OAS Clawback 2026: The $93,454 Threshold, Explained
If your 2025 net income topped $93,454, Ottawa takes back part of your Old Age Security — 15 cents for every dollar over the line. The official name is the OAS recovery tax, and the deductions are already being taken from monthly payments for the July 2026 to June 2027 period. Here is exactly how it is calculated, the income levels where OAS disappears entirely, and five legal ways to keep more of your pension.
How we check the numbers: every figure on this page is calculated from official CRA, Statistics Canada or Bank of Canada data and cross-checked with the free calculators on this site — run them yourself to verify.
The short version
The test is your 2025 net world income — line 23400 of your tax return. Service Canada spreads the repayment across your 12 monthly OAS payments from July 2026 to June 2027. The threshold is per person, not per household: each spouse gets their own $93,454.
How the 15% recovery tax is calculated
One formula, computed automatically from your tax return:
Repayment = 15% × (net world income − $93,454), capped at the total OAS you received.
A third example: at $120,000 of 2025 income, you are $26,546 over the line, so the recovery is $3,981.90 for the year — about $331.83 a month off your OAS payments. The amount appears on your Notice of Assessment each spring, and the monthly deductions adjust automatically the following July.
Which income counts — and the timing trap
Three things people get wrong:
- It is net world income, line 23400 — employment income, CPP, RRSP/RRIF withdrawals, rental income, capital gains, and the OAS pension itself all count.
- TFSA withdrawals do not count. Money you pull from a TFSA never shows up on line 23400, which is exactly why the TFSA is the best account for staying under the threshold.
- The timing lags by a year. Your 2025 return sets the deductions for July 2026 to June 2027. One big RRSP withdrawal or capital gain in a single year triggers a clawback that arrives 12 months later — and it is never permanent.
Service Canada sends you a letter before July 1 if recovery-tax deductions will be withheld. The estimate is then reconciled when you file — so a big income swing can mean money owed back, or money returned to you.
When OAS disappears entirely
Because the clawback runs at 15 cents per dollar, OAS shrinks gradually until it hits zero. For the July 2026 to June 2027 period, the published full-clawback points are $152,062 of 2025 income for ages 65–74 and $157,923 for ages 75 and over. The 75+ number is higher because of the permanent 10% OAS top-up for seniors 75 and over.
One caveat worth knowing: the official Canada.ca table lists slightly lower provisional figures ($151,668 / $157,490) marked "not final" pending the last quarterly OAS adjustments of 2025. The $152,062 / $157,923 figures above are the published final values, computed from the actual 2025 quarterly maximums.
Five legal ways to keep more of your OAS
- Contribute to your RRSP while you still can. Every dollar of RRSP contribution lowers line 23400 by a dollar. A $5,000 contribution saves $750 in recovery tax (15% × $5,000) — on top of the income-tax deduction itself. You can contribute until the year you turn 71.
- Spend from the TFSA first. Funding a year of living expenses from TFSA withdrawals instead of RRSP or RRIF withdrawals can keep your net income under $93,454 without changing your actual spending at all.
- Defer OAS to 70 if you are still earning. Each month of delay adds 0.6% to your pension — up to 36% at age 70. If your income from 65 to 69 would trigger the clawback anyway, deferring dodges the clawback years entirely and grows the pension you eventually receive.
- Split pension income with your spouse. At 65+, you can split up to 50% of eligible pension income with a lower-income spouse. Because the $93,454 threshold is per person, shifting income can keep both of you under the line.
- Smooth one-off income across years. A single large RRIF withdrawal, property sale or capital gain in one year claws back that year's OAS. Spreading the income over two or three years often costs nothing extra in tax — and protects the pension.
Looking ahead: the 2026 income-year threshold
The threshold rises with inflation. For income earned in 2026 — which sets OAS deductions for July 2027 to June 2028 — the clawback starts at $95,323. If you are managing 2026 income right now, that is the number to stay under.
Frequently asked questions
Is the $93,454 OAS clawback threshold per person or per household?
Per person. The recovery tax is calculated on your individual net world income — line 23400 of your tax return. A couple can each earn up to $93,454 of 2025 income with no clawback at all, even if their combined income is far above it.
Does the OAS pension itself count toward the clawback income test?
Yes. Line 23400 includes the OAS pension itself, which means at certain income levels the pension partly triggers its own recovery.
If my OAS is clawed back this year, is it gone forever?
No. The recovery tax is recalculated every year from your latest tax return. If your income falls back below the threshold, your full OAS pension returns for the next July-to-June period.
Do TFSA withdrawals trigger the OAS clawback?
No. TFSA withdrawals are not included in net income for OAS recovery-tax purposes, which makes the TFSA one of the best tools for keeping retirement income below the threshold.
Why did my OAS payment drop in July?
The recovery period runs July to June and is based on your previous year's tax return. Service Canada reduces your monthly OAS payments in advance for the July-to-June period, then everything is reconciled when you file your return.
Can I ask for a review if the recovery-tax deductions cause financial hardship?
Yes. If the monthly recovery-tax deductions cause financial hardship, you can ask the Canada Revenue Agency to review your situation.
Sources
- Canada.ca — Old Age Security pension recovery tax (official thresholds: $93,454 for the July 2026–June 2027 period, 15% rate, hardship review)
- Canada.ca — Old Age Security: how much you could receive (quarterly indexation, deferral to 70, partial pensions)
- Qtrade — How much will your OAS payments be? (full-clawback points $152,062 / $157,923, deferral rules, 2026 payment dates)
- Immigration News Canada — Service Canada benefit payments in October 2026 (ESDC rate card: max OAS $762.50 at 65–74, $838.75 at 75+; 2026 threshold $95,323)
Planning your retirement income?
Start with CPP and OAS in 2026: how much will you actually get? — then read pension income splitting with a spouse to see how a $90k/$30k couple can keep both partners under the clawback line.
Educational content only — not financial advice. Figures are estimates; confirm your own situation with the CRA or a licensed financial advisor. See our Disclaimer.