The federal government now expects to collect $2.0 billion of the $12.0 billion in COVID benefit overpayments on its books at March 31, 2025, or 16.7%, down from 43.9% a year earlier (our calculation from Employment and Social Development Canada, ESDC, Question Period notes). The other $10.0 billion sits in an allowance for doubtful accounts. The debts are still owed; Ottawa has simply stopped counting on most of them.
COVID repayments get the headlines, but they are not the largest clawback. In 2024-25 the Old Age Security recovery tax pulled back $3,585 million through the tax system, about ten times the $365 million in Employment Insurance benefit repayments (CRA financial statements). For families with children, in our reading, the clawbacks that bite hardest are quieter: refund offsets and overlapping benefit phase-outs. We went through the CRA’s audited statements, ESDC’s briefing notes and the CRA’s collection rules to trace how the money comes back.
The brief
- $2.0B
Net COVID benefit overpayments the government expected to collect at March 31, 2025, out of $12.0 billion owed, after a $10.0 billion allowance for doubtful accounts (ESDC).
- $3,585M
Old Age Security recovered through the OAS recovery tax in 2024-25, up 20.5% from $2,974 million in 2023-24 (CRA financial statements, our calculation).
- $641.1M
Debts ESDC wrote off, forgave or remitted in 2024-25, up from $594.1 million, including $166.1 million in OAS overpayment remissions (ESDC).
- 18.5¢
Benefits lost per extra dollar of income for a two-child family at $50,000 of adjusted family net income in the July 2026 to June 2027 benefit year, before income tax (our calculation from CRA CCB and CGEB rates).
Insight 01
Ottawa expects to collect 17% of the $12.0 billion in COVID overpayments, down from 44% a year earlier
At March 31, 2024, the federal books carried more than $10.7 billion in overpayments of the Canada Emergency Response Benefit (CERB), the EI Emergency Response Benefit and the Canada Recovery Benefits, less a $6.0 billion allowance for doubtful accounts: $4.7 billion net (ESDC Question Period note, December 2024). A year later it was $12.0 billion gross, $10.0 billion allowance, $2.0 billion net (ESDC Question Period note, October 2025).
The amount owed grew 12.1% in the year post-payment verification was largely finished (the CRA says it was primarily completed by March 31, 2025). The amount the government expects to see fell 57.4% (our calculation). The CRA’s audited statements point the same way on a slightly different scope: $11,024 million owed by individuals under the COVID programs at March 31, 2025, a $9,463 million allowance and $1,561 million net, down from $4,033 million net a year before. That is a 14.2% expected recovery rate (our calculation).
| COVID benefit overpayments (CERB, EI-ERB, CRB) | March 31, 2024 | March 31, 2025 | Change |
|---|---|---|---|
| Owed (gross receivable) | $10.7B | $12.0B | +12.1% |
| Allowance for doubtful accounts | $6.0B | $10.0B | +66.7% |
| Net, expected to be collected | $4.7B | $2.0B | -57.4% |
| Expected share of amount owed | 43.9% | 16.7% | -27.3 points |
An allowance is an accounting estimate, not forgiveness. Nothing was cancelled: ESDC says all debtors are expected to repay, because each overpayment is a debt owed to the Crown. What changed is the collection plan. The CRA focuses on accounts more likely to be resolved, leans on income tax set-offs, and does not target low-income, insolvent or deceased people; deceased, insolvent and vulnerable debtors sit inside the $10.0 billion allowance. No penalties or interest are added (ESDC). Formal write-offs are tiny by comparison: $17.5 million of COVID benefit debts in 2024-25.
Other counts exist, and they do not match. In a secondary report, The Canadian Press quoted a CRA spokesperson in December 2025: the agency was owed $10.35 billion, and by November 30, 2025, close to 1.4 million people had repaid about $3.3 billion of the $83.5 billion in COVID benefits disbursed. We found no published CRA table behind those figures, and their date and scope differ from ESDC’s. Earlier, in 2022, the Auditor General found $4.6 billion overpaid to ineligible recipients (as summarized by the House Public Accounts committee).
