What the clawback costs, and what caused it.
Old Age Security is recovered at 15% of net income above $95,323 for 2026. Net income counts the grossed-up dividend, not the cash — so dividends get there on less money than anything else.
Why dividends trip it first
An eligible dividend is inflated 38% before it appears on your return. Receive $45,000 and your net income shows about $62,100 — roughly $17,100 of income that never reached your account, sitting between you and the threshold. The dividend tax credit fixes the tax further down the return; it does not reduce the income figure that the recovery is tested against.
What else sees the inflated figure
The age credit, the Guaranteed Income Supplement, provincial income-tested programs, spousal and dependant credits, and the medical expense threshold. Net income is used by all of them.
The account that does not count
A TFSA withdrawal is not income. It does not appear on the return, does not raise net income, and cannot trigger any recovery — which makes it worth more in retirement than the shelter was during accumulation. Drawdown ordering.
What this ignores
Every deduction that reduces net income, pension income splitting, and the fact that the threshold is re-indexed annually. It is an illustration of one mechanism, not a projection. Figures are for 2026, transcribed 2026-08-21 (source).