For retirees, Old Age Security (OAS) can be an important part of monthly income. And the clawback is the portion of that benefit that some higher-income Canadians may have to repay. But the good news is that Tax-Free Savings Account (TFSA) income doesn’t come with its own separate clawback limit. Instead, the government looks at net world income.
For 2025, the recovery tax kicked in once income exceeded $93,454, with 15% of the excess subject to repayment. For 2026, the estimated threshold rose to $95,323. That means the bigger issue isn’t how much income your TFSA produces on its own, but how all of your income sources come together.
For retirees with pensions, investment income, Registered Retirement Savings Plan (RRSP) or Registered Retirement Income Fund (RRIF) withdrawals, and other taxable income, that distinction could matter quite a bit when planning cash flow.
In this article, I’ll explain how the OAS clawback works and highlight two Canadian dividend stocks that could fit well inside a TFSA.
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How the OAS clawback works
So the key number to watch isn’t a specific amount of TFSA income. It is the net world income threshold used to calculate the OAS recovery tax.
For income earned in 2025, the Government of Canada sets the minimum recovery threshold at $93,454 for the July 2026 to June 2027 recovery period. For example, net world income of $100,000 exceeds that threshold by $6,546. Applying the 15% recovery rate would result in a repayment of $981.90.
For that recovery period, the maximum threshold is $152,062 for people aged 65 to 74 and $157,923 for those aged 75 and older. For 2026 income, the estimated minimum threshold rises to $95,323, while the estimated maximum thresholds are $155,320 and $161,320, respectively.
With that in mind, retirees looking to generate investment income inside a TFSA may want to focus on reliable dividend-paying companies. That brings us to two Canadian income stocks worth a closer look.
Chartwell Retirement Residences stock
With that income-planning backdrop in mind, Chartwell Retirement Residences (TSX: CSH.UN) is one TFSA-friendly income stock worth a closer look. It’s one of Canada’s largest retirement residence operators and serves about 25,000 residents across four provinces.
Currently, its units trade at $20.37 each, giving the real estate investment trust (REIT) a market cap of about $6.7 billion. It also offers a 3% annualized dividend yield. The stock was roughly flat over the last year and down 9% over three months. However, its underlying business has been improving, which makes it look undervalued to buy for the long term.
In the second quarter of 2026, Chartwell’s property revenue climbed 19.5% year-over-year (YoY) to about $320 million. Its funds from operations (FFO) jumped 34% to $90.5 million, while FFO per unit rose 16.7% to $0.28. Chartwell is also expanding through acquisitions and new developments, including four announced projects representing 828 suites.
Improving occupancy, growing FFO, and monthly distributions make Chartwell an attractive income stock to consider for a TFSA.
Gibson Energy stock
TFSA investors seeking higher income may also want to consider Gibson Energy (TSX: GEI). It mainly provides energy storage, optimization, processing, gathering, and waterborne vessel loading services across North America.
Its shares recently traded at $30.30 per share with a market cap of roughly $5.2 billion and a 5.8% annualized dividend yield. The stock had gained about 21% year-to-date.
Gibson’s Infrastructure adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) reached a record $169.3 million in the second quarter, up about 11% YoY. Higher throughput at the Gateway and Edmonton terminals, contributions from the Chauvin assets, and restructuring benefits supported that growth.
On top of that, the company completed its $400 million Chauvin acquisition and continues to advance the Chauvin expansion and Hardisty Connection projects.
With a 5.8% yield, record Infrastructure-adjusted EBITDA, and new projects supporting future growth, Gibson looks attractive for long-term TFSA income investors.
