If your net worldwide income exceeds a certain threshold, there may be an Old Age Security clawback on the payments you’ve received. For example, if your net worldwide income exceeds the threshold amount which for 2018 was $75,910 Canadian dollars, you’d have to repay part of your OAS pension back. If your income exceeds the maximum recovery threshold below, your whole pension is clawed back to zero. As of 2018, it was $123,386.
You must pay the claw back if
- your annual net worldwide income was more than $75,910 (for 2018, in Canadian dollars); and
- you live in a country where the non-resident tax on Canadian pensions is 25% or more.
Net Worldwide Income
Your net worldwide income is the total of all the income you have earned from both inside and outside Canada minus allowable deductions. You must include in the calculation the following types of income:
- pensions
- social security
- interest
- dividends
- rental property
- capital gains
- business
- employment
Old Age Security Clawback Rate
The clawback rate of 15% applies to the portion of net income, including OAS benefits, that exceed the OAS clawback threshold for the year. The repayment is based on the difference between net income and the threshold amount.
Example: The threshold for 2018 is $75,910.
If your income in 2018 was $86,000, then your repayment would be 15% of the difference between $86,000 and $75,910:
$86,000 – $75,910 = $10,090
$10,090 x 0.15 = $1,513.50
You would have to repay $1,513.50 for the July 2019 to June 2020 period. It is divided monthly, $126.12.
