Page 125 - A Canuck's Guide to Financial Literacy 2020

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Cost of Living Increases

The monthly benefit from Old Age Security is indexed to the Consumer Price Index. Each
January, April, July and October, the benefits are reviewed. The monthly benefit will not
decrease if the cost of living goes down.

Old Age Security Clawback

Old Age Security has a mechanism called the clawback which involves your net worldwide
income. If your net worldwide income exceeds the threshold amount which for 2018 was
$75,910 Canadian dollars, you'd have to repay part of your OAS pension back. If your
income exceeds the maximum recovery threshold below, your whole pension is clawed
back to zero. As of 2018, it was $123,386.

• You must pay the claw back if

o your annual net worldwide income was more than $75,910 (for 2018, in
Canadian dollars); and
o you live in a country where the non-resident tax on Canadian pensions is
25% or more.

Net Worldwide Income

Your net worldwide income is the total of all the income you have earned from both inside
and outside Canada minus allowable deductions. You must include in the calculation the
following types of income:

o pensions
o social security
o interest
o dividends
o rental property
o capital gains
o business
o employment