What is the OAS clawback?
The OAS recovery tax (commonly called the "OAS clawback") requires retirees with net world income above a federal threshold to repay part or all of their Old Age Security pension. The repayment is 15% of net income above the minimum income recovery threshold ($95,323 for 2026), capped at the total annual OAS received. At a high enough income, OAS is fully clawed back.
The clawback amount is also deductible from net income for regular tax purposes (line 23500 on the T1 return).
References (Government of Canada):
Why add it to the simulator?
OAS is now modelled (#40), but at high incomes the simulator currently assumes the user keeps the full OAS payment regardless of income level. In reality, high-income retirees lose part or all of their OAS to the recovery tax. Two specific scenarios where this matters:
- High desired spending: A retiree drawing $80K+/year from RRSP plus CPP plus OAS can easily push gross income above the threshold, triggering clawback.
- Late-life mandatory RRIF withdrawals: From age 71 onward, RRIF mandatory percentages climb (reaching 20% at age 95). A retiree with a still-large RRSP balance can be forced into clawback territory by the mandatory minimum alone, even with modest desired spending.
Without clawback modelling, the simulator overstates after-tax income for these users and underestimates the appeal of strategies that flatten lifetime income (e.g., starting RRSP drawdown earlier to reduce later RRIF balances). It also misrepresents the true value of deferring OAS to age 70 — the larger payment is more exposed to clawback.
What this involves
- Recognise the clawback wherever taxable income is summed and converted to after-tax income
- Reflect the clawback's deductibility from regular taxable income
- Surface the clawback amount in the simulator's output so users can see when and how much OAS is being lost
- Update the relevant insights documents if the new numbers shift any of the existing analyses
The configuration values (threshold, rate) are already present in config/oas.yml and accessible via OasConfig — they were added during the original OAS work in anticipation of this feature. The "OAS clawback" item should be removed from the roadmap once this is implemented.
A research and design document is in scratch/oas-clawback/ in the repository.
What is the OAS clawback?
The OAS recovery tax (commonly called the "OAS clawback") requires retirees with net world income above a federal threshold to repay part or all of their Old Age Security pension. The repayment is 15% of net income above the minimum income recovery threshold ($95,323 for 2026), capped at the total annual OAS received. At a high enough income, OAS is fully clawed back.
The clawback amount is also deductible from net income for regular tax purposes (line 23500 on the T1 return).
References (Government of Canada):
Why add it to the simulator?
OAS is now modelled (#40), but at high incomes the simulator currently assumes the user keeps the full OAS payment regardless of income level. In reality, high-income retirees lose part or all of their OAS to the recovery tax. Two specific scenarios where this matters:
Without clawback modelling, the simulator overstates after-tax income for these users and underestimates the appeal of strategies that flatten lifetime income (e.g., starting RRSP drawdown earlier to reduce later RRIF balances). It also misrepresents the true value of deferring OAS to age 70 — the larger payment is more exposed to clawback.
What this involves
The configuration values (threshold, rate) are already present in
config/oas.ymland accessible viaOasConfig— they were added during the original OAS work in anticipation of this feature. The "OAS clawback" item should be removed from the roadmap once this is implemented.A research and design document is in
scratch/oas-clawback/in the repository.