The OAS recovery tax, commonly called the OAS clawback, reduces Old Age Security payments when net world income on line 23400 of your T1 return passes a federally indexed threshold. The recovery rate is a flat 15% of the excess above the threshold, and the recovery tax is capped at the OAS amount you would otherwise receive. The threshold that applies depends on the income year you are filing, not the calendar year OAS is being paid.
The six dimensions you need to keep straight
Six figures drive every OAS clawback calculation. They are not interchangeable.
| Dimension | What it means | Current value |
|---|---|---|
| Income year | The tax year on the T1 return that CRA uses to assess the recovery tax | 2024, 2025, or 2026 |
| OAS benefit period | The July-to-June year during which OAS payments are adjusted, based on the prior year’s T1 | July 2025 to June 2028 |
| Minimum threshold | The income above which the 15% recovery tax begins, for a given income year | $90,997 (2024), $93,454 (2025), $95,323 (2026) |
| Full clawback ceiling, ages 65 to 74 | The income above which all OAS is eliminated for the 65 to 74 age band | $148,451 (2024), $152,062 (2025), $154,753 (2026, estimate) |
| Full clawback ceiling, age 75 and over | The income above which all OAS is eliminated for the age 75+ band, which is higher because of the 10% age 75 enhancement | $154,196 (2024), $157,923 (2025), $160,696 (2026, estimate) |
| Maximum monthly OAS (current quarter) | The maximum monthly pension Service Canada is paying right now | $743.05 (65 to 74), $817.36 (75 and over) for April to June 2026 |
OAS clawback thresholds by income year
The table below maps each income year to the OAS benefit period it controls and to the full clawback ceilings for each age band. Figures are from the Old Age Security pension recovery tax page on Canada.ca.
| Income year | Minimum threshold | Full clawback, 65 to 74 | Full clawback, 75+ | OAS benefit period affected |
|---|---|---|---|---|
| 2024 | $90,997 | $148,451 | $154,196 | July 2025 to June 2026 |
| 2025 (planning default) | $93,454 | $152,062 | $157,923 | July 2026 to June 2027 |
| 2026 | $95,323 | $154,753 (estimate) | $160,696 (estimate) | July 2027 to June 2028 |
The 2026 full clawback ceilings are estimates until October 2026, when Service Canada finalizes the maximum OAS pension amounts for the year. The minimum threshold ($95,323) is the indexed figure published in the Old Age Security Act and is final.
Maximum OAS amounts in 2026
Service Canada adjusts the maximum monthly OAS pension every January, April, July, and October based on changes in the Consumer Price Index. April to June 2026 is the current quarter.
| Quarter | Max monthly OAS, 65 to 74 | Max monthly OAS, 75+ | Max annual OAS, 65 to 74 | Max annual OAS, 75+ |
|---|---|---|---|---|
| January to March 2026 | $742.31 | $816.54 | $8,907.72 | $9,798.48 |
| April to June 2026 | $743.05 | $817.36 | $8,916.60 | $9,808.32 |
Annual figures above are the result of multiplying the quarterly maximum by 12 for illustration. Actual annual OAS in any given year is the sum of the four quarterly amounts (which can differ if the CPI adjustment moves between quarters) and is prorated if you receive OAS for fewer than 12 months. The 10% permanent OAS enhancement for recipients aged 75 and over has been in place since July 2022.
How the recovery tax is calculated
The recovery tax is 15% of the difference between net world income on line 23400 of your T1 and the minimum threshold for the income year you are filing. The amount is recorded as social benefits repayment on line 23500 and again at line 42200. The total annual recovery tax is collected through reduced monthly OAS payments during the next benefit period (July to June), unless you have already paid it through voluntary withholding.
Worked example for the 2025 income year
A retiree aged 68 files her 2025 T1 with $100,000 of net world income. The 2025 minimum threshold is $93,454. The recovery tax is:
15% × ($100,000 minus $93,454) = 15% × $6,546 = $981.90.
That amount is collected through reductions of about $81.83 per month from her OAS from July 2026 to June 2027. Her 2025 income of $100,000 is well below the 2025 income year full clawback ceiling of $152,062 (ages 65 to 74), so the recovery tax is not capped.
