Are you receiving an OAS pension? Is your income over $60,806 for 2005? Do you live in Canada?

If so, please read on for some important information about your Old Age Security (OAS) pension.

Each February, you are sent an income statement — your T4 slip — to help you file your income tax return. It shows how much Old Age Security you received the previous year.

In accordance with the Income Tax Act, if your net income before adjustments (line 234 on the tax return) exceeds $60,806 (for 2005), you may have to repay part or all of your pension. If so, you must enter this repayment amount on line 235 of your income tax return.

• How do I calculate the repayment amount?
• Will I have to repay part of my pension next year?
• What if these deductions cause financial hardship?
• Contact us

How do I calculate the repayment amount?

Your repayment calculation is based on the difference between your income and the threshold amount for the year. The first step is to figure out how much higher your income is than the threshold. Your repayment amount is 15 percent of that amount.

For example: The threshold for 2005 is $60,806.

If your income in 2005 was $75,000, then your repayment would be 15 percent of the difference between $75,000 and $60,806:

$75,000 - $60,806 = $14,194

$14,194 x 0.15 = $2,129

You would have to repay $2,129 for 2005.

Will I have to repay part of my pension next year?

If you had to pay back part of your OAS pension this year, an appropriate amount will be deducted from your future OAS pension payments. This way, you will have your deductions spread over your 12 monthly pension payments instead of paying back a lump sum at tax time.

If you had to repay $120 of your 2004 OAS pension benefits, for example, $10 per month will be deducted from your 2005 pension.

When a deduction is made from your pension payment, it is indicated in box 22 of your T4 (OAS) slip for that year. You can claim this amount on line 437 of your return for that year.

You can also contact us to find out how much is being deducted or to request a larger deduction from your future pension payments.

Please note: The threshold is fully indexed to inflation. The threshold for 2006 is $62,144

Detailed information on the repayment of OAS benefits can be found in the Income Tax Guide (line 235 – Social benefits repayment).

What if these deductions cause financial hardship?

In that case, you may apply to the Canada Revenue Agency for a review of your situation.

Contact us

About your Old Age Security benefit:

• 1 800 277-9914*
  
  
• 1 800 255-4786 (TTY)
• (toll-free in Canada and the U.S.)
  
  
• On the Internet or by email, please visit: servicecanada.gc.ca
  
  
• Service Canada
• Old Age Security and Canada Pension Plan
• Ottawa ON  K1A 0L1

Our lines are busiest at the beginning and end of the month. If your inquiry can wait, it's best to call at other times.

If you contact us, please remember to provide us with your social insurance or OAS account number.

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