Quick answer
For the 2026 income year, the OAS recovery tax (the “clawback”) starts when your net world income passes $95,323. Above that line, you repay 15 cents of OAS for every extra dollar of income, and the pension disappears entirely at $155,320 (ages 65–74) or $161,320 (75+). These 2026 figures set your OAS payments from July 2027 to June 2028 — so Q4 2026 is when the planning counts.
What the OAS recovery tax is
The Old Age Security pension is meant for lower- and middle-income seniors. If your income is high enough, the Canada Revenue Agency takes part of it back through the OAS recovery tax — most people call it the OAS clawback. It is not a separate bill you pay: the CRA simply reduces your monthly OAS cheques during the recovery period, based on the income you reported on your last tax return.
The official 2026 figures
These are the thresholds the CRA uses for the 2026 income year, which sets OAS payments from July 2027 to June 2028. Figures verified against the official canada.ca OAS recovery tax page on October 6, 2026.
| Income year | Clawback starts (minimum threshold) | OAS reduced to zero (ages 65–74) | OAS reduced to zero (75+) |
|---|---|---|---|
| 2026 | $95,323 | $155,320 | $161,320 |
| 2025 (for comparison) | $93,454 | $152,062 | $157,923 |
Note: the maximum thresholds are published as estimates from January to September and finalized in October. The repayment rate is 15% of net world income above the minimum threshold.
Worked example: the 15% math
Say your net income for 2026 is $100,000:
- $100,000 − $95,323 = $4,677 over the threshold
- $4,677 × 15% = $701.55 repaid
That $701.55 is recovered by reducing your monthly OAS payments across the July 2027–June 2028 recovery period — roughly $58 less per month.
Why it matters right now
The 2026 income year is being decided in Q4 2026. Anything that pushes up your net world income before December 31 counts toward the clawback: RRIF withdrawals, a one-time capital gain from selling property or investments, and even dividend gross-ups on eligible Canadian dividends. If you are hovering near $95,323, the last weeks of the year are your window to act — for example, by timing a withdrawal or realizing a loss to offset a gain.
How the CRA collects it
You don’t get a separate invoice. The CRA estimates your recovery tax from your filed return and reduces your monthly OAS payments during the recovery period (July 2027–June 2028 for the 2026 income year). The amount withheld shows up in box 22 of your T4A(OAS) slip, and the final reconciliation happens when you file that year’s return — on line 23500.
The escape hatch: Form T1213(OAS)
If your income in 2026 will be substantially lower than it was in 2025 — say you retired mid-year or had a one-time spike last year — you don’t have to wait for the CRA to catch up. You can ask the CRA to reduce the recovery tax withheld at source by filing Form T1213(OAS). Our sister site walks through the waiver process step by step: How to Request a Reduction of OAS Recovery Tax (Form T1213).
Frequently asked questions
Does the threshold use gross or net income?
Net world income — essentially line 23600 of your return, before the recovery-tax deduction itself. Deductions like RRSP contributions lower the number the CRA looks at.
Do capital gains count toward the threshold?
Yes. Only the taxable half of a capital gain is included in income, but that half counts in full toward the $95,323 line. A single large gain in 2026 can trigger the clawback for the July 2027–June 2028 period.
Is the clawback a separate bill I have to pay?
No. The CRA recovers it by shrinking your monthly OAS cheques during the recovery period. You see the withholding in box 22 of your T4A(OAS) slip.
What if my income drops after the CRA starts withholding?
File Form T1213(OAS) to ask the CRA to reduce withholding at source. The final amount is always reconciled on your tax return, so over-withholding gets refunded — but the waiver gets the money to you sooner.
Does the threshold change every year?
Yes. The minimum and maximum thresholds are indexed and updated annually. For 2025 the minimum was $93,454; for 2026 it is $95,323.
I’m 75 or older — is my threshold different?
The starting line ($95,323) is the same, but because the 75+ OAS pension is larger, it takes more income to wipe it out completely: $161,320 instead of $155,320.
Source: figures verified against the official canada.ca OAS pension recovery tax page on October 6, 2026.
Disclaimer: This article is general information only, not tax advice. Rules and figures can change — confirm your situation with the CRA or a qualified tax professional before making decisions.
