• You can access funds in a locked-in retirement account (LIRA) or life income fund (LIF)
    • once a year,
    • in any given category,
    • based upon specific criteria
  • Be informed – there are tax implications; and your funds will no longer be protected from creditors.
  • Seek financial advice about your investment options
  • Learn how you can benefit from the Government of Ontario’s and the Government of Canada’s financial supports.

Criteria to unlock

The Pensions Benefit Act sets out four categories of financial hardship under which you can unlock your pension funds held in a locked-in retirement account (LIRA) or life income fund (LIF). You can unlock for any of these reasons and you can unlock for a combination of reasons.

The four categories are:

  • medical expenses,
  • arrears of rent or debt secured on a principal residence (such as a mortgage),
  • first and last months’ rent, and
  • low expected income. 

One application per year, per category, per account 

You can make one application for financial hardship withdrawal, for each category, under each account, once in a calendar year.  You must submit each application on a separate FSRA form.

There is one exception. Under the medical expenses category, you may apply each calendar year, for each account, for each person who is suffering from an illness or physical disability if that person is:

  • the owner(former pension plan member who has transferred the value of their pension entitlements out of their plan and into an Ontario LIRA or LIF),
  • the owner’s spouse, or
  • a dependent of the owner or the owner’s spouse.

You can apply to unlock under multiple financial hardship categories. For example, an individual who is unlocking due to rent arrears may also qualify for unlocking due to low expected income.

Withholding Tax and Financial Institution Fees

Canada Revenue Agency (CRA) will include your withdrawn funds in your taxable income for the year in which you withdrew them.

Your financial institution will also withhold a percentage for federal income tax and remit that amount to CRA. Depending on your account, they may also apply withdrawal fees.

Loss of Creditor Protection

The Pensions Benefits Act protects money held in locked-in accounts from creditors. Your money will no longer be protected, once you withdraw it and it is in your hands. This applies to all withdrawals including money you withdraw for financial hardship.

Submitting your application

Complete and submit the appropriate FSRA form to your financial institution.  Your application must be in one of the financial hardship categories.  While you can apply under different categories, you must use a separate form for each category. All required forms are available on the FSRA website.

Financial Hardship Unlocking Forms

  1. Medical expenses,
  2. Arrears of rent or debt secured on a principal residence (such as a mortgage),
  3. First and last months’ rent, and
  4. Low expected income

Changing how you invest your funds

Typically, you can select the investments in your locked-in retirement account (LIRA), but there may be restrictions. Seek financial advice about your investment options.