The OAS clawback — officially the OAS recovery tax — takes back 15 cents of Old Age Security for every dollar your net income rises above a threshold. For the 2025 income year that threshold is $93,454; the 2026 threshold is projected around $95,300 (indexed, confirmed by CRA each fall).
The math, plainly
Clawback = (net income − $93,454) × 15%. At the July–September 2025 maximum OAS of $734.95/month (ages 65–74), the pension disappears completely at roughly $152,250 of net income; for those 75+ receiving $808.45, at about $158,130.
| Net income (2025) | Annual clawback | Monthly OAS kept (65–74) |
|---|
| $93,454 or less | $0 | $734.95 |
| $100,000 | $982 | $653.10 |
| $110,000 | $2,482 | $528.13 |
| $125,000 | $4,732 | $340.63 |
| $152,250+ | full | $0 |
Six legal moves that protect your OAS
- Split pension income. Up to 50% of eligible pension income (RRIF after 65, employer pensions) can shift to a lower-income spouse's return — often the single biggest clawback killer.
- Drain RRSPs before 65. Withdrawals in your early-60s gap years are taxed then — instead of inflating net income during OAS years.
- Favour the TFSA. TFSA withdrawals are invisible to the clawback; growth moved there never threatens OAS.
- Defer OAS to 70 if you're still earning — 0.6% more per month (+36% at 70), and no benefit to claw while you wait.
- Watch capital gains timing. A single large sale can wipe out a whole year of OAS; spreading a sale across two tax years can save thousands.
- Younger spouse's age for the RRIF lowers forced minimum withdrawals — less income, less clawback.
FAQ
Is the OAS clawback based on individual or household income?
Individual net income. Unlike GIS (which uses combined income), each spouse's OAS is tested against their own income — which is exactly why pension splitting works.
What income counts toward the clawback?
Net income on line 23600: employment, pensions, RRIF/RRSP withdrawals, CPP, investment income and taxable capital gains. TFSA withdrawals and the tax-free half of capital gains don't count.
How is the clawback actually collected?
Two ways: a recovery-tax deduction from monthly OAS payments (based on last year's return), then a final true-up on your tax return. High one-year income means smaller OAS cheques the following July–June.
Does GIS have a clawback too?
GIS reduces much faster — roughly 50 cents per dollar of non-OAS income — but it's a reduction, not a recovery tax, and it uses different income rules. Low-income seniors should check GIS before worrying about the clawback.
Sources: Service Canada (OAS rates July–September 2025), Canada Revenue Agency (recovery tax threshold, line 23600) · Updated August 2026.
