---
title: "The OAS Clawback in 2026: How Alberta Retirees Can Keep More of Their Pension"
description: Learn how the 2026 OAS clawback works in Alberta, what income counts, and practical ways to plan RRIF and RRSP withdrawals to keep more of your pension.
---

[JK Asset Management Blog](https://www.jkassetmanagement.ca/jk-asset-management-blog)

# [The OAS Clawback in 2026: How Alberta Retirees Can Keep More of Their Pension](https://www.jkassetmanagement.ca/jk-asset-management-blog/the-oas-clawback-in-2026-how-alberta-retirees-can-keep-more-of-their-pension)

 Written by [Joseph Kapler](https://www.jkassetmanagement.ca/jk-asset-management-blog/author/joseph-kapler) | Oct 1, 2026, 3:09:30 AM

You worked for decades, built a life, and contributed to Canada’s public pension system. Then one  
day, you notice your Old Age Security payment is smaller than expected.

What happened?

You may have been affected by the OAS clawback, officially called the Old Age Security recovery  
tax. Many Alberta retirees are surprised by it because it can affect ordinary households, not only people  
who consider themselves wealthy.

If you are approaching retirement, receiving a pension, working part-time, or drawing from an RRSP  
or RRIF, it is worth understanding how this works.

The goal is not alarm. It is clarity.

| Important 2026 timing: The approximately $95,323 threshold applies to 2026 net world income and generally affects OAS payments from July 2027 to June 2028. OAS payments from July 2026 to June 2027 are based on 2025 income, with a threshold of $93,454. |
| --- |

 

What Is the OAS Clawback?  
The OAS clawback is a repayment of part or all of your Old Age Security pension when your annual **net** world income rises above a government-set threshold.

In plain English, if your income exceeds the threshold, you may have to repay **15% of the amount above it**. The repayment is normally deducted from your future monthly OAS payments.

For 2026 income:  
• The approximate minimum recovery threshold is $95,323  
• The repayment rate is 15% of income above the threshold  
• The repayment affects the following OAS payment period, generally July 2027 to June 2028  
• OAS can eventually be reduced to zero if income is high enough

This is not a tax on your savings or a penalty for owning a home. It is a repayment of benefits based  
on your reported income.

That distinction matters. You are not being punished for having planned well. The rules are simply designed  
to reduce OAS for recipients whose income is above the annual threshold.

How Much OAS Could Be Affected?  
The maximum monthly OAS pension changes by age and is adjusted periodically.  
For July to September 2026, the maximum monthly amounts are:

| **Age** | **Maximum monthly OAS** |
| --- | --- |
| 65 to 74 | Up to **$751.97** |
| 75 and over | Up to **$827.17** |

Your actual amount may be lower depending on factors such as your years of residence in Canada after  
age 18, whether you receive a partial pension, and whether recovery tax applies.

A simple example may help.

Suppose your 2026 net world income is $100,000:  
• Income above the threshold: $100,000 − $95,323 = $4,677  
• Estimated repayment: $4,677 × 15% = $701.55

That amount would generally be spread across the relevant OAS payment period. The exact result depends on your circumstances and the amount of OAS you receive.

The number may not look dramatic at first. But for a household managing groceries, property taxes, prescriptions, utilities, and travel, a smaller monthly payment can reduce breathing room.

What Counts Toward Retirement Income?  
The OAS clawback is based on more than your employment income. Your net world income may include  
income from Canadian and foreign sources, after applicable deductions.

Common sources include:  
• RRIF minimum withdrawals  
• RRSP withdrawals  
• Canada Pension Plan payments  
• Employer or private pension income  
• Part-time, contract, or consulting work  
• Rental income  
• Interest income  
• Dividends  
• Capital gains from non-registered investments  
• A large realized investment gain  
• The sale of a property or other one-time asset

This is where many retirees get caught off guard.

You may think, “I only withdrew what I needed.” But RRIF minimum withdrawals are generally required  
once your RRSP is converted to a RRIF. You may also sell an investment, receive a large dividend,  
or earn consulting income during the same year.

Each decision may be reasonable on its own. Together, they may push your income above the OAS  
threshold.

Why a One-Time Income Event Can Matter Later  
The OAS recovery tax is not always reflected immediately.

Your 2026 income can affect OAS payments beginning in July 2027. That means a one-time event this year, such as selling a rental property or realizing a substantial investment gain, could result in smaller OAS cheques later.

This delay can make the change confusing.

You may receive your normal OAS payments for months and then notice a reduction the following summer. By then, the transaction that caused the higher income may feel like old news.

That is why retirement planning should look forward, not only backward. The question is not simply, “What income did I receive last year?”

