This page explains the Old Age Security (OAS) pension recovery tax, which almost everyone calls the OAS clawback. It is education, not tax or financial advice. Your exact recovery tax is on your notice of assessment and your T4A(OAS) slip; check My Service Canada Account or CRA My Account, or call the CRA, before acting on any estimate here.
What are the OAS clawback thresholds for 2025, 2026 and 2027?
The OAS clawback threshold for 2025 income is $93,454, and the recovery tax on that income is deducted from OAS payments from July 2026 to June 2027. The table below is ESDC’s schedule by income year. Read it left to right: the year you earned the income, the 12 months the recovery tax is taken from your OAS, where the clawback starts, and the income at which the whole pension is gone for each age group.
How to read this table: find the year you earned the income in the first column. Net income above the third column is clawed back at 15 cents per dollar; at the age-group figure the whole OAS pension for that period is recovered.
| Income year | Deducted from OAS | Clawback starts above | Whole pension gone at (age 65 to 74) | Whole pension gone at (age 75 and over) | Status |
|---|---|---|---|---|---|
| 2024 | July 2025 to June 2026 | $90,997 | $148,451 | $154,196 | Final |
| 2025 | July 2026 to June 2027 | $93,454 | $152,062 | $157,923 | Final |
| 2026 | July 2027 to June 2028 | $95,323 | $155,320 | $161,320 | Final |
Source: Old Age Security pension recovery tax — income recovery thresholds table (Canada.ca); Old Age Security pension recovery tax — footnote 1, estimates to September and final from October (Canada.ca); Old Age Security pension recovery tax — non-residents (Canada.ca); Old Age Security pension recovery tax — Return of Income deadline (Canada.ca); Repayment of Old Age Security pension — income line and return lines (Canada.ca); Repayment of Old Age Security pension — worked example (Canada.ca); Repayment of Old Age Security pension — deductions spread over 12 payments (Canada.ca); Repayment of Old Age Security pension — financial hardship (Canada.ca); Line 23500 – Social benefits repayment (CRA); Line 23500 – Social benefits repayment, withheld recovery tax (CRA); Repayment of Old Age Security pension — contact to check or increase the deduction (Canada.ca); Contact the Canada Revenue Agency — individual income tax enquiries line (CRA); Old Age Security pension recovery tax — CRA contact for tax questions (Canada.ca); T1213OAS Request to Reduce Old Age Security Recovery Tax at Source (CRA); Pension income splitting — 50% limit (CRA); Pension income splitting — RRIF and annuity income at 65 or older (CRA); Pension income splitting — OAS and CPP not eligible (CRA); Pension income splitting — effect on OAS repayment (CRA); Line 21000 – Deduction for elected split-pension amount, Form T1032 (CRA); What is a TFSA — TFSA impact on government benefits and credits (CRA). In effect from July 1, 2026; checked October 11, 2026.
Three searches point at this table, and they mean different rows:
- “OAS clawback 2025” usually means 2025 income: threshold $93,454, collected from July 2026 to June 2027. Some people mean the clawback taken during 2025, which used 2024 income and a threshold of $90,997.
- “OAS clawback 2026” can mean the clawback being deducted right now (still the 2025-income row) or the threshold for income you are earning in 2026, which is $95,323.
- “OAS clawback 2027” means the recovery period July 2027 to June 2028, based on 2026 income. ESDC’s table treats that row as final from October 2026; from January to September it was an estimate.
How does the 15% recovery tax work?
The recovery tax is 15% of your individual net income above the threshold, capped at the OAS you received for the year. ESDC and the CRA use net income before adjustments from line 23400 of your tax return (the CRA’s line 23500 page adds a few rare adjustments for UCCB and RDSP amounts). Residents report the repayment on lines 23500 and 42200 of the return, and Service Canada then withholds the next year’s estimated recovery tax from your monthly payments.
The timing trips people up. There is always a lag of about 18 months:
- You earn the income in one calendar year, say 2025.
- You file your return by spring 2026. The CRA calculates the repayment on the 2025 income.
- Service Canada deducts recovery tax from your OAS for 12 months, from July 2026 to June 2027, and sends you an advisory letter about it. ESDC says the deductions are spread over 12 monthly payments so you are not hit with a lump sum.
- The next return reconciles it. The recovery tax withheld appears in box 22 of your T4A(OAS) slip and is claimed on line 43700, so any gap between what was withheld and what you actually owe is settled then.
Non-residents are handled differently. If you live outside Canada in a country where the non-resident tax on Canadian pensions is 25% or more, you file an OAS Return of Income each year, reporting net world income, by April 30. If the CRA does not receive it, OAS payments stop in July.
Worked example: one person, 2025 income
Take a single retiree aged 68 whose 2025 net income on line 23400 is $110,000, made up of a workplace pension, CPP, RRIF withdrawals, some interest and the OAS pension itself.
