Can Canada Revenue Agency Garnish CPP And OAS

CPP And OAS Garnishment: Understanding the Power of the CRA

The Canada Revenue Agency, often abbreviated as CRA, is not your typical creditor. Various misconceptions may paint a different picture, but the fact remains that the CRA has more authority than standard creditors like credit card companies. Hence, it is crucial to understand that the regular garnishment rules do not apply to the CRA.

The Power of CRA Over Pensions

The Canada Revenue Agency holds the power to garnish all types of pensions. These include the CPP (Canada Pension Plan) and OAS (Old Age Security). This power is extended to such an extent that if you owe taxes to the CRA and you are a recipient of either CPP or OAS, the CRA has the authority to withhold some or even all of your monthly pension payments.

 

Note: The CRA’s ability to garnish CPP and OAS is not limited by the percentage restrictions that other creditors may face.

 

Your Choices When Dealing with CRA Debt

Despite the seemingly overwhelming power of the CRA, individuals do have options to tackle the situation.

 

Initiating a dialogue with the Canada Revenue Agency: Before the CRA decides to garnish your pension (CPP or OAS), you have the possibility to discuss a re-payment plan with them.

Considering a Consumer Proposal: This is another viable option to deal with CRA debt.

Understanding the CRA’s Authority

As highlighted earlier, the CRA isn’t a typical creditor. But what does that mean in practical terms? Well, it simply means that the CRA can take more drastic measures to ensure the repayment of owed taxes.

This includes the ability to garnish CPP and OAS pensions. It’s important to remember that they can do this without needing to go to court, something that other creditors cannot do.

Conclusion

Understanding the power of CRA and the specific rules around garnishment of CPP and OAS can help individuals better navigate their financial obligations and potential solutions when dealing with tax debt. It is always advisable to seek professional advice in these matters to protect your financial future.

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