The OAS clawback is Canada's way of recovering OAS payments from high-income seniors. The critical thing most Canadians abroad don't realise: it applies to your worldwide income — not just what comes from Canada. Here's exactly how it works and how to manage it.
The OAS clawback — officially called the Old Age Security Recovery Tax — reduces your OAS benefit when your net income exceeds a threshold set by the CRA each year. For every dollar of net income above the threshold, 15 cents of OAS is clawed back. At a certain point, OAS is fully clawed back and you receive nothing.
💡 The clawback is applied against the next year's OAS payments. It's not deducted from current payments in real time. Service Canada estimates your clawback based on your prior year's income tax return and reduces your OAS payments in the following July–June period accordingly. If your income was unusually high one year (say, from a large RRIF withdrawal), your OAS will be reduced the following year — but will recover the year after if income drops back below the threshold.
This is the most important and most commonly misunderstood aspect of the OAS clawback for non-resident Canadians. The clawback applies to your net world income — the total of all income from all countries, not just Canadian-source income.
If you retire to Portugal and receive CPP, OAS, and RRIF payments from Canada plus investment returns from Portuguese accounts or a part-time consulting income in Portugal, all of that counts toward the clawback threshold. Canada doesn't care that the Portuguese income wasn't earned in Canada — for OAS clawback purposes, world income is world income.
For most retirees abroad living on a modest Canadian pension and low-cost lifestyle, the clawback is irrelevant — their total world income comfortably stays below $93,454. But for those with significant RRIF drawdowns, investment portfolios, rental income, or other sources, it's a real planning consideration.
⚠️ Large RRIF withdrawals are the main clawback trigger for Canadians abroad. If you draw $50,000+ from your RRIF in a year on top of CPP and OAS, your total world income can easily approach the $93,454 threshold. Planning RRIF withdrawals across multiple years — rather than taking large lump sums — is one of the most effective ways to manage clawback risk. This is exactly the kind of multi-year income planning a cross-border CPA helps with.
Non-resident OAS recipients are generally required to file the Old Age Security Return of Income (OASRI) each year — a simple document reporting your net world income to Service Canada so they can calculate any clawback. It's due by April 30 of the following year.
💡 Treaty country exemption: If you live in a country with a comprehensive tax treaty with Canada that covers OAS, Service Canada may exempt you from filing the OASRI annually — because your income is already reported through your local tax authority under the treaty's information exchange provisions. Call Service Canada International at 1-800-277-9914 to confirm whether your country qualifies for this exemption.
The OAS clawback is not something we personally worry about — our combined world income stays well below the $93,454 threshold. CPP, OAS, and a modest RRIF drawdown, with our Malaysia lifestyle costs, means we're comfortably below the threshold every year. But we know couples who retired abroad with significant RRIF balances and didn't think about the clawback until mandatory minimum withdrawals started pushing them toward it.
The planning insight: if you have a large RRIF going into retirement, the mandatory withdrawal percentages increase with age (from 4% at 65 to nearly 12% at 90). At some point the mandatory withdrawals alone approach or exceed the clawback threshold. Modelling this out 20 years with a CPA — not just for the first year — is the smart move.
OAS figures and full details
Maximum amounts, average amounts, deferral impact, and what couples receive combined — all the 2026 numbers.
Read the Guide →Sources & Disclaimer: This article is for informational purposes only and does not constitute financial or tax advice. OAS clawback threshold ($93,454) and full clawback amount ($152,062 ages 65–74) from Service Canada July 2026–June 2027 announcement based on 2025 tax year income. OASRI filing requirements from Service Canada International. Tax rules change — always verify current thresholds at canada.ca/en/services/benefits/publicpensions/cpp/old-age-security and consult a cross-border CPA for your specific situation.