Mr. Davies, 66, retired last year and is budgeting for his retirement income. He is receiving the maximum Old Age Security (OAS) benefit. What would cause a clawback or reduction in his OAS benefits?

Question: Mr. Davies, 66, retired last year and is budgeting for his retirement income. He is receiving the maximum Old Age Security (OAS) benefit. What would cause a clawback or reduction in his OAS benefits?

Answer options:

• Increased dividend income from his Canadian equity portfolio. ✅ Increased income from his Registered Retirement Income Fund (RRIF) above a certain threshold.
• Drawing income from his Tax-Free Savings Account (TFSA).
• Receiving additional payments from his workplace pension plan.

Correct answer: Increased income from his Registered Retirement Income Fund (RRIF) above a certain threshold.

Explanation: OAS benefits are subject to a clawback (recovery tax) if an individual's net income exceeds a certain threshold (the OAS repayment threshold). Income from a RRIF is considered taxable income and would contribute to this net income total, potentially triggering a clawback if it pushes his net income above the threshold. TFSA withdrawals are tax-free and do not affect net income. Dividend income and workplace pensions are taxable but it's the RRIF income specifically mentioned as 'increased' that is most directly related to exceeding the threshold when already receiving max OAS.