Line 23500 on the Canadian T1 tax return is where you report the social benefits repayment, sometimes called the clawback. If your net income for 2026 exceeds $95,323, you repay part of your Old Age Security; if it exceeds $86,125, you repay part of your regular Employment Insurance benefits.1Canada.ca. Old Age Security Pension Recovery Tax2Government of Canada. EI and Repayment of Benefits at Income Tax Time The figure you calculate goes in two places on your return: it comes off your income at Line 23500 and gets added to your tax owing at Line 42200.3Canada Revenue Agency. Line 23500 – Social Benefits Repayment
What Line 23500 Actually Does
You don’t cut a separate cheque for the clawback. Instead, the repayment flows through your return twice. At Line 23500, it reduces the net income shown on Line 23600 so you aren’t taxed on money you’re giving back.4Canada Revenue Agency. Line 23600 – Net Income At Line 42200, the identical amount increases your tax payable so the government collects it.3Canada Revenue Agency. Line 23500 – Social Benefits Repayment Missing one of those two entries is a common filing error.
2026 Thresholds and Rates
The thresholds are indexed each year, so last year’s numbers won’t work.
Old Age Security
If your net income before adjustments on Line 23400 tops $95,323 for 2026, you repay 15% of every dollar above that threshold, capped at the total OAS you received.1Canada.ca. Old Age Security Pension Recovery Tax Your OAS is fully clawed back at $154,753 if you’re 65 to 74, or $160,696 at 75 and older.5Government of Canada. Canada Pension Plan (2026) and Old Age Security (April to June)
An example: a net income of $105,323 sits $10,000 above the threshold. Fifteen percent of $10,000 is $1,500, and that’s your OAS repayment. If you received less than $1,500 in OAS during the year, you only repay what you actually got.
Employment Insurance
EI uses a lower threshold and a much higher rate. Once your 2026 net income passes $86,125, you repay 30% of the lesser of the amount over the threshold or the regular benefits you received.2Government of Canada. EI and Repayment of Benefits at Income Tax Time Doubling the OAS rate matters most for people who collected EI early in the year and then landed a higher-paying job.
Who Doesn’t Have to Repay
Special EI benefits are exempt from the clawback at any income level. That covers maternity, parental, sickness, compassionate care, and family caregiver benefits.2Government of Canada. EI and Repayment of Benefits at Income Tax Time If you received a mix of regular and special benefits, only the regular portion is subject to repayment.
There’s also a first-time exemption. If you received less than one week of regular or fishing benefits in the ten tax years before 2026, you owe no EI repayment even if your income clears $86,125.2Government of Canada. EI and Repayment of Benefits at Income Tax Time
One boundary worth naming: the Guaranteed Income Supplement and spouse’s allowance, reported on Line 14600, aren’t repaid through Line 23500. They’re handled by a separate deduction at Line 25000.6Canada Revenue Agency. Line 14600 – Net Federal Supplements Paid
How to Work Out the Number
Pull out your slips first. OAS and GIS payments appear on the T4A(OAS); EI payments appear on the T4E. Both slips show the gross benefits paid to you during the year.7Canada.ca. Line 42200 – Social Benefits Repayment The Federal Worksheet included with the T1 package walks you through OAS and EI in a single chart. For each benefit:
- Start with your net income before adjustments from Line 23400.
- Subtract the threshold ($95,323 for OAS, $86,125 for EI). If you’re at zero or below, you owe nothing on that benefit.
- Multiply the excess by the rate: 15% for OAS, 30% for EI.
- Cap the result at the total benefits you actually received.
Combine any OAS and EI amounts on the worksheet. The single total goes on both Line 23500 and Line 42200.3Canada Revenue Agency. Line 23500 – Social Benefits Repayment If Service Canada already withheld OAS recovery tax during the year (box 22 of your T4A(OAS)), that withholding reduces what you owe at filing time, but you still report the full calculated repayment on Line 23500.
If You Skip the Line or Get It Wrong
Leaving Line 23500 blank when you owe a repayment understates your tax, and the CRA treats it like any other unreported amount. Fail to report $500 or more when you had a similar omission in the prior three years, and a repeated failure to report penalty applies: the lesser of 10% of the unreported amount or 50% of the difference between the tax you should have paid and any tax already withheld.8Canada Revenue Agency. False Reporting or Repeated Failure to Report Income
For gross negligence or a knowingly false statement, the penalty is the greater of $100 or 50% of the understated tax tied to the omission.8Canada Revenue Agency. False Reporting or Repeated Failure to Report Income If you spot your own mistake, the Voluntary Disclosures Program lets you correct it before the CRA contacts you, which can eliminate penalties and reduce interest. The underlying tax still comes due.
The CRA cross-references Line 23500 against the T4E and T4A(OAS) slips it already has on file. Mismatches trigger a reassessment notice and a bill for the difference plus interest.
The Side Effect on Other Benefits
Because Line 23500 lowers your net income at Line 23600, it can raise your eligibility for income-tested programs like the GST/HST credit, the Canada Child Benefit, and provincial credits keyed to net income.4Canada Revenue Agency. Line 23600 – Net Income The clawback takes from one pocket and can return a small amount to another, so it’s worth running your figures through the Federal Worksheet carefully before you file.