# OAS Clawback 2026: Thresholds and How to Reduce It > How the OAS clawback (recovery tax) works in 2026: income thresholds, a worked example, when it's withheld, and moves that can keep more of your OAS. Source: https://trykosh.com/learn/oas-and-the-clawback Guide - Wealth and retirement # Old Age Security and the clawback, explained Old Age Security is paid to most Canadians from 65, but higher-income seniors repay some or all of it through the OAS recovery tax, usually called the clawback. Here's how much OAS pays, where the clawback starts and what you can do about it. Updated October 31, 20263 min readBy the Kosh team On this page[How much is OAS?](#amount)[What is the OAS clawback?](#clawback)[A worked example](#example)[How is the clawback collected?](#collected)[What counts as income for the clawback?](#income)[How can I reduce the OAS clawback?](#reduce)[FAQs](#faq) ## How much is OAS? For October to December 2026, the maximum OAS pension is **$762.50 a month** at ages 65 to 74 and **$838.75 a month** at 75 and over (the 10% increase at 75 is permanent). Amounts are reviewed every quarter for inflation. OAS doesn't depend on your work history. It depends on how long you've lived in Canada after age 18: 40 years for the full pension, and a partial pension if you've lived here at least 10 years. That matters for [newcomers](/learn/newcomers-to-canada-money-checklist) planning retirement. ## What is the OAS clawback? If your net world income is above a yearly threshold, you repay **15% of the amount above it**, up to your whole OAS pension. The thresholds: Income year Clawback starts above Repaid from payments 2025 $93,454 July 2026 to June 2027 2026 $95,323 July 2027 to June 2028 For 2025 income, OAS is fully clawed back at about $152,062 for ages 65 to 74 and $157,923 for 75 and over, according to Service Canada. ## A worked example Say your 2025 net income was $100,000. That's $6,546 over the $93,454 threshold, so the repayment is 15% of it: **$981.90**, deducted in instalments from your OAS payments from July 2026 to June 2027. If your 2026 income is $110,000, the repayment based on 2026 would be $2,201.55. ## How is the clawback collected? When you file your return, any recovery tax for that year is calculated and you pay it if it wasn't already withheld. Service Canada also withholds an amount from each monthly OAS payment for the following July-to-June period, based on your last return. If your income drops, the withholding adjusts after your next return is assessed. ## What counts as income for the clawback? It's based on net income (line 23400 of your return), which includes CPP, OAS itself, workplace pensions, RRSP and RRIF withdrawals, interest, the grossed-up amount of Canadian dividends, and the taxable half of capital gains. **TFSA withdrawals don't count**, which is why TFSA savings are useful for people who expect to be near the threshold. ## How can I reduce the OAS clawback? - **Use your TFSA.** Withdrawals are not income, so drawing on a TFSA instead of a RRIF in a given year keeps net income lower. - **Smooth RRSP and RRIF withdrawals.** Drawing some RRSP money in lower-income years before 65 or 71 can avoid large forced RRIF withdrawals later. - **Split pension income with a spouse.** Eligible pension income can be split on your returns, moving income from the higher earner to the lower one. - **Delay OAS.** You can defer OAS up to age 70 for 0.6% more per month (36% at 70). If you'll still be working at 65, deferring may avoid losing much of it to the clawback in those years. - **Time capital gains.** Spreading large gains over several years, or realizing them before 65, can keep you below the threshold in a given year. - **Watch dividends.** The gross-up on eligible Canadian dividends raises net income by more than the cash received. These choices interact with your tax brackets and other benefits, so model them together. The [retirement savings guide](/learn/how-much-to-save-for-retirement-canada) and [RRSP vs TFSA](/learn/rrsp-vs-tfsa) cover the bigger picture. [Free tool**Income tax calculator**Work out your 2026 federal and provincial income tax, CPP and EI, and what you keep, in any province or territory. Add self-employment income, capital gains and RRSP contributions to see how each one changes the bill.](/tools/income-tax-calculator) **Where Kosh fits** Kosh estimates your net income from your statements and slips, flags when RRIF withdrawals, gains or dividends would push you into the clawback zone, and shows the effect of drawing from your TFSA instead. It explains the trade-offs; the decisions and the withdrawals stay with you. ## Frequently asked questions What is the OAS clawback threshold for 2026? The OAS recovery tax threshold is $95,323 for 2026 income, which affects OAS payments from July 2027 to June 2028. For 2025 income the threshold is $93,454. How much OAS do you lose to the clawback? You repay 15% of your net world income above the threshold, up to your full OAS pension. For example, $100,000 of 2025 income means repaying $981.90 for the July 2026 to June 2027 period. Do TFSA withdrawals affect OAS? No. TFSA withdrawals are not included in net income, so they don't increase the OAS clawback or affect income-tested benefits. At what income is OAS fully clawed back? For 2025 income, Service Canada lists $152,062 for ages 65 to 74 and $157,923 for ages 75 and over. Can I delay OAS to avoid the clawback? You can defer OAS up to age 70, and your pension increases 0.6% for each month you delay, up to 36%. This can help if your income will be high in your late 60s and lower later. ## Sources - [Canada.ca: OAS payment amounts](https://www.canada.ca/en/services/benefits/publicpensions/old-age-security/payments.html) - [Canada.ca: OAS recovery tax](https://www.canada.ca/en/services/benefits/publicpensions/old-age-security/recovery-tax.html) - [Canada.ca: OAS, when to start](https://www.canada.ca/en/services/benefits/publicpensions/old-age-security/when-start.html) - [Canada.ca: OAS eligibility](https://www.canada.ca/en/services/benefits/publicpensions/old-age-security/eligibility.html) - [CRA: Indexation adjustments for 2026](https://www.canada.ca/en/revenue-agency/services/tax/individuals/frequently-asked-questions-individuals/adjustment-personal-income-tax-benefit-amounts.html) Written by the Kosh team and checked against the rules in force on October 31, 2026. This guide is general information, not tax, legal or investment advice. Kosh is an educational financial planning tool by Primedepth Labs. It is not registered with any Canadian securities regulator as an adviser or dealer, does not recommend specific securities, and does not hold your money or execute trades. Tax figures are estimates; confirm with the CRA or a qualified professional before acting. Investing carries risk. ## Upload your statement and Kosh does this for you. Kosh reads your bank, card and investment statements, estimates your federal and provincial tax and turns guides like this one into your own numbers and next steps. [Start free](/signup?via=learn-oas-and-the-clawback)