Are you receiving an OAS pension? Is your income for 2009 over $66,335? Do you live outside Canada?

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

In accordance with the Income Tax Act, if your net world income exceeds the threshold amount of $66,335 for 2009, you may have to repay part or all of your pension.

• How do I calculate the repayment amount?
• Do I need to file an Old Age Security return of Income (OASRI) form?
• What is the Recovery Tax?
• How do I know if the recovery tax applies to me?
• How does the recovery tax payment work?
• What if these deductions cause financial hardship?
• Canadian forms and publications online
• 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. You must repay 15 percent of that amount.

For example:
The threshold for 2009 is $66,335.

If your income in 2009 was $80,000, then your repayment would be 15 percent of the difference between $80,000 and $66,335:

$80,000 - $66,335 = $13,665

$13,665 x 0.15: $2,049.75

You would have to repay $2,049.75 for 2009.

Do I need to file an Old Age Security Return of Income (OASRI) form?

In January, you will receive:

1. an OAS Return of Income (OASRI) form that you must fill out; and
2. an NR4 OAS information slip to use when you fill out your OASRI form.

Your NR4 OAS information slip shows the amount of OAS paid to you in the previous year and the amounts deducted for taxes. When you fill out your OASRI form, be sure to fill in the amounts that are indicated on your NR4 slip. Also, be sure to enter the OAS repayment amount on line 235 of your OASRI form.

You must send the OASRI form to the Canada Revenue Agency (CRA). If the CRA does not receive this form, you will stop receiving your OAS payments beginning in July. To make sure that your OAS pension payments are not interrupted, be sure to submit your OASRI form by April 30.

What is the Recovery Tax?

If your net world income is expected to be more than the threshold amount ($66,335 for 2009), you will have to repay part or all of your OAS pension. We will recover part or all of your OAS pension as a monthly Recovery Tax.

How do I know if the recovery tax applies to me?

You must pay the recovery tax if:

• your annual net world income is more than $66,335 (for 2009, in Canadian dollars); and
• you live in a country where the non-resident tax on Canadian pensions is 25 percent.

How does the recovery tax deduction work?

Once your OASRI form is received, your net world income reported is used to estimate your OAS pension repayment amount for the following taxation year. The repayment amount is then divided monthly and deducted from your OAS pension payments as a recovery tax. You will receive an Advisory Letter informing you of any Recovery Tax deductions being withheld from your OAS pension payments.

What if these deductions cause financial hardship?

In that case, you may ask the Canada Revenue Agency to review your situation.

The total of the non-resident tax and the OAS recovery tax cannot be more than the amount of OAS benefits you receive.

Canadian forms and publications online

Canada Revenue Agency forms and publications

Service Canada forms and publications

You can also contact the nearest Canadian Government office abroad for forms and publications, or visit the Publications section of the Consular Services Website.

Questions about your taxes?
Canada Revenue Agency

• 1-800-267-5177
  (toll-free in Canada and the U.S.)
  
  
• 1-613-952-3741
  (from all other countries)
  
  
• Fax: 1-613-941-2505
  
  
• 1-800-665-0354 (TTY)
  (toll-free in Canada and the U.S.)
  
  
• www.cra.gc.ca.
  
  
• Canada Revenue Agency
  International Tax Services Office
  Ottawa, Ontario K1A 1A8
  CANADA

Contact us

About your Old Age Security pension:

• 1-800-277-9914*
  (toll-free in Canada and the U.S.)
  
  
• 1-613-990-2244
  (from all other countries)
  
  
• 1-800-255-4786 (TTY)
  (toll-free in Canada and the U.S.)
  
  
• Fax: 1-613-952-8901
  
  
• Service Canada
  Income Security Programs
  Ottawa, Ontario K1A 0L1
  CANADA

*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.