Final answer:
a. Michelle's monthly OAS clawback is $1,853.25. b. The clawback period is 12 months. c. Her new OAS payment would be $5,846.75. d. Her entire OAS benefit would be clawed back at an income level of $22,239.
Step-by-step explanation:
a. To calculate Michelle's monthly OAS clawback, we need to determine the excess income over the minimum income threshold. Excess income = Total income - Minimum income threshold = $104,000 - $81,761 = $22,239. The monthly OAS clawback is calculated by dividing the excess income by 12: $22,239 / 12 = $1,853.25.
b. The clawback period is the number of months it takes for Michelle's OAS pension income to be fully clawed back. It can be calculated by dividing the excess income by the monthly clawback amount: $22,239 / $1,853.25 = 11.99 months. Since we cannot have a fraction of a month, the clawback period is 12 months.
c. Assuming her OAS payment does not increase with inflation, her new OAS payment would be the original payment minus the clawback amount: $7,700 - $1,853.25 = $5,846.75.
d. To find the level of 2022 income at which Michelle's entire OAS benefit is clawed back, we can set the excess income equal to the OAS pension income: Excess income = OAS pension income. Substituting the values: $22,239 = $7,700. Solving for the income level, we find that she would have her entire OAS benefit clawed back when her total income reaches $22,239.