Insight 02
The largest clawback is the OAS recovery tax: $3.6 billion in 2024-25, about 10 times EI repayments
The CRA reports three benefits it recovers through the income tax return. In 2024-25 the Old Age Security recovery tax brought back $3,585 million, up 20.5%, against $365 million of Employment Insurance benefit repayments and $41 million of Canada Recovery Benefit clawbacks. OAS was 89.8% of the $3,991 million total (CRA financial statements, our calculation).
| Recovery, year | $ millions |
|---|---|
| OAS recovery tax, 2024-25 | |
| OAS recovery tax, 2023-24 | |
| EI benefit repayment, 2024-25 | |
| EI benefit repayment, 2023-24 | |
| Canada Recovery Benefit, 2024-25 | |
| Canada Recovery Benefit, 2023-24 |
Source: CRA, 2024-25 financial statements, administered activities. The CRA reports only recoveries assessed through the individual income tax system. Bar widths are relative to the largest value.
The OAS figure is not an overpayment. It is a clawback by design: a pensioner repays 15% of net world income above a threshold, which was $93,454 for the 2025 income year and is $95,323 for 2026 (ESDC, CRA). On ESDC’s own example, $100,000 of income in 2025 means $981.90 repaid over July 2026 to June 2027, deducted monthly from the pension.
Overpayments show up in a different ledger: what ESDC gives up on. It wrote off, forgave or remitted $641.1 million in 2024-25, up 7.9% from $594.1 million. OAS overpayment remissions rose from $35.8 million to $166.1 million, which ESDC attributes mainly to clean-up before a move to a new benefit system. EI fraud is a separate line: $279.2 million in fraudulent EI overpayments were established in 2024-25 and $59.5 million recovered in the same year (ESDC).
| ESDC debts written off, forgiven or remitted | 2023-24 | 2024-25 |
|---|---|---|
| Student financial assistance forgiveness | $247.5M | $244.9M |
| OAS overpayment remissions | $35.8M | $166.1M |
| EI overpayment and penalty write-offs | $71.0M | $93.3M |
| CPP Disability overpayment remissions | not broken out | $84.9M |
| COVID benefit write-offs (FAA s. 25(1)) | not broken out | $17.5M |
| Total, all categories | $594.1M | $641.1M |
Insight 03
Your refund and your CGEB can pay almost any government debt; your CCB pays only child-benefit debt
The CRA calls it an offset, or set-off: if you owe, it may apply your tax refund and federal credits to the debt before any money reaches you. Its offset table lists six kinds of individual debt. A tax refund and credits other than child benefits, including the Canada Groceries and Essentials Benefit (CGEB, formerly the GST/HST credit), can be applied to all six, from ESDC debts such as EI, CPP, OAS and student loans to provincial and territorial debts (CRA).
The Canada child benefit (CCB) is fenced off. The CRA “will not apply CCB payments to other tax or government debt” (CRA, balance owing page). It can keep all or part of future CCB only to recover a child-benefit overpayment. COVID benefit payments, by contrast, could only be applied to COVID debt.
| Debt you owe | Tax refund | CGEB and other non-child credits | Child benefits (CCB) | COVID benefit payments |
|---|---|---|---|---|
| Individual income tax | Yes | Yes | No | No |
| COVID benefit overpayment (CERB, CRB) | Yes | Yes | No | Yes |
| Child benefit overpayment | Yes | Yes | Yes | No |
| CGEB or other credit overpayment | Yes | Yes | No | No |
| Family orders and agreements | Yes | Yes | No | No |
| Other government debt (ESDC: EI, CPP, OAS, student loans; provincial and territorial) | Yes | Yes | No | No |
The table leaves out how much the CRA keeps. It publishes no fixed percentage: its pages say it may keep “all or a portion” of a payment until the debt is resolved. Offsets also continue while you are on a payment arrangement (CRA). The one mercy for families is interest. The CRA does not charge it on debts from overpaid CCB or personal GST/HST credit, so those balances do not grow, whereas most late tax payments do attract interest.
