OAS clawback — formally called the OAS recovery tax — is a federal tax that reduces your Old Age Security pension when your net income exceeds a set threshold. For every dollar of net income above the threshold, 15 cents of OAS is clawed back.
How OAS Clawback Works
On 2026 income, the clawback begins at net income of $95,323. OAS is fully clawed back at $155,109 for ages 65 to 74 and $161,088 for ages 75 and older. Large RRIF withdrawals are one of the most common triggers. The recovery tax is assessed on your tax return and can be withheld from your OAS payments throughout the year.
Why It Matters in Retirement
Many retirees are surprised by the clawback because RRIF minimum withdrawals increase significantly in their 70s and 80s. Strategic income planning — TFSA withdrawals, pension income splitting, and RRSP meltdown — can significantly reduce clawback exposure.
Related Resources
This article provides general financial education for Canadians. It is not personalized financial advice. For guidance specific to your situation, consider speaking with a CFP professional.