OAS Clawback: How It Works and 4 Ways to Keep More of Your Pension
Above $95,323 of net income (2026), you repay 15% of the excess from your OAS. A worked example and four legal ways to reduce it.
By the MoneyBackKit Canada team · Updated October 17, 2026 · 5 min read
You worked for your pension, and then part of your Old Age Security starts disappearing from each payment. That's the OAS recovery tax, usually called the clawback. It only affects higher incomes, and with a little planning you can often shrink it.
How it works
- For 2026 income, the threshold is $95,323 of net income.
- Above it, you repay 15% of the excess, up to your whole OAS.
- The amount is held back from your payments the following July to June.
| Net income | Clawback | OAS you keep |
|---|---|---|
| $95,323 | $0 | $8,800 |
| $105,323 | $1,500 | $7,300 |
| $120,323 | $3,750 | $5,050 |
| $135,323 | $6,000 | $2,800 |
| $155,323 | $8,800 | $0 |
An example
A retiree with net income of $115,000 (pension, RRIF, CPP and OAS) is $19,677 over the threshold. They repay $2,952 of an $8,800 OAS, about $246 held back each month.
How to reduce the clawback
- Split pension income with your spouse. Moving $10,000 of eligible pension income cuts the clawback to $1,452, saving $1,500 a year, on top of the income tax saved.
- Withdraw from your TFSA instead of your RRIF. TFSA withdrawals don't count as income.
- Spread withdrawals out. Taking more from your RRSP before 65 can avoid years of clawback later.
- Delay OAS to 70 if you're still working: each month you wait adds 0.6%.
Clawback on $115,000