Unpaid debts can escalate. The CRA generally tries at least once to give a verbal legal warning and sends one written warning; after that it can garnish income and accounts or put a lien on assets, and the warning stays valid for 180 days (CRA). Collection has time limits, but they restart easily.
| Type of debt | Limitation period starts | Length |
|---|---|---|
| Individual income tax | 91st day after a notice of (re)assessment | 10 years |
| COVID benefits for individuals | Date of the decision or notice of redetermination | 6 years |
| Employment Insurance | Day the overpayment happens | 6 years |
| Canada Student Loans | Day the loan comes into effect | 6 years, with exceptions |
| CPP and OAS | Not applicable | No limitation period |
A voluntary payment, a written acknowledgment of the debt, or a set-off of your refund or CGEB all restart the clock (CRA). Our reading: a debt that is offset every year is unlikely to age out. The CRA’s page does not list CCB or CGEB overpayments, so we do not state which period applies to them.
Insight 04
A two-child family at $50,000 loses 18.5 cents of benefits for each extra dollar of income
Not every clawback arrives as a debt. Income-tested benefits shrink as income rises, and when two phase-outs overlap, the combined rate gets steep. For the July 2026 to June 2027 benefit year, based on 2025 adjusted family net income, the CCB falls by 13.5% of income above $38,237 for a family with two children (CRA). The CGEB, by our reading of the CRA’s payments chart, falls by 5% of family net income above $46,432; the CRA does not state that rate in words.
Take an illustrative couple with two children under six and $50,000 of adjusted family net income. Their CCB is $16,314 less 13.5% of $11,763, or about $14,726 a year. Their CGEB is $1,358 less 5% of $3,568, or $1,179.60, which matches the CRA chart. Each extra dollar of income costs 13.5 cents of CCB plus 5 cents of CGEB, or 18.5 cents, before income tax, payroll deductions and provincial phase-outs (our calculation).
$185Federal CCB and CGEB lost the following benefit year on an extra $1,000 of income, for our illustrative two-child family at $50,000 (our calculation).
The rate climbs with family size. With three children the CCB reduction is 19% and with four or more it is 23%, so the same overlap means 24 or 28 cents per dollar in that band. Above $82,847 the CCB rates drop to 3.2%, 5.7%, 8% and 9.5% plus fixed base amounts. The CGEB’s 25% increase for five years from July 2026 also stretches the overlap: by our arithmetic, the two-child couple’s CGEB now reaches zero at about $73,600, consistent with the CRA chart.
Because benefits use last year’s income, the cost lands a year later. COVID showed how. Since CERB and the recovery benefits counted as income, the Parliamentary Budget Officer estimated that 1.67 million families had their CCB reduced by an average of $535 in 2021-22, 791,000 families by $606 in 2022-23 and 596,000 families by $133 in 2023-24 (as cited in an ESDC briefing note). The PBO put the total at $1.1 billion to $1.4 billion over the three years, depending on the scenario. Families with 2020 net income below $32,028 still received the maximum CCB for 2021-22, ESDC noted.
