What is the OAS clawback threshold for 2026?

The OAS clawback begins when net income exceeds approximately $90,997 (2024 threshold, indexed). OAS is fully clawed back at income around $148,000+.

How is OAS clawback calculated?

You repay 15% of income above the threshold. For example, if income is $100,000 and threshold is $90,997, clawback is 15% x $9,003 = $1,350 annually.

Can I avoid OAS clawback?

Yes, strategies include income splitting with spouse, TFSA withdrawals (not counted), timing RRSP/RRIF withdrawals, and using corporate structures.

Do TFSA withdrawals count toward OAS clawback?

No. TFSA withdrawals do not count as income and do not trigger OAS clawback. This is one of the biggest advantages of the TFSA in retirement. Retirees who built a large TFSA can withdraw freely without affecting OAS, GIS, or any income-tested benefits. This is why an RRSP meltdown strategy (converting RRSP to TFSA in low-income years before 65) can save thousands.

What is the best RRSP meltdown strategy to avoid OAS clawback?

Between retirement and age 65 (before OAS starts), withdraw RRSP and convert to TFSA each year, staying in a low tax bracket. If you retire at 60, you have 5 years to draw down your RRSP. Converting $50K/year keeps your marginal rate around 20–25% — much lower than the effective 15%+ OAS recovery tax on top of your marginal rate after 65.

OAS Clawback 2026: Starts at ~$91K Income, 15% Recovery Rate — How to Avoid It

OAS Basics

What is OAS?

Feature	Details
Type	Monthly pension
Who	Age 65+
Based on	Years in Canada
Income-tested	High earners repay some/all

2026 OAS Amounts

Age	Monthly Maximum
65-74	~$727
75+	~$800 (10% more)

OAS Clawback Explained

Recovery Tax

Component	Details
Official name	OAS Recovery Tax
Threshold	~$90,997 (indexed)
Rate	15% of excess income
Full clawback	~$148,000 income

How It Works

Your Income	OAS Impact
Under ~$90,997	Keep full OAS
~$90,997-$148,000	Partial clawback
Over ~$148,000	OAS fully clawed back

Clawback Calculation

Formula

Clawback = (Net Income - Threshold) × 15%

Examples

Net Income	Above Threshold	Clawback	Monthly OAS Lost
$95,000	$4,003	$600	$50
$100,000	$9,003	$1,350	$113
$110,000	$19,003	$2,850	$238
$120,000	$29,003	$4,350	$363
$130,000	$39,003	$5,850	$488
$148,725	$57,728	$8,659	Full OAS

What Counts as Income

Included in Net Income

Income Type	Counts?
Employment income	Yes
Pension income	Yes
RRSP/RRIF withdrawals	Yes
CPP benefits	Yes
Investment income	Yes
Rental income	Yes
Capital gains	Yes (taxable portion)
Foreign pension	Yes

Not Included

Income Type	Counts?
TFSA withdrawals	No
OAS itself	No
GIS	No
Most tax credits	No

Strategies to Avoid Clawback

TFSA Strategy

Approach	Benefit
Use TFSA in retirement	Withdrawals don’t count
Build TFSA before 65	Tax-free income source

Example

Scenario	Net Income
$50K pension + $30K RRIF	$80K (no clawback)
$50K pension + $30K TFSA	$50K (no clawback)
Same cash, different tax	TFSA wins

Income Splitting with Spouse

Method	Benefit
Pension splitting	Up to 50%
Lower spouse income	Keep their OAS
Combined benefit	Both get OAS

Pension Splitting Example

Without Splitting	With Splitting
You: $120K	You: $85K
Spouse: $30K	Spouse: $65K
Clawback: $4,350	Clawback: $0

RRSP Timing

Strategy	Details
Draw down RRSP early	Before age 65
Convert to RRIF early	Spread withdrawals
Reduce RRIF by 65	Lower OAS income

Corporate Structures

If Self-Employed	Consider
Keep money in corp	Draw salary slowly
Defer dividends	Until need them
Capital dividends	Tax-free

GIS and Clawback

Guaranteed Income Supplement

Feature	Details
For	Low-income seniors
Clawback starts	Much lower (~$21,624)
More aggressive	50-75% reduction

GIS vs OAS Clawback

Program	Threshold	Rate
OAS	~$90,997	15%
GIS	~$21,624	50-75%

Tax Planning Timeline

Age 55-60

Action	Reason
Assess RRSP size	Will it cause clawback?
Build TFSA	Tax-free in retirement
Consider early RRSP	Draw before OAS

Age 60-65

Action	Reason
Meltdown RRSP	If large balance
Maximize TFSA	From RRSP withdrawals
Plan pension start	Coordinate with OAS

Age 65+

Action	Reason
Pension splitting	If applicable
TFSA withdrawals	For spending
Monitor income	Stay below threshold

Deferring OAS

Can Defer to Age 70

Deferral	Increase
Each month	0.6% more
Each year	7.2% more
To age 70	36% more total

When Deferral Makes Sense

Situation	Consider Deferring
High income until 70	Yes
Clawback anyway	Maybe defer
Need money at 65	Don’t defer
Good health	Defer

With Clawback

If Income $120K at 65	Analysis
OAS clawed back anyway	$4,350/year
Defer to 70	Higher OAS later
Lower income at 70	Keep more OAS

Provincial Differences

Quebec Residents

Feature	Details
Same OAS	Federal program
QPP instead of CPP	Similar rules
Provincial benefits	Additional for low income

Calculating Your Situation

Estimate Your Clawback

Step	Action
1	Estimate retirement income
2	Subtract threshold
3	Multiply by 15%
4	Compare to OAS amount

Example Retirement Budget

Income Source	Annual
Company pension	$50,000
CPP	$15,000
RRIF	$35,000
Total	$100,000
Above threshold	$9,003
Clawback	$1,350
OAS received	~$7,370

Professional Advice

When to Get Help

Situation	Action
Large RRSP	Tax planning essential
Corporation	Complex planning
Multiple income sources	Optimization opportunity
Spouse income differs	Splitting strategies