OAS Eligibility, Deferral, and the Clawback Explained

Old Age Security (OAS) is a monthly payment from the federal government available to most Canadians once they turn 65. Unlike CPP, it has nothing to do with whether you worked. It's funded by general tax revenue and paid based on how long you've lived in Canada.

Government benefit figures on this page reflect 2026 amounts and are updated annually. Verify current amounts at Canada.ca or Service Canada before making any decisions.

Who qualifies for OAS

To receive OAS, you must meet all three of the following:

1. You are 65 years of age or older
2. You are a Canadian citizen or legal resident at the time your application is approved
3. You have lived in Canada for at least 10 years after age 18

If you live outside Canada when you apply, the residency requirement increases to 20 years of Canadian residency after age 18.

Full pension vs. partial pension

The full OAS pension requires 40 years of Canadian residency after age 18. If you have between 10 and 39 years, you receive a partial pension — calculated as 1/40th of the full amount for each complete year of residency.

For example: if you lived in Canada for 30 years after age 18, you'd receive 30/40ths (75%) of the full OAS pension.

International social security agreements can sometimes allow residency or contribution periods in other countries to count toward OAS eligibility. If you've lived or worked outside Canada, it's worth checking whether an agreement applies to your situation.

The age-75 top-up

Since July 2022, Canadians 75 and older receive an automatic 10% increase to their OAS pension. This applies permanently once you turn 75 — you don't need to apply for it separately. The maximum OAS at 75+ is approximately $800/month (2026).

Should you defer OAS?

OAS doesn't have to start at 65. You can delay it up to age 70, and for every month you delay past 65, your pension increases by 0.6% — up to a maximum increase of 36% at age 70.

The breakeven point for deferring to 70 vs. starting at 65 is roughly age 81–82 — meaning if you live past that age, deferring pays off in total lifetime income. If you have reason to expect a shorter lifespan or need the income now, starting at 65 makes more sense.

The OAS clawback (Recovery Tax)

OAS is taxable income — and if your net income exceeds a certain threshold, you must repay part of it through what's formally called the OAS Recovery Tax (commonly called the "clawback").

For 2026, the clawback threshold is approximately $90,997. For every dollar of net income above that threshold, 15 cents of OAS is repaid. The full OAS pension is eliminated at net income of approximately $148,000.

The clawback is calculated on your prior year's net income and withheld from the following July to June OAS payments. This means if you had unusually high income one year (a large RRIF withdrawal, sale of property, etc.), your OAS will be reduced the following year even if your income has since dropped.

Strategies to reduce clawback exposure

Some Canadians manage their income to stay below or closer to the clawback threshold. Common approaches include splitting pension income with a spouse, managing RRSP/RRIF withdrawal timing, using TFSA withdrawals (which don't count as income), and accelerating RRSP-to-RRIF conversions strategically. These are planning decisions that depend heavily on your individual situation — this is one area where a licensed financial advisor genuinely earns their fee.

How to apply

Some Canadians are automatically enrolled in OAS by Service Canada — you'll receive a letter about six months before your 65th birthday if this applies to you. If you don't receive a letter, apply through My Service Canada Account, by mail, or at a Service Canada office.

Apply at least six months before you want payments to begin. OAS can be backdated a maximum of 11 months if you delay your application — but you cannot receive retroactive payments for periods before age 65.