Fwd: OAS Clawback 2025....
Moyez Kamani
If you’ve worked hard to build your retirement income, the last thing you want is to see your government benefits clawed back. Yet for many Canadians, the Old Age Security (OAS) recovery tax—commonly called the OAS clawback—can quietly reduce this valuable benefit.
Here’s how the recovery tax works in 2025, what happens if you delay OAS to age 70, and the strategies we use to help our clients minimize or avoid the clawback.
What is the OAS Recovery Tax?
OAS is a monthly benefit available to most Canadians aged 65 and older. However, once your income exceeds a certain level, the government recovers part or all of your OAS through the recovery tax.
This is calculated based on Line 23400 of your tax return—net income before adjustments. In 2025, the clawback begins when your income exceeds $93,454. For every dollar above that amount, you must repay 15 cents of your OAS.
If your income reaches approximately $151,668 (age 65–74) or $157,490 (age 75+), you could lose your entire OAS benefit for the year.
How Much is the OAS Benefit in 2025?
From July through September 2025, the maximum monthly OAS payment is:
$734.95 for individuals aged 65–74 (about $8,820 annually)
$808.45 for individuals aged 75+ (reflecting a 10% enhancement introduced in 2022)
These amounts are indexed quarterly to inflation and are subject to clawback if your Line 23400 income exceeds the threshold.
What Happens if You Delay OAS Until 70?
You can choose to delay receiving OAS up to age 70, increasing your monthly benefit by 0.6% for each month deferred—a total boost of up to 36% if you wait the full five years.
While a higher payment may sound appealing, it can also lead to larger OAS repayments if your income—including CPP, investment returns, or pension income—exceeds the recovery threshold. Delaying OAS often makes sense for healthy individuals who expect to live into their late 80s or beyond and have lower taxable income during the deferral period.
How the OAS Recovery Tax Works
Example: Alan is 68 and receives the maximum OAS: $8,820 annually. In 2025, the clawback threshold begins at $93,454. Alan’s line 23400 income is $100,000—that’s $6,546 over the clawback threshold. As a result, he must repay: $6,546 × 15% = $981.90
This leaves Alan with $7,838.10 in OAS benefits for the year. If he earns more, the repayment increases proportionally. Once Alan’s income reaches around $151,668 (if aged 65–74) or $157,490 (if aged 75+), his entire OAS would be clawed back.
The recovery tax calculation is automatic and appears on your Notice of Assessment each spring, adjusting your OAS payments for the following July–June period.
From: Guli Mawji <gul...@gmail.com>
Date: Fri, Feb 27, 2026 at 2:20 PM
Subject: OAS Clawback 2025....
To: Farida Janmohamed <fari...@hotmail.com>, Moyez Kamani <moyez....@gmail.com>, Abdulsultan Madhani <abdulsult...@gmail.com>