- Income above the 2025 threshold: $16,546
- Recovery tax for the year: $2,481.90
- Rough monthly deduction from July 2026 to June 2027: about $207
That retiree still keeps most of their OAS. ESDC’s own example on its repayment page uses a 2025 income of $100,000, which gives a recovery tax of $981.90, or approximately $82 a month from July 2026.
How much OAS do you lose at each income level?
The table below runs the same formula in steps from the 2025 threshold up to past the full clawback. It is a planning illustration built on ESDC’s published threshold and 15% rate, not your official assessment: the real figure is capped at the OAS you were actually paid, which depends on your age, deferral and years of residence.
| 2025 net income (line 23400) | Recovery tax for the year | About per month, July 2026 to June 2027 | Age 65 to 74 | Age 75 and over |
|---|---|---|---|---|
| $93,454 or less | None | None | Full pension | Full pension |
| $95,000 | $231.90 | about $19 | Partial clawback | Partial clawback |
| $100,000 | $981.90 | about $82 | Partial clawback | Partial clawback |
| $110,000 | $2,481.90 | about $207 | Partial clawback | Partial clawback |
| $120,000 | $3,981.90 | about $332 | Partial clawback | Partial clawback |
| $130,000 | $5,481.90 | about $457 | Partial clawback | Partial clawback |
| $140,000 | $6,981.90 | about $582 | Partial clawback | Partial clawback |
| $150,000 | $8,481.90 | about $707 | Most of the pension | Most of the pension |
| $155,000 | $9,231.90 or the whole pension | about $769, or the whole monthly pension if lower | Whole pension (above $152,062) | Nearly all (whole at $157,923) |
Two things stand out. First, the clawback is gradual: a retiree a few thousand dollars over the line loses a few hundred dollars a year, not their pension. Second, the effective cost of income in the clawback range is higher than the tax bracket suggests, because each extra dollar is taxed and also costs 15 cents of OAS. That is the reason clawback planning focuses on which dollars you draw, not just how many.
Why is the full clawback level higher at 75?
The full clawback level is higher for ages 75 and over because the OAS pension itself is bigger. Since July 2022, the pension has been permanently 10% higher from the month after your 75th birthday. The recovery tax threshold is the same for both age groups; only the point where the whole pension has been repaid moves up, to $157,923 of 2025 income instead of $152,062.
| What changes at 75 | Age 65 to 74 | Age 75 and over |
|---|---|---|
| Clawback starts above (2025 income) | $93,454 | $93,454 |
| Recovery rate | 15% | 15% |
| Whole pension gone at (2025 income) | $152,062 | $157,923 |
| Whole pension gone at (2026 income) | $155,320 | $161,320 |
| OAS pension size | Base amount | 10% higher |
Someone who deferred OAS is in the same position: a deferred pension is larger (0.6% more per month of deferral after 65, up to 36% at 70), so more of it is left at any income level above the threshold. A footnote on ESDC’s table says the full-clawback figures are based on maximum OAS pension amounts. See how OAS eligibility, residence and partial pensions work if you receive a partial pension, since a smaller pension is fully recovered at a lower income.
What counts as income for the OAS clawback?
Everything that lands in your net income on line 23400 counts: employment and self-employment income, CPP or QPP, workplace pensions, RRIF and RRSP withdrawals, annuity income, interest, the grossed-up amount of Canadian dividends, taxable capital gains, rental income and the OAS pension itself. Deductions taken before line 23400, such as RRSP contributions while you can still make them, or the deduction for a pension amount split to your spouse, lower it.
What does not count is just as useful:
- TFSA income and withdrawals. The CRA states that income earned in a TFSA and money withdrawn from it do not affect federal income-tested benefits, and it names OAS and the GIS. A TFSA withdrawal is generally tax-free and is not reported as income.
- The return of your own capital from a non-registered account (only the gain or income is taxed).
One item surprises people in the other direction: the Guaranteed Income Supplement is not taxed, but it is reported as net federal supplements on line 14600, so it sits inside line 23400, and the CRA says net federal supplements can be repaid along with OAS. In practice anyone near the clawback range is well above GIS income limits. The current OAS and GIS maximums are on the OAS payment amounts page.
How can you reduce the OAS clawback?
