue working into retirement out of necessity.
What Happens to My Benefits if I Can’t Pay My Debt?
Before exploring debt relief options, it’s important to note that you won’t lose your government benefits if your creditors come after you for your unpaid debt. Your Canada Pension Plan and Old Age Security benefits are generally protected from your creditors even if you owe them money.
How to Get Out of Debt on a Fixed Income
If you’re dealing with growing debt, and you can’t fix it by lowering your expenses or increasing your income, you have other options, including:
Consumer Proposal
A Consumer Proposal is a legal process that can only be administered by a Licensed Insolvency Trustee (LIT). In a Proposal, you work with your LIT to create an offer to your creditors to pay a portion of what you owe, to extend the time you have to pay, or both. If your Proposal is accepted by your creditors, you have up to five years to complete it. In a Consumer Proposal, you need to have a regular income, which includes a fixed income, that allows you to make regular payments.
Bankruptcy
If your debt is overwhelming and you can’t keep up with your bills, Bankruptcy might be your best option. In Bankruptcy, you’re released from most of your unsecured debts. As soon as your LIT files your Bankruptcy documents, you receive protection from your creditors. All wage garnishment, collection calls, and creditor lawsuits will stop.
Debt consolidation
Debt consolidation is when you combine multiple debts into one monthly payment. Ideally, you want to use a low interest loan or balance transfer credit card to consolidate higher interest debt. This can simplify the debt repayment process and help you save money on interest. However, if you’re on a low fixed-income you may find it difficult to qualify for a consolidation loan, as they usually require a good credit score and proof of income.
Credit counselling
The goal of credit counselling is to help you change your financial habits; it doesn’t eliminate or reduce your debts. You can work with a credit counsellor to understand how you got into debt, and they can provide information on how to recover. You can learn skills like how to manage your credit and how to make a budget.
Canada Debt Relief: Speak to a Licensed Insolvency Trustee
Living with debt on a fixed income can feel overwhelming and isolating. Not having the money to cover your day-to-day expenses, let alone debt payments, can be a lot to manage. But you don’t have to do it alone. We’ve assisted many Canadians in this position, and we’re here to help you. Our experienced Licensed Insolvency Trustees can walk you through the available debt relief programs. When you’re ready, give us a call at 1-888-371-8900 for a free, no-obligation consultation.