Insight 05
Most CCB and CGEB overpayments start with a household change the CRA relies on you to report
A CCB or CGEB overpayment begins with a recalculation. The CRA’s benefit pages list the events below, and most are changes at home it learns about only when you report them or file; on a child leaving your care, it says telling it right away “will avoid overpayments”. That reading is ours: the CRA publishes no count of overpayments by cause, so the order is not a ranking.
| Trigger | What the CRA says |
|---|---|
| Not filing a return | You and your spouse must file every year, even with no income, or payments stop |
| Marital status change | You must tell the CRA; benefits are recalculated on family income |
| Income reassessment | A reassessment of either spouse’s return that changes family income resets the benefit |
| Child leaves your care | Entitlement stops the month after the child is no longer in your care |
| Custody change | Shared custody means each parent gets 50%; each must report the new arrangement immediately |
| Residency change | Leaving or not meeting residency rules stops eligibility |
| Death of a recipient | Payments sent after a death must be returned |
The Canada workers benefit (CWB) has its own trap. Up to half of it can be paid in advance, and the CRA says only death, incarceration or emigration change those advances during the year. If the advances turn out to exceed what you were entitled to, the overpayment is taken from that year’s tax refund. For 2026 the basic CWB pays up to $1,665 for single people and $2,869 for families, and begins to phase out at $27,392 and $31,251 of adjusted net income; amounts differ in Alberta, Quebec and Nunavut (CRA). Timing details are in our Canada workers benefit payment dates for 2026.
What this data can’t tell you
- The CRA does not publish totals for CCB or GST/HST credit (CGEB) overpayments. They are not broken out in its financial statements, so we cannot say how much families owe or repay.
- The COVID repayment counts (1.4 million people, $3.3 billion) and the $10.35 billion owed come from a CRA spokesperson as reported by The Canadian Press, a secondary source. ESDC’s $12.0 billion and the CRA statements’ $11,024 million cover slightly different programs. The three are not directly comparable.
- The CRA’s recovery figures cover only amounts assessed through the income tax system; recoveries determined by other departments, such as ESDC’s own offsets against program benefits, are not in them.
- The 18.5-cent rate is an illustration for one family type. It excludes income tax, provincial benefits and the CWB, whose phase-out rate is not in the sources we used.
- The PBO’s CCB estimates are model results reported in an ESDC briefing note; we did not have the PBO report itself.
Methodology and sources
COVID overpayment figures are from two ESDC Question Period notes on the Public Accounts (received December 9, 2024 and October 10, 2025); write-off and fraud figures are from two further ESDC notes received October 23, 2025. Expected shares are net receivable divided by gross: $4.7B / $10.7B = 43.9% and $2.0B / $12.0B = 16.7%. Changes: gross ($12.0B – $10.7B) / $10.7B = +12.1%; allowance ($10.0B – $6.0B) / $6.0B = +66.7%; net ($2.0B – $4.7B) / $4.7B = -57.4%. The CRA statements’ rate is $1,561M / $11,024M = 14.2%. Recovery changes use the CRA’s 2024-25 statement of administered expenses and recoveries: OAS $3,585M / $2,974M = +20.5%; EI $365M / $304M = +20.1%; CRB $41M / $27M = +51.9%; total $3,991M / $3,305M = +20.8%; OAS share $3,585M / $3,991M = 89.8%; OAS to EI $3,585M / $365M = 9.8 times. Write-offs: $641.1M / $594.1M = +7.9%. Chart bar widths are each value divided by $3,585M, rounded. The phase-out illustration uses CRA amounts for July 2026 to June 2027: CCB = 2 x $8,157 – 13.5% x ($50,000 – $38,237) = $14,725.99; CGEB maximum for a couple with two children = $890 + 2 x $234 = $1,358; CGEB = $1,358 – 5% x ($50,000 – $46,432) = $1,179.60, matching the CRA payments chart. The 5% CGEB rate is derived from that chart: ($890 – $711.60) / ($50,000 – $46,432) = 5.0%. Combined marginal loss: 13.5 + 5 = 18.5 cents per dollar (two children), 19 + 5 = 24 cents (three), 23 + 5 = 28 cents (four or more), valid while income is between $46,432 and $82,847 and the CGEB has not reached zero; $1,000 x 18.5% = $185. The CGEB end point for two children is $46,432 + $1,358 / 5% = $73,592. Offset rules, interest, limitation periods and legal warnings are from CRA web pages read on October 3, 2026.
