OAS Clawback 2024: What is & How to Avoid?

The Old Age Security (OAS) clawback is a recovery tax imposed on higher-income seniors who receive OAS benefits. If your income exceeds a certain threshold, a portion of your OAS benefits is recovered through this tax.

OAS Clawback Thresholds

The income threshold for the OAS clawback changes annually. For the 2024 tax year, the threshold is $90,997. If your net income exceeds this amount, you’ll be subject to the clawback.

Important to note:

  • The clawback is calculated as 15% of your income above the $90,997 threshold.
  • There is a maximum recovery amount, which means you won’t lose your entire OAS benefit, even if your income is significantly above the threshold.
OAS Clawback 2024: What is & How to Avoid?

What income is included in OAS clawback?

Income Included in the OAS Clawback

Any taxable income is considered when calculating the OAS clawback. This includes:

  • Employment income
  • Investment income (interest, dividends, capital gains)
  • Pension income (CPP, QPP, RRSP, RRIF, company pensions)
  • OAS itself (yes, OAS is included in the calculation)
  • Other taxable benefits

Essentially, any income that is reported on your tax return is included in the OAS clawback calculation.

Important Note: The clawback is based on your net income after deductions and credits. However, not all deductions and credits will reduce your income for clawback purposes.

How to Avoid or Minimize the OAS Clawback

While completely avoiding the OAS clawback might not be feasible for everyone, several strategies can help minimize its impact:

  • Income Splitting: If you’re married or in a common-law partnership, consider income splitting with your spouse to reduce your individual income and potentially stay below the clawback threshold.
  • Tax-Free Savings Accounts (TFSAs): Withdrawals from TFSAs are not considered taxable income, so using these funds can help manage your overall income.
  • Registered Retirement Income Funds (RRIFs): Carefully manage your RRIF withdrawals to avoid pushing your income above the clawback threshold.
  • Delaying OAS Benefits: If you can afford to, delaying the start of your OAS benefits until age 70 will increase your monthly payments, potentially offsetting the impact of the clawback.
  • Charitable Donations: While not directly avoiding the clawback, charitable donations can reduce your taxable income, potentially lowering your OAS recovery tax.

It’s important to note that financial planning is complex, and these strategies might not be suitable for everyone. Consulting with a tax professional can provide personalized advice based on your specific financial situation.


About Sophie Wilson 718 Articles
Sophie Wilson is a finance professional with a strong academic background, having studied at the University of Toronto. Her expertise in finance is complemented by a solid foundation in analytical and strategic thinking, making her a valuable asset in the financial sector.

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