Can you work while receiving OAS in Canada?

Yes, with no restrictions. Unlike EI or CPP Disability, Old Age Security (OAS) has no earnings cap or "available for work" requirement. You can be fully employed, self-employed, or run a business while receiving OAS, and your monthly pension is not directly reduced because of your employment income. The only income-related OAS concern is the OAS recovery tax (also called the clawback): if your net income exceeds approximately $90,997 (2025), you must repay a portion of your OAS at 15 cents for every dollar of net income above that threshold. At approximately $148,065 in net income, OAS is fully clawed back. Employment income is counted in net income, so high earners who work while receiving OAS may trigger the clawback.

What is the OAS clawback threshold for 2026?

The OAS recovery tax threshold for the July 2025 to June 2026 period is approximately $93,454 net income (adjusted annually by CPI). The threshold is published by CRA each year and applies to net income from your T1 return for the prior year. For every dollar of net income above the threshold, 15 cents of OAS is recovered. For example: if your net income is $100,000 and the threshold is $93,454, the excess is $6,546. Clawback = $6,546 × 15% = $982/year — the equivalent of approximately $81.83/month off your OAS. Full OAS clawback (total repayment) occurs at approximately $151,668 in net income (2025–26). These figures change annually; verify at CRA.gc.ca.

How does the OAS clawback work in practice?

The OAS recovery tax is collected in two ways: First, at tax filing time — you repay the prior year''s excess OAS via Schedule 1 of your T1 return (the repayment is calculated on Line 23500 and Line 42200). Second, going forward — once CRA calculates that you will likely be subject to clawback, they reduce your monthly OAS payments in advance using your previous year''s income. This means if your prior year income triggered clawback, your OAS cheque for the next July-June period is already reduced. If your income changes significantly (e.g., you stop working), you can request reduced or stopped OAS clawback withholding in advance by contacting Service Canada.

Does working at age 65 make sense if OAS is clawed back?

Working while receiving OAS is always rational up to the clawback threshold — there is no reason to reduce work to keep income below a magic OAS-preservation number unless the math specifically favours it. Once in the clawback zone ($93,454+): for every $100 earned above threshold, you net $85 after clawback ($100 earned – $15 OAS clawback = $85 net benefit of the last dollar earned). You also pay income tax on the $100 earned — so in the 33.5% marginal bracket, you pay $33.50 in tax plus $15 OAS clawback = $48.50 gone, keeping $51.50. This is not a reason to stop working; your net income still increases. Strategically: reduce income from capital gains or RRIF withdrawals rather than earned income to stay below the OAS threshold.

Should you defer OAS if you are still working at 65?

Possibly, yes. OAS can be deferred from age 65 to age 70, with a 0.6% permanent increase in monthly payment for each month deferred (7.2% per year; up to 36% increase by age 70). If you are still working at 65 and earning above the OAS clawback threshold, you may receive $0 effective OAS anyway (it would all be recovered). In that case, deferring OAS: eliminates the administrative clawback paperwork; lets the benefit grow; results in higher OAS from age 70 onward when income may be lower. The break-even point for OAS deferral is approximately age 81–83 depending on your deferral length. If you expect to live past 82, deferring from 65 to 70 is generally beneficial — especially if your current income triggers the full clawback anyway.

Is the GIS affected by employment income?

Yes — the Guaranteed Income Supplement (GIS) is a means-tested benefit for low-income OAS recipients, and it is heavily affected by income including employment income. The GIS uses a different income threshold than OAS (roughly $21,624/year for a single person in 2025 to receive maximum GIS). Employment income is counted in the GIS income test after a $5,000 earned income exemption — so the first $5,000 in employment income does not reduce GIS. Above $5,000 of earned income: GIS is reduced by 50 cents for every dollar earned. If you work part-time while receiving GIS, report your income changes to Service Canada annually via your tax return — GIS is recalculated each July based on your prior year''s T1 income.

Can you suspend OAS and restart it at a higher rate?

Yes. If you are already receiving OAS and want to defer to increase the amount, you can voluntarily defer your OAS benefits after starting them — but only within the first 6 months of receiving OAS. If you notify Service Canada within 6 months of starting OAS that you want to defer, you can cancel the payments, repay the amounts received, and restart at a higher rate later. After 6 months, you cannot suspend and restart — the rate is locked. This is called the "OAS cancellation" option and is useful for people who started receiving OAS and then discovered their income will push them into full clawback territory for several years.

Can You Work While Getting OAS? Earnings, Clawback, and How OAS Is Affected

OAS is one of the few Canadian government benefits with no employment earnings limit. Work as much as you like — but understand how the OAS recovery tax (clawback) could affect high earners.

