Understanding OAS Clawback for 2024: Insights from Calgary Financial Experts

Overview of OAS Clawback Mechanism

Definition and Purpose

The OAS Clawback, also known as the OAS Recovery Tax, is a mechanism designed to ensure that Old Age Security (OAS) benefits are distributed equitably. It reduces the OAS payments for high-income seniors to maintain the program’s sustainability.

Historical Context

The OAS Clawback was introduced in 1989 as a means to control the costs associated with the OAS program. Over the years, the income thresholds and clawback rates have been adjusted to reflect economic conditions and policy changes.

Key Changes for 2024

For 2024, there are several key changes to the OAS Clawback mechanism:

  • The income threshold for the OAS Clawback has been adjusted to reflect inflation.
  • New policies have been introduced to streamline the clawback process.
  • Enhanced support measures for low-income seniors have been implemented.

Financial experts at Bellwether Family Wealth recommend that seniors stay informed about these changes to optimize their retirement planning.

Eligibility Criteria for OAS Benefits

Income Thresholds

To qualify for Old Age Security (OAS) benefits, your income must fall below specific thresholds. For 2024, the income threshold for the OAS clawback starts at $86,912. If your income exceeds this amount, you will be subject to a reduction in your OAS benefits. The clawback rate is 15% of the income above the threshold.

Age Requirements

You must be at least 65 years old to start receiving OAS benefits. However, you can choose to defer your OAS payments up to age 70, which will result in higher monthly payments. The deferral increases your OAS payment by 0.6% for each month you delay, up to a maximum of 36% at age 70.

Residency Rules

To be eligible for OAS benefits, you must have lived in Canada for at least 10 years after turning 18. For full benefits, a minimum of 40 years of residency is required. If you have lived in Canada for less than 40 years, you may still qualify for partial benefits based on the number of years you have resided in the country.

It’s crucial to understand these eligibility criteria to maximize your OAS benefits and plan your retirement effectively. Bellwether Family Wealth can provide personalized advice to help you navigate these rules.

Calculating the OAS Clawback

Income Sources Considered

The OAS clawback, also known as the OAS recovery tax, is determined based on your net world income. Key income sources considered include:

  • Employment income
  • Pension income
  • Investment income
  • Capital gains
  • Foreign income

It’s crucial to understand that all these income sources contribute to your total net income, which is then used to calculate the clawback amount.

Calculation Formula

The OAS clawback is calculated using a specific formula. For the 2024 tax year, the formula is as follows:

Clawback Amount = (Net Income – Threshold) x 0.15


  • Net Income is your total income from all sources.
  • Threshold is the minimum income level at which the clawback begins. For 2024, this threshold is set at $86,912.

Examples of Clawback Scenarios

To better understand how the OAS clawback works, let’s look at a few examples:

  1. Example 1:
    • Net Income: $90,000
    • Threshold: $86,912
    • Clawback Amount: ($90,000 – $86,912) x 0.15 = $463.20
  2. Example 2:
    • Net Income: $100,000
    • Threshold: $86,912
    • Clawback Amount: ($100,000 – $86,912) x 0.15 = $1,963.20
  3. Example 3:
    • Net Income: $120,000
    • Threshold: $86,912
    • Clawback Amount: ($120,000 – $86,912) x 0.15 = $4,963.20

Understanding the calculation of the OAS clawback is essential for effective retirement planning. Financial advisors, such as those at Bellwether Family Wealth, can provide personalized guidance to help you navigate these complexities.

Strategies to Minimize OAS Clawback

Income Splitting

Income splitting can be an effective strategy to reduce the OAS clawback. By transferring income from a higher-earning spouse to a lower-earning one, you can lower the overall taxable income. This can be done through pension income splitting or by sharing investment income. This strategy is particularly beneficial for couples with significant income disparities.

Tax-Deferred Accounts

Utilizing tax-deferred accounts such as RRSPs (Registered Retirement Savings Plans) can help in minimizing the OAS clawback. Contributions to RRSPs are tax-deductible, which can lower your taxable income for the year. Withdrawals from RRSPs should be strategically planned to avoid pushing your income over the OAS clawback threshold.

