The OAS clawback for couples
The recovery tax is calculated on each spouse's own net income: 15% of the amount over $93,454 (2025 income, payments July 2026 to June 2027). Your partner's income does not count. So a couple with one high earner and one low earner can often cut or remove the clawback by moving income across, legally, with pension income splitting and CPP sharing.
This page is the couple's version of our OAS clawback guide: the thresholds, two worked examples computed on the 2026 brackets, six levers in the order most couples should try them, and the things that do not work.
The thresholds, per person
| Income year | OAS payment year affected | Clawback starts at | OAS fully clawed back (65 to 74) | Fully clawed back (75+) |
|---|---|---|---|---|
| 2025 | July 2026 to June 2027 | $93,454 | $152,062 | $157,923 |
| 2026 | July 2027 to June 2028 | $95,323 | $155,320 (estimate) | $161,320 (estimate) |
Source: Service Canada, OAS recovery tax; the upper limits for 2026 income are canada.ca's estimates until the 2026 OAS amounts are final. Each spouse is tested on their own line 23400 net income. Verified October 22, 2026.
Example 1: RRIF income that can be split
Spouse A is 68 with $75,000 of RRIF withdrawals, $16,000 of CPP and full OAS, so A's net income is about $100,150, $6,696 over the line. Spouse B is 66 with $5,000 of CPP, full OAS and $4,000 of other income. Ontario. Because A is over 65, the RRIF income is eligible for splitting.
| No split | Optimal split (50%, $37,500 to B) | |
|---|---|---|
| A's OAS recovery tax | $1,004 | $0 |
| B's OAS recovery tax | $0 | $0 |
| Income tax, both spouses | $21,067 | $15,354 |
| Tax plus recovery tax | $22,072 | $15,354 |
| The couple keeps | $6,717 more a year with the split | |
RetireSmarter calculation: 2026 federal and Ontario brackets, basic personal, age and pension income amounts, OAS recovery tax at the 2025 threshold. The optimiser tries every split from 0% to 50% in 1% steps and keeps the cheapest.
Example 2: nothing to split, so share CPP
Spouse A is 66, still earning $70,000 and receiving $15,000 of CPP plus OAS; Spouse B is 65 with $4,000 of CPP, OAS and $6,000 of other income. Employment income, CPP and OAS cannot be split on T1032, but once both spouses are 60 or older they can ask Service Canada to share the CPP earned while they lived together.
| Before sharing | After sharing | |
|---|---|---|
| A's CPP, a year | $15,000 | $9,500 |
| B's CPP, a year | $4,000 | $9,500 |
| OAS recovery tax, both spouses | $104 | $0 |
| Tax plus recovery tax | $23,663 | $22,375 |
| The couple keeps | $1,288 more a year with sharing | |
RetireSmarter calculation with the same engine; CPP sharing rule from Service Canada (whole contributory period lived together). Try your own in the CPP sharing calculator.
Six levers, in the order to try them
- Pension income splitting (form T1032). Up to 50% of a workplace pension at any age, and of RRIF, LIF or RRSP-annuity income from 65. Free, reversible every year, and it lowers the transferring spouse's net income for the clawback. Guide · calculator.
- CPP pension sharing (Service Canada). Moves part of the CPP actually paid to the lower-income spouse. Both must be 60+ and living together; the total does not change. Guide · calculator.
- Convert the right RRSP to a RRIF. RRSP withdrawals cannot be split; RRIF income can from 65. A high earner who needs to draw registered money after 65 should usually draw it as RRIF income so half of it can be shifted. RRSP to RRIF.
- Spousal RRSP while still working. If one of you expects a much larger retirement income, contributions to a spousal RRSP build the lower earner's future RRIF instead, so the income lands in the lower-taxed hands from day one. Mind the three-year attribution rule. Guide.
- Draw TFSAs for the spouse near the line. TFSA withdrawals are not income, so they never move anyone toward the threshold; use them for the high earner's spending in years when a RRIF withdrawal would trigger clawback. Withdrawal order.
