2026 recovery limits
| Item | 2026 income year |
|---|---|
| Recovery starts | $95,323 |
| Recovery rate | 15% |
| Estimated full recovery, age 65–74 | $155,109 |
| Estimated full recovery, age 75+ | $161,088 |
| Recovery period affected by 2026 income | July 2027 to June 2028 |
These are the Government of Canada’s published estimates for the 2026 income year. The government marks the full-recovery figures as estimates from January through September and finalizes them from October through December. A calculator using one quarter’s maximum OAS amount for all 12 months can therefore show a different planning estimate. Approximate formula: starting threshold + annual OAS entitlement ÷ 15%.
Income that may trigger recovery tax
- Employment and self-employment income
- CPP and taxable pension income
- RRSP and RRIF withdrawals
- Taxable investment and rental income
- Taxable capital gains and other amounts included in net income
TFSA withdrawals are not taxable income and do not directly trigger OAS recovery tax.
Worked example: $123,000 of 2026 income
| Calculation | Amount |
|---|---|
| 2026 net world income | $123,000 |
| Less threshold | ($95,323) |
| Income above threshold | $27,677 |
| Recovery tax: $27,677 × 15% | $4,151.55 |
Assume this person’s actual OAS payment is $705 per month ($8,460 annually). This is a hypothetical payment—not the 2026 maximum—and actual OAS varies with factors such as Canadian residence history, start age, and quarterly indexing. Estimated OAS remaining would be $4,308.45, or $359.04 per month.
Why 2026 income affects 2027–28 payments
The $4,151.55 recovery based on 2026 income is used from July 2027 through June 2028—an indicative deduction of $345.96 per month. If actual 2027 income drops, final recovery tax may be lower or zero even though deductions initially reflect the earlier high-income year. Form T1213OAS can request lower withholding when current income has fallen substantially.
When to start OAS
No application month permanently avoids clawback. Choose a start date using retirement cash flow, longevity, tax, GIS eligibility, and the value of deferral. OAS rises by 0.6% for each month deferred after 65, to a maximum 36% at 70.
Illustrative one-year delay
Continue the worked example above and ignore indexing. Starting in July 2027 leaves $359.04 per month after the illustrative recovery tax for 12 months, then returns to the hypothetical $705 monthly pension. Delaying for one year increases that same $705 pension by 7.2%, to $755.76 per month. The delayed pension is then $50.76 higher per month and takes about 84.9 months after July 2028—approximately July 2035—to recover the $4,308.45 forgone during the first year. This simplified comparison ignores income tax, investment returns, future indexing, changing clawback exposure, GIS, and survivor considerations.
How to apply
Many people are automatically enrolled and receive a letter around age 64. Otherwise, or to choose a different date, apply through My Service Canada Account or by mail using Form ISP-3550. If prior-year income creates withholding but current income has fallen, consider Form T1213OAS; approval is not automatic.
Official sources
Educational illustration only—not tax or legal advice. Confirm current OAS rates and thresholds before making a start-date decision.