Unlocking A Locked-In Account In Ontario (LIRA, LIF or LRIF)

Any money transferred from an Ontario registered pension plan into an Ontario locked-in account (LIRA, LIF or LRIF) must remain “locked-in” and can only be used to provide retirement income. Here are the exceptions which provide special access to locked-in money:

Financial Hardship

Under the new rules (as of January 1, 2014), there are four categories of financial hardship:
  1. low expected income;
  2. payment of first and last months’ rent;
  3. arrears of rent or debt secured on a principal residence (such as a mortgage); and
  4. medical expenses.

Each application for financial hardship unlocking must be made based on one of these categories.  The financial institution is responsible for answering questions and providing information to owners of locked-in accounts, relating to their applications.

The Financial Services Commission of Ontario is no longer responsible for reviewing or processing applications for financial hardship unlocking.
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Non-Financial Hardship

  • your life expectancy has been shortened to two years or less
  • you are at least 55 years old and the total value of the funds in all of your locked-in accounts is than less 40% of the Year’s Maximum Pensionable Earnings (YMPE).  e.g., $21,000 for applications signed in 2014
  • amounts transferred into your locked-in account exceed federal Income Tax Act limits
  • you are a non-resident of Canada and 24 months have passed since the date of your departure from Canada
  • after December 31, 2010, you transferred money into an Ontario life income fund that is governed by the requirements of Schedule 1.1 (NEW LIF) and, within 60 days of this transfer, you want to withdraw or transfer up to 50% of the total money that was transferred to the Schedule 1.1 (NEW LIF)

Disclaimer: You should consult with your Investment Adviser before making any investment decisions.