An unusually large registered-plan withdrawal can raise a retiree's income enough to trigger repayment of Old Age Security. The ordinary income tax on the withdrawal and the OAS recovery calculation are separate parts of the review.
The dates matter because a return can also influence deductions from later monthly OAS payments.
Use the threshold for the income year
The published minimum recovery threshold is $93,454 for 2025 income and $95,323 for 2026 income. Do not apply a threshold merely because it appears beside the month of a pension deposit.
For a Canadian resident, the review starts with net income before adjustments and the relevant return worksheet. Recovery is generally based on 15% of income above the threshold, limited by the applicable OAS amount and calculation rules.
In a simplified calculation, $4,000 above the threshold produces a preliminary $600 recovery calculation. That is not a complete tax estimate and assumes sufficient OAS benefits for the calculation.
Distinguish the return from later withholding
The July 2026 to June 2027 recovery-deduction period is linked to 2025 income. The next July-to-June period uses the next income year.
Monthly deductions are tax withheld and must be reconciled with the annual slip and return. They should not be treated as an unexplained permanent reduction or added a second time to the repayment already calculated.
Review the whole year's income before a large withdrawal
Include pensions, employment, taxable investment amounts and planned registered withdrawals. Check whether eligible pension splitting changes either spouse's result; the largest possible split is not automatically the best one.
Keep the estimate, advisory letter and tax slips together. If the deduction no longer reflects the situation or causes hardship, use the CRA review process described in the official guidance.
A dated calculation is more useful than a general warning about a "clawback." It shows which income caused the change and which payments it affects.
