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Discussion Starter #1 (Edited)
Just received my notice regarding OAS 'clawback' or 'Recovery Tax'.

It says the clawback will be based on my 2018 return. It also says that the amount in box 3 will be withheld starting at the date in Box 1 (July 2020). And this will continue until June 2020.

Do you think they forgot to get new forms printed?
 

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Just looked at my latest form and it's the same as yours. I get one every year at this time. You are very observant agent99. It looks like they choked this year and didn't change the 2018 to 2019 in the part where it says "based on the income you reported on your 20?? tax return". I didn't notice that.
 

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Yeah, I just got mine, and indeed they're using the wrong numbers to calculate the recovery clawback.

My spreadsheet calculates it every year for me and they have correctly used the 2019 Net Income line 23400, but they failed to use the new July 1st OAS threshold of $79054. They're still using the old 2019 threshold of $77580.

It will all come out in the wash.

ltr

Edit: You can calculate your correct clawback by finding your 2019 Net Income line 23400, and subtract July 2020 Threshold of $79054 and take 15% of the difference, then divide by 12 for monthly clawback.
 

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This kind of incompetence is too readily accepted in the civil service. It is such a visible indication of incompetence. Morneau should be apologizing for this in the house. But they will wait and hope no one notices.

(Maybe the new form should have the year and clawback threshhold printed by the computer to avoid such mistakes again! We can quickly check that number.)
 

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Interesting LTR, I thought it was just the year on the form that they neglected to change. Thanks for the update.
 

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For me, they are holding back an extra $50/mo so I will repay the "grant" in 6 months. Maybe a cashflow solution for the CRA?
I was originally thinking it might have to do with the fact that they extended the income tax filing date this year, as the change in July each year to clawback is a combination of the change in OAS threshold amount along with a change in which year they use for your Net Income. I wondered if perhaps they didn't yet have the change in Net Income resolved yet, but no, they used my 2019 taxes filed in 2020 as the value. So it seems a simple mistake on their part to have not updated the OAS threshold amount to the new value.

I also noticed that even though they usually revise the OAS maximum upward every Jan, Apr, Jul, Oct - it appears that there will be no increase this month. That pesky COVID is the culprit.

They say "As the Consumer Price Index did not exceed the level of the previous quarter, OAS benefit amounts remain unchanged for the July to September 2020 quarter."

ltr
 

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They will have to fudge the CPI this year because everything is more expensive due to Covid shutdowns. I just got back from Mexico and wow lots of inflated prices. By keeping the CPI low, they will save on CPP, OAS and civil servanr salaries.
 

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They will have to fudge the CPI this year because everything is more expensive due to Covid shutdowns. I just got back from Mexico and wow lots of inflated prices. By keeping the CPI low, they will save on CPP, OAS and civil servanr salaries.
Yeah, I notice Total CPI increased this month more than it has in 17 years as a result of the economy opening back up. The previous two months were minus 2 and minus 4, but this month was plus 0.7. That's a huge increase.

ltr
 

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Just received a second letter today. This one is using the correct year and threshold value. The recovery tax stayed the same. Sadly this is 60 % of my OAS.
 

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Just received a second letter today. This one is using the correct year and threshold value. The recovery tax stayed the same. Sadly this is 60 % of my OAS.
Mmmm, interesting, although I don't see how the tax could have remained the same unless they made a mistake.

ltr
 

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Just received a second letter today. This one is using the correct year and threshold value. The recovery tax stayed the same. Sadly this is 60 % of my OAS.
I have not received a second letter yet, but my OAS is in the bank today. It went down by the new increased recovery tax amount. In my case it's a 78% reduction.
 

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I have not received a second letter yet, but my OAS is in the bank today. It went down by the new increased recovery tax amount. In my case it's a 78% reduction.
Yeah, I got my new letter today.

They properly changed the incorrect dates and the amounts in the letter regarding threshold, except they forgot to change the calculation of the recovery tax and used the same incorrect amount from the first letter.

Maybe they'll be sending a new corrected third letter? These mailings must cost money.

ltr
 

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I got my letter too. Also, why no accompanying notice as to why there was another letter.
 
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