Following a separation in Ontario, you must notify the CRA after living apart for 90 days. This shifts your status to single, meaning your eligibility for the Ontario Senior Homeowners’ Property Tax Grant (OSHPTG) is recalculated based solely on your individual income, which may increase your grant amount.
Navigating Gray Divorce and Provincial Tax Grants
Divorcing later in life, often referred to as a “gray divorce,” comes with unique financial challenges. For senior citizens residing in Ontario, fixed incomes and rising property taxes are major concerns. The Ontario Senior Homeowners’ Property Tax Grant (OSHPTG) is a provincial initiative designed to help low-to-moderate-income seniors pay their property taxes. Whether you are keeping the matrimonial home in Kingston, Thunder Bay, or Windsor, a separation fundamentally alters how the Canada Revenue Agency (CRA) views your household income.
When you are married or living common-law, the CRA combines both spouses’ incomes to determine if you qualify for the grant. If your joint income was too high, you might have been disqualified in the past. However, once you separate, your eligibility is based on your single income. For many seniors, this means they suddenly become eligible for the maximum provincial grant. It is highly recommended to consult with an accountant or a family lawyer from our directory to ensure you maximize your entitlements.
Step-by-Step Process for Updating Your Status in Ontario
To ensure you do not miss out on the OSHPTG after a separation, you must follow specific reporting procedures with the federal government, as the CRA administers this Ontario grant on behalf of the province. Here is how you generally proceed.
Step 1: Wait the Mandatory 90-Day Period
The CRA does not consider you legally separated the moment you sleep in different rooms. For tax purposes, you must live separate and apart for a continuous period of at least 90 days. Once this 90-day period passes, your separation date is retroactively recognized as the day you first began living apart.
Step 2: Update Your Marital Status with the CRA
After the 90 days have elapsed, you must notify the CRA by the end of the month following the month your status changed. You can do this easily online through your “My Account” portal, by calling the CRA directly, or by mailing a completed Form RC65 (Marital Status Change). This is a critical step, as it recalculates your benefits like the GST/HST credit and the Ontario Trillium Benefit immediately.
Step 3: File Your Taxes as Separated or Divorced
When tax season arrives, you will file your T1 General return indicating your new marital status. Because you are now assessed on a single-income basis, your net income line will likely be much lower than it was during your marriage. Ensure you enter the total amount of property tax you paid for your principal residence in Ontario during the year.
Step 4: Apply for the OSHPTG on the ON-BEN Form
The grant is not automatic; you must apply for it every year. When filing your taxes, you must complete the ON-BEN Application Form (Ontario Trillium Benefit and Ontario Senior Homeowners’ Property Tax Grant). Check the specific box to apply for the OSHPTG. If you qualify based on your newly adjusted single income, the grant will be paid out to you, usually four to eight weeks after your notice of assessment.
How Much Can You Get and What Are the Income Limits?
The OSHPTG provides a maximum grant amount each year, which is reduced depending on your income. Below are the current parameters (subject to annual inflation adjustments by the province):
| Eligibility Criteria / Benefit | Amount (CAD) |
|---|---|
| Maximum Grant Amount (Single Senior) | Up to $500 per year |
| Income Threshold for Maximum Benefit | Single net income under $35,000 |
| Partial Grant Eligibility | Income between $35,000 and $50,000 |
| Cost to Update CRA Status | $0 (Free to submit Form RC65) |
By splitting the household, a senior who previously exceeded the $60,000 joint income limit for couples (after which the grant is fully phased out) may now easily fall under the $35,000 single income limit, unlocking the full $500 grant.
How Long Does the Process Take?
The overall timeline relies heavily on the tax calendar. You must wait 90 days to declare your separation. Once you update the CRA, your general benefits are usually recalculated within 4 to 6 weeks. However, the actual OSHPTG payout only occurs after you file your annual income tax return in the spring, with funds typically arriving by direct deposit or cheque shortly after you receive your Notice of Assessment.
Frequently Asked Questions (FAQ)
What if we still live in the same house but are separated?
In Ontario, you can be legally separated while living under the same roof, provided you live independent lives (e.g., separate bedrooms, separate finances, no shared meals). The CRA will accept this status, allowing you to file as single and apply for the OSHPTG based only on your individual income.
Who claims the property tax if both names are still on the deed?
If you both still own the home and both pay a portion of the property taxes, you can only claim the portion that you actually paid with your own money on your ON-BEN form. If one spouse paid the entire property tax bill, only that spouse can claim it for the grant.
Does receiving spousal support affect my eligibility?
Yes. Periodic spousal support payments are considered taxable income in Canada. This amount must be added to your total net income on your tax return, which could potentially push you over the $35,000 or $50,000 threshold for the OSHPTG.
What happens if we sell the matrimonial home?
If you sell the home and move into a rental apartment, you will no longer qualify for the Senior Homeowners’ Property Tax Grant for the following tax year. However, you may then qualify for the energy and property tax components of the Ontario Trillium Benefit as a renter.
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