OAS: Old Age Security and the Clawback Explained
Old Age Security (OAS) is a monthly pension paid to most Canadians aged 65 and older, funded from general government revenue. Unlike CPP, it is based on how long you have lived in Canada as an adult, not on employment contributions — you can receive it even if you never worked.
2 min read · Updated June 2026
Eligibility is residency-based: you generally qualify for a full OAS pension if you lived in Canada for at least 40 years after age 18, and a partial pension (1/40th per year of residency) with at least 10 years. The benefit is indexed to inflation quarterly. As of early 2025 the maximum was roughly $727/month for those aged 65-74 and about $800/month for those 75+, who receive a 10% top-up.
OAS is subject to a recovery tax — the 'clawback' — that catches higher-income retirees. Once your net world income exceeds the annual threshold (about $90,997 for 2024), you repay 15 cents of OAS for every dollar above it, until OAS is fully clawed back at an upper income limit. Managing the clawback is a core reason Canadians prefer the TFSA in retirement: TFSA withdrawals don't count as income, so they don't trigger the clawback the way RRSP/RRIF withdrawals do.
Like CPP, OAS can be deferred. Starting at 65 is standard, but each month you delay (up to age 70) increases the benefit by 0.6%, for a maximum 36% boost at 70. There is no benefit to delaying past 70. Deferral makes sense if you have other income in your late 60s and expect a long life, or if delaying keeps your income under the clawback threshold in those years.
The Guaranteed Income Supplement (GIS) is a non-taxable top-up to OAS for low-income seniors. It is income-tested and phases out as other income rises. A retiree drawing mostly from a TFSA can keep taxable income low enough to preserve GIS — another argument for prioritising TFSA contributions during working years if a modest retirement income is expected.
For planning, treat OAS + CPP as your guaranteed inflation-indexed base. Estimate both, subtract from your target retirement spending, and the remainder is what your RRSP, TFSA, FHSA, and non-registered investments must cover. Structuring withdrawals to stay under the OAS clawback threshold can be worth thousands per year for households near the line.
Richify projects your retirement income across CPP, OAS, and your private accounts — and flags when an RRSP/RRIF withdrawal would push you over the OAS clawback threshold so you can draw from your TFSA instead.
