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Financial Hardship Reasons for Unlocking Locked In RRSP - Withdrawal of Pension Funds | Canada

Locked-In RRSP Retirement Funds Can Be Unlocked and Withdrawn for Financial Hardship Reasons in Some Provinces

How to unlock locked-in RRSP funds for financial hardship reasons in Canada.If you’re thinking of withdrawing money from your locked-in RRSP or pension funds to help you during a financial hardship, it would be best to speak with a Credit Counsellor first. Other options may be available to you so that you won’t need to use these funds. If, however, you’d like to look into the reasons that allow you unlock and withdraw money from your Locked-in Retirement Account (LIRA), Life Income Fund (LIF), or Locked-in Retirement Income Fund (LRIF), we’ve got all the financial hardship reasons listed below.

Before we get to that, though, we should mention one important detail. To unlock pension funds, they must first be transferred out of an employer’s Registered Pension Plan (RPP) and into a LIRA or LIF in your name, and you typically must also be no longer employed by the company who created the pension.

Below are reasons that permit you to unlock locked-in pension funds. Every locked in pension is locked and preserved for your retirement under the legislation of either a specific province or under federal legislation. You’ll have to check your pension documentation to see which provincial legislation it is locked in under (the financial institution that holds the funds will also have this documentation if you can’t find yours). Beside each reason below are the provinces (or federal legislation) that permit you to withdraw funds for that reason.

Reasons to Unlock Locked-In Pension

Provinces That Allows for the Reason

Low Income - You expect your income to drop to a very low level

Ontario, BC, Alberta, SaskatchewanNova Scotia, NewfoundlandFederal

Potential Foreclosure

Ontario, BC, Alberta, Nova Scotia

Eviction for Being Behind on Rent or Mortgage Payments

Ontario, BC, Alberta, SaskatchewanNova Scotia, Newfoundland

First Month’s Rent and Security Deposit

Ontario, BC, Alberta, Saskatchewan, Newfoundland

High Medical or Disability Related Costs - You need money for medical expenses that are not covered by a medical plan or any other source, or you need to pay for renovations to your home that are required due to illness or disability.

Ontario, BC, Alberta, SaskatchewanNova Scotia, NewfoundlandFederal

No Longer a Canadian Resident

Ontario, Quebec, BC, Alberta, Manitoba, Saskatchewan, New BrunswickNova Scotia, NewfoundlandFederal

Shortened Life Expectancy

Ontario, Quebec, BC, Alberta, Manitoba, Saskatchewan, Nova Scotia, New Brunswick, NewfoundlandFederal

50% Unlocking - Can do this one time if you are 55 years old or older

Alberta, Manitoba, Federal

Small Balance Unlocking - If the balance of your locked-in funds are below a certain amount, you can unlock and withdraw the money

Ontario (you must be at least 55 and the balance less than $25,960), BC (balance must not exceed $12,980), Alberta (balance must not exceed $12,980 if you're under 65), Manitoba (balance cannot exceed $25,960 after a future value calculation is done), Saskatchewan (balance must not exceed $12,980), New Brunswick (withdrawal formula is based on your age), NewfoundlandFederal (balance must be less than $12,980)

Age 65 & Balance is Small

Quebec (balance can’t exceed $25,960), BC (balance can’t exceed $25,960), Alberta (balance can’t exceed $25,960), Nova Scotia (amounts under $32,450)

Note: All numbers listed in the table above are for 2022 (they go up a little every year)

Provincial Financial Hardship Unlocking (FHU) programs are intended to provide a one-time source of financial relief to locked-in account owners who are experiencing financial hardship.

The financial institution holding the locked-in retirement funds must review your situation to ensure it meets the requirements of the provincial legislation that govern their locked-in funds. The government is not involved in the decision to unlock your funds. All they have done is create the legislation for your province, and then it’s up to your financial institution to follow the legislation.

You don’t have to provide information about your other assets to qualify. All you need to fill out are the specific documents that apply to the reason why you are applying to withdraw your locked-in funds. There is often no charge for applying. However, provincial legislation does not prevent your financial institution from charging you a fee.

How to Find the Best Help & Assistance

For all situations involving financial hardship – especially withdrawing locked-in funds – the ideal person to talk to first is a non-profit Credit Counsellor. They often find that many people make a difficult situation worse for themselves by taking actions that seem right at the time, but in the end only end up leaving them in a worse financial position. Experienced, well trained Credit Counsellors are true financial hardship experts. They can guide you through all your options and help you figure out what steps would be in your best interest and which would not. The nice thing is that an appointment with a non-profit Credit Counsellor is usually free, and they’re able to provide you with an objective perspective and very helpful information. To find a good non-profit credit counselling organization near you, click here.


Links to Provincial Rules for Unlocking Funds Due to Financial Hardship

Ontario Rules for Financial Hardship Unlocking

Ontario Rules for Unlocking Funds when there is No Hardship

BC Rules for Unlocking a Pension

Alberta Rules for Unlocking Funds Due to Financial Hardship

Manitoba Rules for Unlocking a Pension

Saskatchewan Rules for Unlocking a Pension

Quebec Rules for Unlocking a Pension

Nova Scotia Rules for Unlocking Funds Due to Financial Hardship

Nova Scotia - More Information About Unlocking Funds

New Brunswick Information About Unlocking Funds

Newfoundland - Eligibility for Unlocking Locked-In Retirement Savings for Financial Hardship

Prince Edward Island - Does not have its own laws and regulations governing pension plans

Federal Unlocking Options & Information for Financial Hardship


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We're sorry to hear of the tragedy and immense challenges you've experienced. We'd suggest you review the rules that govern your locked-in funds to see if you can withdraw more funds this year. In Ontario for example, they have four permittable reasons for unlocking funds. However, they only allow one withdrawal per calendar year for each reason. So for someone who lives in Ontario and already withdrew funds this year under the "Low Expected Income" reason, they would not be able to withdraw money for that reason again until January 1 of next year. However, if that person was struggling to pay their rent or mortgage, that is another valid reason to withdraw funds (but only once per calendar year). So if your province limits hardship withdrawals to once per year for your original reason, then see if another reason will work for you. Speak with the financial institution that holds your locked-in funds and explain your situation to them. Hopefully they can help you look carefully at the situation and see if they can find some way to work things out.