The OAS clawback, officially the OAS recovery tax, takes back 15 cents of Old Age Security for every dollar of net income above C$95,323 in 2026. At C$155,320 of income for ages 65 to 74, or C$161,320 at 75 and over, the whole pension is gone. A retiree with C$110,000 of net income in 2026 repays about C$2,200 of a roughly C$9,150 pension. Most of what drives the clawback, RRIF withdrawals, pension income and which spouse reports what, can be planned years ahead.
How the clawback works
OAS pays up to C$762.50 a month at 65 to 74 and C$838.75 at 75 and over, for October to December 2026. The recovery tax compares your net world income for a year with a threshold, and you repay 15% of the difference.
| Income year | Clawback starts | OAS fully repaid, 65 to 74 | OAS fully repaid, 75 and over | Taken from payments |
|---|---|---|---|---|
| 2025 | C$93,454 | C$152,062 | C$157,923 | July 2026 to June 2027 |
| 2026 | C$95,323 | C$155,320 | C$161,320 | July 2027 to June 2028 |
The government’s own example: on C$100,000 of 2025 income, the repayment is 15% of C$6,546, or C$981.90.
The repayment is taken from monthly payments starting in July of the year after the income year, for 12 months. It shows on line 23500 of your return. If you live outside Canada, you file an OAS Return of Income each year to keep payments going.
Inside the clawback range, every extra dollar of income costs you 15 cents of OAS on top of your normal income tax. That’s why a planner treats the C$95,323 line as a tax bracket of its own.
What counts, and what doesn’t
The test is net income, so these count:
- RRSP and RRIF withdrawals, including the required minimum
- Workplace pension income and CPP
- Interest, dividends and taxable capital gains in non-registered accounts
- Employment and business income
- The taxable part of a pension lump sum you take in cash
TFSA withdrawals don’t count, because they aren’t income. That makes the TFSA the main tool for spending above the line without raising it.
Moves that lower the clawback
Split pension income with your spouse
You can allocate up to 50% of eligible pension income to a spouse or common-law partner, with a joint election on Form T1032 filed with both returns. From 65, RRIF and LIF payments, annuity payments and RRSP annuity payments qualify. Before 65, mainly pension income from a workplace plan qualifies. CPP and OAS themselves don’t qualify, so the planning is done with the other income.
A spousal RRSP, set up years earlier, does the same job and can work before 65.
Draw the RRSP down earlier
At 71 your RRSP becomes a RRIF and the minimum withdrawal starts at 5.28% of the balance for most RRIFs, rising every year: 5.82% at 75, 6.82% at 80. On a C$800,000 RRIF, the first minimum is about C$42,000, whether you need it or not. Drawing some of the RRSP in your 60s, often between retiring and starting CPP or OAS, fills lower tax brackets and leaves a smaller RRIF to force income over the threshold later.
Defer OAS when your income is high
Each month you delay OAS after 65 adds 0.6%, up to 36% at 70. If you’re still working or drawing heavily in your late 60s and would lose much of the pension anyway, deferring trades payments you’d mostly repay for a larger pension later, when your income may be lower. One cost: you can’t get the Guaranteed Income Supplement in months you don’t receive OAS, though that rarely matters to someone near the clawback.
Use the TFSA for spending and growth
The 2026 TFSA limit is C$7,000, and unused room carries forward. Moving savings from non-registered accounts into a TFSA each year shifts future income out of the test. Taking a lump sum from the TFSA, rather than a large RRIF withdrawal, for a big expense keeps that year’s income down.
Time the big taxable events
A large capital gain, a cottage sale or a cash payment from a pension can push one year far into the clawback. Spreading a sale over years, or making it before 65, can save most of that year’s OAS.
Common mistakes
- Treating the clawback as a tax you can’t plan. Most of it comes from the timing of withdrawals, which you control.
- Leaving the RRSP untouched until 71, then facing large forced withdrawals for life.
- Splitting pension income in a way that pushes the lower-income spouse over the line. The aim is to keep both under it.
- Taking OAS at 65 while still earning a high salary, then repaying most of it.
- Forgetting the lag. Deductions from July 2027 to June 2028 are based on 2026 income, so one high year keeps cutting payments well into the next two years.
- Avoiding the clawback at any cost. Paying a little clawback now can be better than leaving a large RRIF to be withdrawn later at higher rates.
Questions to ask a planner
- How close will my income be to C$95,323 in each year of retirement, before and after the RRIF starts?
- How much should I withdraw from my RRSP each year before 71?
- What would pension income splitting save us, and which spouse should report what?
- Should I defer OAS, and to what age?
- How much should go into our TFSAs each year, and from where?
- How are you paid, and do you earn anything from the products you recommend?
When a fee-only planner is worth it
If your retirement income will land between about C$80,000 and C$160,000 a person, or your RRSP and RRIF will be large enough to force income higher later, a year-by-year tax plan usually pays for itself. The clawback can cost up to the full pension, about C$9,000 a year for each spouse.
A fee-only or advice-only planner charges for the plan, not for the money you move. Among Canadian fee-only planners who publish prices:
- One-time plan: a median C$1,900 (middle half C$950 to C$3,000, 46 firms)
- Hourly: a median C$250 (middle half C$170 to C$298, 15 firms)
- Ongoing planning: a median C$2,300 a year (middle half C$1,200 to C$4,000, 21 firms)
Clawback planning is a yearly job once the RRIF starts, which is where an ongoing fee can make sense. The samples are small; the Canadian cost guide shows how to read them.
Where to find one
Browse fee-only planners by province in the public graph: Ontario, British Columbia, Alberta, Quebec, Manitoba, Saskatchewan, Nova Scotia, Newfoundland and Labrador and Yukon. Or start from the tax planning specialty, the list of advisors for retirees, or fee-only advisors in Ontario.
The glossary covers Old Age Security and the OAS clawback in brief. For the related timing decision, read when to take CPP.