OAS Clawback
The OAS clawback is a special tax that the government imposes on Old Age Security (OAS) payments if a person's net income for the year exceeds a certain annual threshold.
In this article:
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How is the OAS clawback calculated in Snap?
As shown on the Government of Canada Website, a person's net income for 2025 will be used to calculate the clawback for OAS benefits for the period July 2026 - June 2027. However, for the OAS clawback calculations in Snap, we have decided to base the current year's clawback on the same year's taxable income for simplicity. Here is an example.
The OAS Minimum Income Recovery threshold for 2025 is $93,454 as set by the Canadian Government. A person would need to repay 15% of the difference between their net income before adjustments and this threshold amount.
Here is a simple example of a client with only a defined benefit pension income of $90,000 in 2025. Their net income before adjustments is their pension income plus the full value of the OAS pension amount they are eligible to receive before any clawback. In 2025, this is $90,000 + $8,732, which is $5,278 over the threshold. ($98,732 - $93,454 = $5,278).
The OAS clawback in 2025 in Snap is calculated as 15% of $5,278, which is $792.
The OAS clawback threshold is assumed to increase with inflation each year. (You can update the inflation setting in your scenario under Scenario Setup -> General).
If the OAS clawback is $0 for every year of the projections, the OAS Clawback column will not be displayed at all.
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How is the OAS benefit displayed in Snap?
The amount shown in the OAS column is the OAS benefit received by the client. The OAS clawback has already been subtracted from the client's maximum annual OAS amount and displayed in its own column.
Continuing the example above, here is this client's OAS information from the Gov't Benefits page.
2025 OAS benefit = Maximum annual OAS amount - OAS Clawback
2025 OAS benefit = $8,732 - $792 = $7,940
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Is the amount in the OAS Clawback column included in Cash-flow?
No, it differs from other columns in that respect and it is an exception. OAS clawback is already factored in in the OAS amount reduction (if we subtracted it again from cash flow, we would be double-counting it).
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In the Report, where can I see the OAS Clawback?
Under the Cash Inflow Details section of the report, both the OAS Pension and OAS Clawback are displayed.
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Using Taxable Income Targeting to minimize the OAS Clawback
With Snap, you can set an annual Taxable Income Target for each year of your projections, and Snap will automatically adjust cash flow to stay as close to that target as possible.
As a Target, select the bottom of the OAS Clawback threshold ($93,454 as of 2025) to attempt to prevent your client from reaching the 15% Clawback.