- Time the big years before OAS, or defer OAS. Capital gains, a corporation wind-up or an RRSP meltdown in the years before OAS starts cannot be clawed back; and OAS deferred to 70 grows 0.6% a month and is not tested until it is paid. RRSP meltdown · capital gains and the clawback.
What does not work
- Joint accounts. Putting an investment account in both names does not change who is taxed on it; the CRA attributes income to whoever supplied the money.
- Splitting CPP or OAS on the tax return. Neither is eligible pension income. CPP has its own sharing route; OAS has none.
- Gifting investments to your spouse. Income and capital gains on money given to a spouse are attributed back to the giver, with narrow exceptions (a loan at the CRA prescribed rate, or TFSA contributions).
- Assuming the GIS works the same way. The Guaranteed Income Supplement is tested on the couple's combined income, so shifting income between spouses does not change it. GIS guide.
Run both spouses, every year to 95
The couples planner optimises the split each year, applies CPP sharing, tests each spouse against the clawback line and shows the survivor's income.
Frequently asked questions
Is the OAS clawback based on household or individual income?
Individual. The recovery tax is 15% of each person's own net income above the threshold ($93,454 of 2025 income for payments from July 2026 to June 2027; $95,323 of 2026 income for July 2027 to June 2028). Your spouse's income does not count against your OAS, and yours does not count against theirs. That is exactly why moving income between spouses can shrink or remove the clawback.
Can pension splitting help reduce my OAS clawback?
Yes, and it is usually the single biggest lever. Splitting up to 50% of eligible pension income to your spouse on form T1032 lowers your net income for the recovery tax (the CRA says the election affects the repayment of OAS benefits). In the first example on this page the higher earner's clawback goes from $1,004 to $0 and the couple pays $6,717 less in total. Watch the receiving spouse: if the transfer pushes them over the line, their own clawback starts.
Which income can be split to reduce the clawback?
Payments from a registered pension plan at any age; RRIF, LIF and RRSP-annuity income once the transferring spouse is 65. CPP and OAS can never be split on T1032, and neither can RRSP lump-sum withdrawals, so a 66-year-old with a large RRSP and no RRIF has nothing to split until the RRSP becomes a RRIF or an annuity.
Can we split CPP or OAS to reduce the clawback?
Not on the tax return. CPP has its own mechanism, pension sharing through Service Canada, which moves part of the CPP actually paid to the lower-income spouse once you are both 60. OAS cannot be moved between spouses at all.
What if both of us are over the threshold?
Then income splitting and sharing cannot remove the clawback, only redistribute it, and the levers that reduce total net income matter more: drawing TFSAs rather than RRIFs for spending, deferring OAS to 70 (you cannot be clawed back on OAS you are not yet receiving, and the pension grows 0.6% a month), timing capital gains and RRIF meltdowns for years before OAS starts, and holding growth assets in TFSAs. Our OAS clawback guide lists seven levers in detail.
Does the GIS use household income?
Yes, unlike the clawback. The Guaranteed Income Supplement for a couple is tested on the combined income of both spouses other than OAS. So the two benefits run in opposite directions: the clawback is per person, GIS is per couple.
Sources
- Service Canada, Old Age Security recovery tax (thresholds and the 15% rate), read October 22, 2026.
- Canada Revenue Agency, pension income splitting (eligible income, the 50% maximum, the effect on OAS repayment), page updated January 20, 2026.
- Service Canada, CPP pension sharing, page updated June 18, 2025.
- Service Canada, OAS payment amounts (October to December 2026).
General information, not tax advice. Both examples are RetireSmarter calculations on the 2026 brackets in Ontario; other provinces, other income and provincial benefits change the result.
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Read every morning from Service Canada, Statistics Canada, the Bank of Canada and the CRA, and again at 11 a.m. ET on weekdays. Published figures only, no estimates.
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A free 7-email course for Canadians 50+: CPP timing, OAS clawback, RRSP to RRIF, TFSA, withdrawal order, and couples tax splitting. One short email a day. Unsubscribe anytime.