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OAS Clawback - Do not get Clawed Back
It is important to plan your old age security properly to ensure if possible that one’s OAS payment is not clawed back. There are many investment strategies that can be implemented to help reduce one’s income to ensure if possible that OAS is not clawed back.
Investment products offered at Guaranteedinvestments.com may be able to help you.
Guaranteedinvestments.com offers individuals with access to a wide variety of investment products including annuities, guaranteed investment funds, guaranteed minimum withdrawal benefit plans, guaranteed lifetime withdrawal benefit plans and many other types of investments that have the potential to reduce your taxable income levels, thereby helping with OAS Clawbacks.
What are the eligibility requirements needed to qualify for OAS (Old Age Security)?
An individual must:
- Be 65 years of age or older
- Be a citizen or legal resident of Canada the day before applying (or, if no longer living in Canada, the day before you stopped living in Canada);
- Have lived in Canada for a minimum of 10 years after reaching the age of 18 (or, if no longer living in Canada, a minimum of 20 years after turning 28).
Social security agreements with other countries may allow you to qualify if you do not meet the specified rules.
How does an individual get the maximum OAS?
To get a full OAS pension one must:
- Meet the eligibility conditions stated above; and
- Have lived in Canada for at least 40 years after the age of 18; and Have income below the OAS clawback range.
Note: Special rules may also allow an individual to qualify for full OAS, if he or she were born on or before
July 1st, 1952.
 Can one receive less than the maximum OAS?
Yes, an individual may get less than the full OAS if:
- He or She meets the eligibility conditions stated above;
- and:
- will not be eligible for a full pension; and/or
- have income within the clawback range
OAS is calculated based on the number of years an individual has been living in Canada after the age of 18, divided by 40. Hence, anyone living in Canada for 25 years since age 18 could get 62.5% of full OAS (25 divided by 40 = 62.5%). Once a partial pension has been approved, further years of living in Canada would not increase one’s OAS payment.
What is the OAS Clawback?
If an individual’s net income is more than a certain threshold ($67,668 in 2011), your OAS payments will be reduced through a Clawback, or repayment. The repayment is 15 cents of OAS for each dollar if one’s income exceeds the clawback threshold. OAS payments are fully clawed back once the net income hits a certain level .
Clawback Rules:
- The threshold is fully indexed to inflation each year;
- If you face an OAS clawback one year, your next year's OAS payments will also be reduced;
- Amounts deducted for the clawback can be claimed on your tax return;
- If such deductions cause you financial hardship, apply to Canada Revenue Agency for a review of your situation.
Planning your OAS – Old Age Security
Experienced financial advisors and investment specialists at Guaranteedinvestments.com can work with you to ensure the most appropriate investment solutions are offered to you on an unbiased basis. Solutions that can help reduce your OAS clawback and help restore some, if not all of your Old Age Security payments.
Guaranteedinvestments.com offers individuals with access to a wide variety of investment products including annuities, guaranteed investment funds, guaranteed minimum withdrawal benefit plans, guaranteed lifetime withdrawal benefit plans and many other types of investments that have the potential to reduce your taxable income levels, thereby helping with OAS Clawbacks.
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