- ESDC, Question Period note PA_010_20260106, COVID-19 benefit overpayments 2024-25 (October 2025)
- ESDC, Question Period note PA20232024_010_20260106, COVID-19 benefit overpayments 2023-24 (December 2024)
- ESDC, Question Period note PA_008_20260106, debts written off, forgiven or remitted (October 2025)
- ESDC, Question Period note PA_009_20260106, protecting public funds from fraud (October 2025)
- ESDC, Question Period note EWDDI_DEC2022_001, interaction between the CCB and CERB (November 2022)
- Canada Revenue Agency, 2024-25 financial statements, administered activities
- House of Commons Standing Committee on Public Accounts, Report 35, summary of Auditor General Report 10 (2022)
- CRA, Balance owing: benefits overpayment (July 2026)
- CRA, How we automatically apply credits and refunds to your debt (September 2026)
- CRA, Interest and penalties on late or incorrect payments (January 2026)
- CRA, How long a debt can be collected by the CRA (September 2026)
- CRA, If you don’t pay your debt (September 2026)
- CRA, Arrange to pay your debt over time (September 2026)
- CRA, Canada child benefit: how much you can get (June 2026)
- CRA, Canada child benefit: keep getting your payments (August 2026)
- CRA, Canada Groceries and Essentials Benefit: how much you can get (July 2026)
- CRA, CGEB payments chart, July 2026 to June 2027
- CRA, CGEB: reasons for stopped or changed payments (June 2026)
- CRA, Indexation adjustment for personal income tax and benefit amounts (March 2026)
- CRA, Canada workers benefit: how much you can get (April 2026)
- Government of Canada, Old Age Security pension recovery tax (September 2026)
- CRA, Income tax objections decision tree
- CRA, Cancel or waive penalties and interest (September 2026)
- CRA, Remission (July 2024)
- The Canadian Press via BNN Bloomberg, CRA says it’s owed more than $10 billion in COVID-19 benefit payments (December 31, 2025), secondary source
Frequently asked questions
How much COVID benefit money does the government still expect to collect?
The government expected to collect $2.0 billion of the $12.0 billion in CERB, EI-ERB and CRB overpayments owed at March 31, 2025, after a $10.0 billion allowance for doubtful accounts (ESDC). The allowance is an accounting estimate, not forgiveness: ESDC says the debts are still owed and all debtors are expected to repay.
Can the CRA take my tax refund for a CCB overpayment?
Yes: the CRA can keep all or part of three payments, your tax refund, your CGEB and your future CCB, until a CCB overpayment is repaid, and it publishes no fixed percentage it will withhold (CRA). The reverse does not hold: the CRA will not apply CCB payments to tax or other government debt.
Does the CRA charge interest on CCB overpayments?
No, the interest on these debts is 0%: the CRA says interest is not applied to debts from overpaid Canada child benefit or personal GST/HST credit, now the CGEB (CRA). COVID benefit overpayments also carry no penalties or interest, according to ESDC, while most late tax payments do attract interest.
How long can the CRA collect a CERB overpayment?
The collection limit for COVID benefits for individuals is 6 years from the date of the decision or notice of redetermination (CRA). A voluntary payment, a written acknowledgment of the debt, or the CRA applying your refund or CGEB to the debt restarts that clock, according to the CRA.
What is the OAS clawback threshold for 2026?
The OAS recovery tax threshold for the 2026 income year is $95,323, and pensioners repay 15% of net world income above it (ESDC). For 2025 income the threshold is $93,454, with repayments deducted from OAS payments from July 2026 to June 2027 (ESDC).
Cite this report
NotchUp Research, “CRA Benefit Clawbacks 2026: The Numbers” (October 2026), https://notchup.app/learn/cra-benefit-clawbacks-2026/. Figures may be reproduced with attribution.
