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What is OAS claw back?

Ask the professionals – October 2016

Written by Dave Lee
October 12, 2016

Those who receive the Old Age Security (OAS) pension must repay part or all of their entitlement if their income exceeds a certain threshold.  For 2016 this threshold is $73,756. Those who receive the Old Age Security (OAS) pension must repay part or all of their entitlement if their income exceeds a certain threshold.  For 2016 this threshold is $73,756.

You must repay $0.15 for every dollar you earn above the threshold, and those with incomes above $119,512 will have to repay 100% of their OAS.

Avoiding OAS claw back can involve strategic planning that spans several years.  Depending on your income level, it may be fruitful to consider any of the following:

  • The timing and amount of RRIF withdrawals
  • The timing of triggering unrealized capital gains
  • The pace at which you take income from your corporation
  • Income splitting with your spouse and other family members
  • Whether to defer taking OAS

An effective financial plan will seek to maximize the government benefits that you receive (and get to keep).