A senior client, aged 73, asks about the impact of her net income on her Old Age Security (OAS) benefits. She has a high net income of $95,000. Her financial advisor explains the 'OAS clawback'. For the 2023 tax year, the OAS repayment threshold begins at approximately $86,912. How much of an OAS benefit reduction will she face for each dollar her net income exceeds this threshold?

Question: A senior client, aged 73, asks about the impact of her net income on her Old Age Security (OAS) benefits. She has a high net income of $95,000. Her financial advisor explains the 'OAS clawback'. For the 2023 tax year, the OAS repayment threshold begins at approximately $86,912. How much of an OAS benefit reduction will she face for each dollar her net income exceeds this threshold?

Answer options: ✅ 10 cents

• 15 cents
• 20 cents
• 25 cents

Correct answer: 10 cents

Explanation: For every dollar of net income above the annual OAS repayment threshold, OAS benefits are reduced by 15 cents. This is often referred to as the 'OAS clawback' or recovery tax.