It is also:  
• What income am I likely to receive next year?  
• Which withdrawals are required?  
• Which withdrawals are optional?  
• Could a one-time transaction affect future benefits?  
• How will our household income look when both spouses are included?

What About the OAS Return of Income Form?  
The recovery calculation is based on income information reported through your annual tax filing and, where applicable, the Old Age Security Return of Income (OASRI).

If the Canada Revenue Agency sends you an OAS Return of Income form, review it carefully and file it by April 30 to help avoid interruption or delays in your OAS payments. The CRA uses the information to determine whether recovery tax applies and how much should be deducted.

The [Government of Canada OAS recovery tax information](https://www.canada.ca/en/services/benefits/publicpensions/old-age-security/recovery-tax.html) explains the thresholds and calculation. You can also review the official [OAS payment amounts for July to September 2026](https://www.canada.ca/en/services/benefits/publicpensions/old-age-security/payments.html).

Keep your records organized. Your RRSP and RRIF slips, pension statements, investment statements, rental records, and tax documents can all help create a clearer picture.

Practical Ways to Plan Around the OAS Clawback  
There is no single strategy that works for every household. Your best approach depends on your age,  
account types, income needs, tax situation, health, family goals, and comfort with investment risk.

Still, several planning ideas are worth discussing.

1\. Plan withdrawals deliberately  
Avoid treating every account as a separate island.

Instead of withdrawing automatically from one account, review how RRSPs, RRIFs, TFSAs, non-registered investments, pensions, and cash savings work together. A withdrawal that looks harmless in one year may create unnecessary income in another.

The objective is not always to avoid tax completely. It is to create a more predictable and sustainable income pattern.

2\. Understand the tax character of income  
Different income types may affect your taxable income differently.

Employment income, pension income, RRSP withdrawals, interest, dividends, and capital gains do not all work in exactly the same way. Understanding the difference may help you make more informed decisions about when to sell investments or draw from specific accounts.

You do not need to memorize the fine print. But you should know which questions to ask.

3\. Consider withdrawals before OAS begins  
Some people may benefit from reviewing RRSP withdrawals before age 65 or before OAS begins. In certain situations, spreading withdrawals over several years may help reduce the chance of a large income spike later.

This is not automatically the right choice. Early withdrawals can create tax today and may affect other benefits. The point is to compare the choices before a deadline makes the decision for you.

4\. Review income splitting opportunities  
Couples should look at retirement income as a household, not as two completely separate files.

Depending on your situation, options may include:  
• CPP sharing  
• Pension income splitting  
• Coordinating RRSP or RRIF withdrawals  
• Sharing eligible pension income where permitted  
• Timing investment income between spouses

These rules have specific requirements, so professional tax guidance may be appropriate.

5\. Coordinate your withdrawal sequence  
The order in which you draw from accounts can affect taxes, government benefits, future estate values, and the longevity of your savings.

A household may need to balance:  
• Immediate cash flow  
• Taxable income  
• OAS and other government benefits  
• Investment growth  
• Inflation  
• Future healthcare or support costs  
• Estate and legacy goals

That is why retirement planning in Alberta is more than choosing a monthly withdrawal amount. It is about coordinating the moving parts.

A Calm Next Step for Alberta Retirees  
The OAS clawback can feel frustrating, especially if you have spent years saving carefully. But it does not mean you did anything wrong.

You can start where you are.

Gather your latest OAS, CPP, pension, RRSP, RRIF, TFSA, and investment statements. Note any expected property sales, consulting income, large withdrawals, or other one-time events. Then review how those pieces may fit together over the next three to five years.

At JK Asset Management, we help Alberta individuals and couples bring those questions into one conversation. Our approach is personalized and ongoing. We look at your income, investments, insurance, retirement objectives, tax considerations, and changing needs together.

If you are exploring retirement planning in Alberta or looking for practical wealth management in Alberta, you are welcome to ask questions without having a perfect plan or substantial savings already in place.

Clarity comes first.

Start a Conversation  
• Website: [https://www.jkassetmanagement.ca/index](https://www.jkassetmanagement.ca/index)  
• Phone: (780) 399-5471  
• Email: [kapler@jkassetmanagement.ca](mailto:kapler@jkassetmanagement.ca)  
• Contact page: [https://www.jkassetmanagement.ca/contact](https://www.jkassetmanagement.ca/contact)

The OAS threshold, CPP and OAS amounts, tax rules, and government programs can change over time. This article is general educational information and is not tax advice. Your situation may require advice from a qualified tax professional, accountant, or other licensed specialist. We can help you understand the planning questions to bring forward and connect you with appropriate professionals where needed.

 

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