Charitable Donations

Making charitable donations can also help in reducing your taxable income. Donations to registered charities are tax-deductible and can provide significant tax credits. This not only supports a good cause but also helps in minimizing the OAS clawback.

Tip: Consult with financial advisors like those at Bellwether Family Wealth to tailor these strategies to your specific financial situation.

Impact of OAS Clawback on Retirement Planning

Financial Planning Tips

Navigating the OAS clawback requires strategic financial planning. It’s crucial to understand how your income sources affect your OAS benefits. Consider working with a financial advisor to create a plan that minimizes your taxable income. Bellwether Family Wealth offers tailored advice to help you manage your retirement income effectively.

Alternative Income Sources

Diversifying your income sources can help mitigate the impact of the OAS clawback. Some options include:

  • Tax-Free Savings Accounts (TFSAs): Withdrawals from TFSAs are not considered taxable income.
  • Registered Retirement Savings Plans (RRSPs): Strategically timed withdrawals can reduce taxable income.
  • Pension Income Splitting: Sharing pension income with a spouse can lower individual taxable income.

Case Studies from Calgary

To illustrate the impact of the OAS clawback, let’s look at some real-life examples from Calgary:

Case StudyIncome SourcesOAS Clawback Impact
Retiree AEmployment Pension, RRSPModerate
Retiree BTFSA, Part-time WorkLow
Retiree CRental Income, InvestmentsHigh

Understanding the specific impact of the OAS clawback on your retirement plan can help you make informed decisions and optimize your income streams.

Expert Opinions from Calgary Financial Advisors

Insights on Policy Changes

Calgary’s financial planners have been closely monitoring the changes to the OAS clawback mechanism for 2024. Many experts believe these changes will significantly impact high-income retirees. The adjustments in income thresholds and the inclusion of new income sources are particularly noteworthy.

Advice for High-Income Retirees

Financial planners in Calgary, such as those at Bellwether Family Wealth, recommend several strategies for high-income retirees to mitigate the effects of the OAS clawback:

  • Income Splitting: This can help reduce the overall taxable income.
  • Tax-Deferred Accounts: Utilizing RRSPs and TFSAs can be beneficial.
  • Charitable Donations: These can provide tax credits that lower taxable income.

It’s crucial for retirees to consult with a financial planner Calgary to tailor these strategies to their specific financial situation.

Future Predictions

Looking ahead, Calgary financial advisors predict that the OAS clawback mechanism will continue to evolve. They advise retirees to stay informed about policy changes and to regularly review their financial plans. Staying proactive can help mitigate potential negative impacts on retirement income.

Resources and Support for Affected Seniors

Government Assistance Programs

The Canadian government offers several programs to support seniors affected by the OAS clawback. Old Age Security (OAS) and the Guaranteed Income Supplement (GIS) are two primary programs. Additionally, the Allowance for the Survivor provides financial aid to low-income seniors who have lost their spouse or common-law partner.

Financial Counseling Services

Financial counseling services can help seniors navigate the complexities of the OAS clawback. Bellwether Family Wealth, among other financial advisory firms, offers specialized services to assist seniors in optimizing their retirement income and minimizing clawback impacts. These services often include:

  • Personalized financial planning
  • Tax optimization strategies
  • Retirement income management

Community Support Groups

Community support groups provide emotional and social support to seniors dealing with financial stress due to the OAS clawback. These groups often offer:

  • Peer support and networking opportunities
  • Workshops and seminars on financial literacy
  • Access to local resources and assistance programs

It’s crucial for seniors to leverage these resources to ensure a stable and secure retirement. Community and professional support can make a significant difference in managing the financial challenges posed by the OAS clawback.


Understanding the OAS clawback 2024 is crucial for retirees and those nearing retirement. Calgary financial experts emphasize the importance of strategic financial planning to minimize the impact of the clawback on your retirement income. By staying informed about the thresholds and implementing effective tax strategies, you can better manage your finances and ensure a more secure retirement. Consulting with a financial advisor can provide personalized advice tailored to your specific situation, helping you navigate the complexities of the OAS clawback and optimize your retirement benefits.

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