Recovery tax reference table for the 2025 income year
The table below uses the 2025 income year threshold of $93,454 and the April to June 2026 maximum OAS amounts ($8,916 annual for ages 65 to 74; $9,808 annual for ages 75 and over) to show how much OAS you would keep at each income level. The recovery tax applies to OAS paid from July 2026 to June 2027.
| 2025 net world income | Annual recovery tax (15%) | Annual OAS kept (65-74) | Annual OAS kept (75+) |
|---|---|---|---|
| $93,454 | $0 | $8,916 | $9,808 |
| $100,000 | $981.90 | $7,934.10 | $8,826.10 |
| $110,000 | $2,481.90 | $6,434.10 | $7,326.10 |
| $120,000 | $3,981.90 | $4,934.10 | $5,826.10 |
| $130,000 | $5,481.90 | $3,434.10 | $4,326.10 |
| $140,000 | $6,981.90 | $1,934.10 | $2,826.10 |
| $150,000 | $8,481.90 | $434.10 | $1,326.10 |
| $152,062 | $8,791.20 (capped) | $0 | $1,016.80 |
| $157,923 and above | capped at OAS received | $0 | $0 |
The recovery tax is capped at the OAS amount you would otherwise receive. Once your income reaches the full clawback ceiling for your age band, you owe 100% of OAS as recovery tax but no more.
Which income counts toward the clawback
The clawback test is applied to line 23400, net income before adjustments. It includes employment and self-employment income, CPP and QPP retirement benefits, employer pension and annuity income, RRSP, RRIF, and LIF withdrawals, rental income net of expenses, interest, taxable dividends at the grossed-up amount, the taxable portion of capital gains, and the OAS pension itself.
TFSA withdrawals, GIS payments, the non-taxable portion of capital gains, the proceeds of a fully exempt principal residence sale, and return of capital from non-registered investments are not in net world income and do not affect the clawback. The full breakdown by income type is in What income counts toward OAS clawback in Canada.
How CRA collects the recovery tax
After you file your T1, CRA calculates the social benefits repayment at line 23500 and Service Canada reduces your monthly OAS payments for the upcoming July to June benefit period by one twelfth of the annual amount. If your income in the current year is expected to be substantially lower than the prior year, you can ask CRA to reduce the monthly withholding using Form T1213(OAS), Request to Reduce Old Age Security Recovery Tax at Source. Approval is at CRA’s discretion and is reviewed annually. The final reconciliation happens when you file the matching year’s T1.
Strategies that reduce the clawback
The main levers retirees use to manage net world income for OAS purposes are pension income splitting, TFSA-first withdrawals in years where other income would otherwise push past the threshold, smoothing RRIF withdrawals across the years from 65 to 71, and timing the realization of capital gains across multiple years rather than a single spike. The mechanics of each are covered in OAS clawback in retirement: how to avoid the 15% recovery tax.
OAS clawback vs GIS
The OAS clawback and the Guaranteed Income Supplement (GIS) affect OAS from opposite ends of the income spectrum. The clawback reduces OAS for higher-income recipients (those with 2025 net world income above $93,454, or 2024 income above $90,997). GIS supplements OAS for low-income recipients. A retiree drawing large RRIF amounts may lose OAS to the clawback while a retiree with minimal other income gains GIS. Both programs are calculated from net world income, so most income-reduction strategies affect them in the same direction.
Source verification
Figures used on this page are from official Government of Canada sources:
- Threshold and full clawback ceiling figures: Old Age Security pension recovery tax (Canada.ca).
- Maximum monthly OAS amounts by quarter: Old Age Security payments (Canada.ca).
- Line 23400, line 23500, line 42200, and Form T1213(OAS) references: Canada Revenue Agency tax return guide (Canada.ca).
- The 10% age 75 OAS enhancement, in effect since July 2022, was enacted in Bill C-30, the Budget Implementation Act, 2021, No. 1.
Figures are current as of the April to June 2026 quarter and were verified against the live Canada.ca pages on 2026-05-19.