To calculate your Old Age Security pension and clawback, start with the residency fraction: divide your years of Canadian residency after age 18 by 40, then multiply by the current maximum monthly payment. For payments from January through March 2026, that maximum is $742.31 for recipients aged 65 to 74, rising to $816.54 once you turn 75.1Government of Canada. Old Age Security Payment Amounts From that gross amount, the recovery tax subtracts 15 cents for every dollar your net world income exceeds the annual threshold. Two numbers drive everything: the years you lived in Canada, and the income you report on your tax return.
Step 1: Count Your Years of Canadian Residency
Forty years of Canadian residency after age 18 earns the full pension. Anything less gives you a proportional fraction of the maximum: your years divided by 40, with each year worth 2.5 percentage points.2Government of Canada. Old Age Security – How Much You Could Receive Years before your 18th birthday do not count.
The minimum to qualify depends on where you are when you apply. If you live in Canada, you need at least 10 years of Canadian residency after 18. If you live outside Canada, you need 20.3Government of Canada. Old Age Security – Do You Qualify
What counts as “residency” has a technical meaning in the federal regulations: you made your home in Canada and ordinarily lived here. Absences shorter than one year don’t break the streak, and neither does time abroad for school or university. Longer absences are also protected in specific situations, including work outside Canada for the federal or provincial government, service in the Canadian Forces, employment with a Canadian company while keeping a permanent home in Canada, and missionary or international development work. These count as though you never left, provided you returned to Canada within six months of the assignment ending or reached pension age while still employed abroad.4Justice Laws Website. Old Age Security Regulations – Section 21
Service Canada verifies your dates during the assessment, so keep records of your entries and exits. Gaps you can’t document can shrink your fraction.
Once payments start, your fraction is fixed. Living in Canada longer after that won’t raise it.
Sample Amounts by Years of Residency
Using the Q1 2026 maximum of $742.31 for ages 65 to 74:1Government of Canada. Old Age Security Payment Amounts
- 40 years: 40/40 = 100%, or $742.31 per month
- 30 years: 30/40 = 75%, or about $556.73 per month
- 20 years: 20/40 = 50%, or about $371.16 per month
- 10 years: 10/40 = 25%, or about $185.58 per month
Step 2: Apply the Age-75 Increase and Any Deferral
Two adjustments can raise your base amount before the clawback ever gets involved.
The month after you turn 75, your OAS pension automatically increases by 10%. You don’t apply for it. If you’re on a partial pension, the 10% applies to your partial amount.2Government of Canada. Old Age Security – How Much You Could Receive
Deferring your start date past 65 raises the payment permanently. Every month of delay adds 0.6%, or 7.2% per year. The most you can defer is 60 months, producing a 36% increase at age 70.2Government of Canada. Old Age Security – How Much You Could Receive At Q1 2026 rates, a full pension deferred to 70 would pay roughly $1,009.54 per month. The 36% is layered on your residency-based amount, so 30 years of residency and a five-year deferral gives you 36% on top of the 75% partial pension, not on the maximum.
If you’re past 65 and simply haven’t applied yet, Service Canada can issue retroactive payments covering up to 11 months before your application date. But if you actively chose to defer, that period doesn’t qualify for back payments.5Government of Canada. Old Age Security – When to Start Your Retirement Pension
Step 3: Calculate the Recovery Tax
The recovery tax, commonly called the clawback, kicks in once your annual net world income clears a threshold. You repay 15 cents of your pension for every dollar above that line, and the total is spread across 12 monthly deductions during a recovery period that lags your income year by roughly 18 months.6Government of Canada. Old Age Security Pension Recovery Tax
The thresholds move each year. Three recovery periods matter for anyone planning around 2026:
- January to June 2026 payments (based on 2024 income): clawback starts at $90,997. Full pension elimination at $148,451 for ages 65 to 74, or $154,196 at 75 and over.
- July 2026 to June 2027 payments (based on 2025 income): clawback starts at $93,454. Full elimination at $152,062 for ages 65 to 74, or $157,923 at 75 and over.
- July 2027 to June 2028 payments (based on 2026 income): clawback starts at $95,323. Full elimination at $154,708 for ages 65 to 74, or $160,647 at 75 and over.6Government of Canada. Old Age Security Pension Recovery Tax
A Worked Example
Say your 2025 net world income comes in at $103,454. The threshold for that income year is $93,454, so you’re $10,000 over. Multiply $10,000 by 15% and you owe $1,500. That $1,500 spreads across 12 months, cutting your pension by $125 per cheque from July 2026 through June 2027.7Government of Canada. Repayment of Old Age Security Pension
One large RRSP withdrawal, the sale of an investment property, or a burst of capital gains can push a single year’s income over the threshold. Because the recovery period lags by about 18 months, the deduction shows up long after the income event.
Why the Maximum Keeps Changing
OAS amounts are reviewed four times a year, in January, April, July, and October, and adjusted to reflect changes in the Consumer Price Index. When the cost of living rises, payments rise. When it falls, payments hold steady rather than drop.1Government of Canada. Old Age Security Payment Amounts Any specific dollar figure here may shift by the next quarter.
If You’ve Lived Outside Canada
Canada has social security agreements with more than 50 countries, including the United States, the United Kingdom, France, Germany, and Australia.8Government of Canada. What Is the Purpose of International Social Security Agreements These agreements can help you meet the 10-year or 20-year minimum by combining periods lived in a partner country with your Canadian years.9Government of Canada. Eligibility – Pensions and Benefits – Lived or Living Outside Canada
The agreement only opens the door. It doesn’t raise your fraction. Your monthly amount stays based on the years you actually lived in Canada. Sixteen years of Canadian residency plus U.S. credits used to reach the 20-year threshold still pays 16/40ths, not 20/40ths.9Government of Canada. Eligibility – Pensions and Benefits – Lived or Living Outside Canada Under the Canada-U.S. agreement, you need at least one year of Canadian residency after 1951 and after age 18 before U.S. Social Security credits can count toward the OAS requirement.10Social Security Administration. Agreement Between the United States and Canada
Collecting OAS while living outside Canada adds a second tax layer. Payments are subject to a flat 25% non-resident withholding tax under Part XIII of the Income Tax Act, though a tax treaty with your country of residence may reduce that rate.11Government of Canada. Non-Residents of Canada You file the Old Age Security Return of Income each year, and Service Canada uses that income to estimate the following year’s recovery tax.6Government of Canada. Old Age Security Pension Recovery Tax Living abroad does not shelter you from the clawback; both taxes can apply at the same time.