The options below are the ones the CRA and ESDC rules themselves make possible. They are described here as education: whether any of them suits you depends on your whole tax picture, and a fee-only planner or tax professional can run the numbers on your actual return.
| Approach | How it affects the clawback | The official rule behind it |
|---|---|---|
| Pension income splitting | Moves eligible pension income from the higher-income spouse to the lower one, lowering the higher spouse’s line 23400 | Up to 50% of eligible pension income, Form T1032, one joint election per year; RRIF income qualifies at 65 or older |
| Drawing from a TFSA instead of a RRIF above the minimum | TFSA withdrawals do not affect OAS, so a one-time expense paid from a TFSA does not push you over the threshold | CRA: TFSAs have no effect on OAS or the GIS |
| Deferring OAS | No OAS is paid (or clawed back) while you defer, and the pension is larger when it starts | 0.6% more per month after 65, up to 36% at 70 |
| Spreading large one-time income | Taxable capital gains or a large RRSP withdrawal in one year can trigger a clawback that smaller amounts over several years would not | Recovery tax is set each year on that year’s net income |
| Asking for lower withholding when income falls | Stops Service Canada withholding recovery tax you will not owe | Form T1213(OAS), request in writing to the CRA |
Worked example: pension splitting for a couple
Both spouses in a couple are over 65. Spouse A has 2025 net income of $120,000, including $60,000 of RRIF withdrawals; spouse B has $40,000.
- Before splitting, spouse A’s recovery tax: $3,981.90
- The most spouse A can allocate: $30,000
- If the couple elects to allocate $27,000, spouse A’s net income becomes $93,000, under the threshold, and spouse B’s becomes $67,000, also under it.
- Recovery tax after splitting: none for either spouse, a difference of $3,981.90 in OAS kept for the July 2026 to June 2027 period, before any change in regular income tax.
Because the test is individual, the household’s total income did not change at all. The CRA confirms that splitting affects benefits calculated on one person’s net income, naming the repayment of OAS. The full rules, including who counts as a transferring spouse, are in the guide to pension income splitting for couples.
Worked example: a one-time expense from a TFSA or a RRIF
A retiree with 2025 net income of $90,000 needs $10,000 for a roof.
- Taken as an extra RRIF withdrawal, net income rises to $100,000 and the recovery tax is $981.90, on top of regular income tax on the withdrawal.
- Taken from a TFSA, net income stays at $90,000 and the recovery tax is nothing.
That gap is the main reason TFSA savings come up in clawback planning. If you are comparing platforms for holding one, the Wealthsimple TFSA overview sets out its fees and account types. For planning RRIF draws themselves, see how RRIF withdrawals work and are taxed and the RRIF minimum withdrawal calculator; RRIF minimums are compulsory, so the flexible part is anything above them. The re-contribution timing rules are covered in TFSA withdrawal rules.
What if the recovery tax is wrong or your income has dropped?
Start with the paperwork. The advisory letter from Service Canada and box 22 of your T4A(OAS) slip show what was withheld; your notice of assessment shows what the CRA calculated. ESDC’s repayment page says Service Canada can be contacted to find out how much is being deducted or to request a larger deduction; its OAS line is 1-800-277-9914 (Canada and the U.S.), or check My Service Canada Account. If the repayment worked out on your return does not match your own estimate, that is a tax question for the CRA’s individual enquiries line, 1-800-959-8281.
- Income falling this year (you stopped working, or last year had a one-time capital gain): file Form T1213(OAS), Request to Reduce Old Age Security Recovery Tax at Source, in writing to the CRA so Service Canada can reduce withholding from July.
- Financial hardship from the deductions: ESDC says you can ask the CRA to review your situation.
- Too much withheld: the excess comes back when you file the next return, because withheld recovery tax is credited on line 43700.
What changes next?
ESDC’s table lists three income years: 2024, 2025 and 2026. The 2026 income-year figures ($95,323, $155,320 and $161,320) are final from October 2026; the footnote on ESDC’s table says the current year’s amounts are estimates from January to September, and the two full clawback figures were lower in the tables ESDC printed earlier in 2026. ESDC adds each new income year to the table as its figures are set, and OAS amounts are reviewed every quarter (January, April, July and October), which is why the full clawback levels move. This page is checked against the ESDC recovery tax page on a schedule and dated at the top.
Common mistakes with the OAS clawback
- Thinking the clawback uses household income. It is individual, which is exactly why splitting and choosing whose account to draw from matter.
- Mixing up the income year and the recovery period. Deductions you see in 2026 payments before July are still based on 2024 income; from July 2026 they are based on 2025 income.
- Assuming the whole pension disappears at the threshold. Only 15% of the excess is recovered; the whole pension is gone only at the higher age-group figures.
- Forgetting one-time income. A cottage sale, a large RRSP or RRIF withdrawal, or a severance payment can put one year over the line even when your normal income is well under it.
- Treating a TFSA and an RRSP as interchangeable in retirement. Both grow sheltered, but only TFSA withdrawals leave line 23400 alone.
- Ignoring the 75-and-over row. At 75 and over the full clawback level is higher, so a clawback that erased the pension at 74 can leave a partial pension at 75.
Related tools and guides
To see the clawback together with CPP timing, GIS and income tax on one screen, the OAS, CPP and GIS planner models it with your own numbers, and the retirement income optimizer compares withdrawal orders across RRIF, TFSA and non-registered money. If starting OAS later is on the table, the guide to deferring OAS to age 70 walks through the trade-off.