OAS at a glance

Feature	Detail
Eligibility	Canadian citizen/resident, age 65+, 10+ years in Canada after age 18
Maximum monthly OAS (Q1 2026)	~$727.67 for recipients aged 65–74; ~$800.44 aged 75+ (indexed quarterly)
Employment earnings limit	None — no restriction on work
Clawback threshold (2025)	~$90,997 net income (Line 23600)
Clawback rate	15% for each $1 above threshold
Full clawback at	~$148,065 net income (all OAS recovered)
Deferral option	Age 65–70; +0.6%/month deferred

Employment income and OAS: the direct relationship

OAS is not reduced because you’re working. There is no “working while on OAS” program with dollar-for-dollar or 50-cent reductions like EI. Work freely.

What employment income does:

Increases your net income (Line 23600)
If net income exceeds the clawback threshold → triggers the recovery tax
Higher employment income = higher net income = potentially more OAS recovered

The OAS recovery tax (clawback)

How it’s calculated

For the July 2025 – June 2026 period:

Threshold: approximately $90,997 (verify at canada.ca/en/revenue-agency)
Rate: 15% of net income above the threshold
Maximum OAS recoverable: 100% of your OAS received in the year

Example calculation:

Net income	Above threshold	OAS clawback	Annual OAS ~$8,700	Net OAS received
$80,000	$0	$0	$8,700	$8,700
$100,000	$9,003	$1,350	$8,700	$7,350
$120,000	$29,003	$4,350	$8,700	$4,350
$148,065	$57,068	$8,560	$8,700	$140
$150,000+	Full amount	Full OAS	$8,700	~$0

Income sources that count toward the clawback threshold

All of these are included in net income (Line 23600):

Income type	Included in threshold?
Employment income (T4)	Yes
Self-employment income	Yes
RRSP withdrawals	Yes
RRIF withdrawals (mandatory and voluntary)	Yes
CPP pension	Yes
Other pension income (DB pension, insurer annuity)	Yes
Rental income (net)	Yes
Capital gains (50% taxable inclusion)	Yes
Eligible dividends (grossed-up amount)	Yes — the grossed-up dividend counts, not just the cash amount
OAS itself	Yes — the OAS you receive is included in your own net income
TFSA withdrawals	No — TFSA is not included in net income
GIS	No — not included in taxable income

Important note on eligible dividends: Eligible dividends are grossed-up by 38% before being included in income. A $30,000 dividend becomes $41,400 in the income calculation — this can push people over the OAS threshold unexpectedly.

Strategies to reduce the OAS clawback

If your income is near the threshold, you can reduce net income toward or below $90,997:

1. TFSA withdrawals instead of RRSP/RRIF

TFSA withdrawals do not increase net income. If you need $15,000 for expenses, withdrawing from TFSA has zero clawback effect vs. withdrawing from an RRIF which adds $15,000 to net income.

2. Pension income splitting

If you have a spousal pension (DB pension, RRIF, eligible pension income), you can split up to 50% of qualifying pension income to a lower-income spouse. This reduces your net income and potentially keeps you below the OAS threshold.

3. Defer capital gains realizations

If you can control when you sell investments, avoid realizing large capital gains in a year when OAS clawback would apply. Spread dispositions over multiple years.

4. Accelerate RRSP withdrawals before 65

Withdrawing from RRSPs at age 60–64 (before OAS begins) at a lower marginal rate avoids stacking RRIF mandatory minimums on top of OAS in later years.

5. Charitable donation

A large charitable gift can reduce net income through the donation tax credit — though the donation itself is a non-refundable credit rather than an income deduction, it reduces tax (and via specific income splitting strategies, can reduce net income indirectly).

Deferring OAS when working full-time

If you are still working full-time at 65 and your income will exceed the OAS clawback threshold for 5+ more years, consider deferring OAS:

Defer from	Defer to	Monthly increase	Annual additional
65	66	+7.2%	~$629/year more (based on $727/month)
65	70	+36%	~$262/month more = ~$3,144/year more

Break-even analysis: Taking OAS at 65 vs. 70 — the break-even occurs at approximately age 81–83.

If you live past 82 and retire at 70, the deferred amount pays off. If your health is uncertain or you expect a shorter-than-average lifespan, taking OAS at 65 may be preferable.

GIS interaction: low-income earners who work while on OAS

The Guaranteed Income Supplement (GIS) is income-tested and may be affected differently by employment income. Under GIS rules, the first $5,000 of annual employment or self-employment income is excluded from the GIS income calculation. For income between $5,000 and $15,000, only 50% is counted. This means low-income OAS recipients who do some part-time work keep more GIS than under the old full-inclusion rules.

Employment income	GIS inclusion	Effect on GIS
First $5,000	$0	None
$5,001–$15,000	50% of excess over $5,000	Partial reduction
Over $15,000	100%	Dollar-for-dollar reduction

If you receive both OAS and GIS and are considering part-time work, the GIS earnings exemption means modest work has little impact on your total income.