Application for Financial Hardship Unlocking for First and Last Months’ Rent
- You must have money in an Ontario locked-in account that you own
- Your money must be subject to the Ontario Pension Benefits Act
- Use Form FHU 3 Application for First and Last Months’ Rent
- One application per year, per type of unlocking, per account
- Deadlines for the application
- Minimum and maximum amounts you may apply for
- Withholding tax and other deductions
- Eligibility for other government benefits
- Loss of creditor protection
- General information about Form FHU 3
- Part 1: information about the owner of the Ontario locked-in account
- Part 2: first and last months' rent for a main home
- Part 3: certification by the owner of the locked-in account
- Part 4: consent of the owner’s spouse to the application
This User Guide helps you apply to unlock and take out money from your Ontario locked-in account (locked-in retirement account (LIRA), life income fund (LIF), locked-in retirement income fund (LRIF)) based on financial hardship to pay first and last months’ rent to obtain your main home.
This User Guide is only a guideline. If this User Guide conflicts with the rules in the Financial Services Regulatory Authority of Ontario Act, 2016, (FSRA Act), the Pension Benefits Act, or the regulations made under either of them, the FSRA Act, Pension Benefits Act or regulations govern.
There are four types of financial hardship unlocking allowed for Ontario locked-in accounts:
- for medical expenses;
- for arrears of rent or default of debt secured on a main home (such as a mortgage);
- for payment of first and last months’ rent for a main home; and
- for low expected income
This User Guide is for unlocking to pay the first and last months’ rent . If you want to apply for another type of financial hardship unlocking, you must apply separately using a different form. You can find User Guides for the different types of financial hardship unlocking on the Financial Services Regulatory Authority (FSRA) website.
You must apply to the financial institution that holds and administers your locked-in account. Your financial institution could be one of the following:
- a bank
- a life insurance company
- a credit union
- a caisse populaire
- a trust company
If you have invested the money in your locked-in account through a financial advisor, you should ask your advisor if you should:
- make your application through them; or
- make your application directly to the financial institution that holds your locked-in account
You cannot make your application to FSRA.
Your financial institution is responsible for answering questions about your locked-in account and your unlocking application.
There are three different types of Ontario locked-in accounts:
Your money must be in one of these accounts. If your money is still in your pension plan, you cannot take it out due to financial hardship.
You must be the owner of the locked-in account to apply for financial hardship unlocking. The locked-in account must be in your name, not in your spouse’s name. If you are not sure, ask your financial institution or financial advisor.
The money in your locked-in account must be subject to the Ontario Pension Benefits Act. It cannot be subject to federal pension law or the pension law of another province. If the money is not subject to the Ontario Pension Benefits Act your application will be refused. Ask your financial institution whether your locked-in account is subject to the Ontario Pension Benefits Act.
You must apply to your financial institution using the application forms approved by the FSRA. The application for first and last months’ rent must use the Form FHU 3 for the year you apply. If you apply in 2024, use the 2024 form. You cannot use a previous year’s form.
Please contact your financial institution for an application form. Forms and other information about financial hardship unlocking can also be found on FSRA’s website.
For any locked-in account you own, you can apply one time during the calendar year to unlock money due to financial hardship for payment of first and last months’ rent.
There are a number of important deadlines to be aware of:
- 60 day time limit for submitting the application: Once you sign the application (and your spouse signs the consent, if applicable), you have 60 days to submit it to your financial institution. If you submit it after 60 days from the date you signed it, you will have to fill out another application.
- 30 day time limit for payment by financial institutions: Your financial institution must review your application to see if it meets the requirements to unlock money due to financial hardship for payment of first and last months’ rent for a main home. If the requirements are met, your financial institution must:
- approve the application; and
- make payment to you within 30 days from the day it received the completed application.
For all applications, the minimum amount you must apply for is $500.00. If you apply for less than $500.00, your financial institution will refuse your application.
The maximum amount you can apply to unlock for first and last months’ rent to obtain your main home is described later in this User Guide. You cannot apply for an amount greater than the maximum amount. If you do apply for an amount greater than the maximum, your financial institution should advise you to revise your application.
Your financial institution is not permitted to pay you an amount greater than the maximum amount allowed.
Please see Question 3 in Part 2 of this User Guide below for more information about the maximum amount you may apply to unlock for first and last months’ rent for a main home.
The money must be paid to you in one lump sum. It cannot be paid monthly or in any other manner. It cannot be transferred to another tax-deferred account, such as:
- an RRSP
- an RRIF
The amount you are approved to unlock will be reduced by income tax. This is required by the Canada Revenue Agency (CRA).
Your financial institution may also charge an administrative fee for your application, which will be deducted from the amount paid to you.
For example, you apply and are approved to unlock $2,000.00. Your financial institution must deduct 10 percent ( $200.00), for income tax and pay it to the CRA. If your financial institution charges you a $50.00 fee, that amount will also be deducted. Therefore, you end up receiving $1,750.00 in this example.
To receive a greater amount in cash than what you would have received after deductions, apply to take out a greater amount. But you cannot apply to take out an amount greater than:
- the maximum amount allowed; or
- the amount in your account.
When you take out money from your locked-in account, that money could be considered as income. This could affect your eligibility for benefits under a government program, such as social assistance. Contact the government agency or department that administers the program or provides these benefits if you have questions about the impact on your benefits.
Money in your locked-in account cannot be seized by your creditors. If you take out money from your locked-in account that money is no longer protected and may be seized by your creditors.
Your financial institution must tell you the purpose for collecting, using or disclosing any of your personal information.
To unlock money for first and last months’ rent, you may make one application during a calendar year.
The residence that is being rented must be intended to be occupied by the owner as their main home (main place they live). Either you or your spouse may be the person who requires the money to pay first and last months’ rent (i.e., whose name is or will be on the lease).
Example: Lee owns a locked-in account. Lee’s spouse, Kay, seeks to rent a house that will be the main home for both of them. Kay arranges the lease and it will be in their name. Lee’s application should qualify because the house will be Lee’s main home.
An application is considered to have been made in the year the financial institution receives the completed application.
You may make more than one application for a withdrawal from the same locked-in account under different types of financial hardship unlocking in the same year but you must use different forms.
Question 1: Fill in the information about yourself in each box.
Question 2: Fill in the name of the financial institution that holds your locked-in account. This may be a bank, insurance company, or credit union. Fill in the number of the account. This is the number of the account that you want to take out money out of.
Information about your spouse
Question 3: Fill in the information about your spouse (if applicable) in each box.
A “spouse” is defined in the Pension Benefits Act as either of two persons who:
- are married to each other, or
- are not married to each other and are living together in a conjugal relationship,
- continuously for a period of not less than three years, or
- in a relationship of some permanence, if they are the parents of a child as set out in section 4 of the Children’s Law Reform Act.
If you have a spouse and you are living separate and apart from your spouse due to a breakdown in your spousal relationship, then:
- your spouse is not required to consent to your unlocking application; but
- you must still fill in the information about your spouse in question 3.
Spouses living in different residences may still be spouses for the purpose of this application. If your spouse is living elsewhere because of:
- their work;
- because they are looking after a relative or friend;
- for health reasons; or
- for other reasons that are not related to your spousal relationship,
that does not mean you are living separate and apart due to a breakdown in your spousal relationship.
It is possible that you may have “more than one spouse”. That is, you could be separated from your spouse while still married. At the same time, you could be living common law with another person who meets the definition of spouse. If that is your situation, you should fill in the information about the spouse you are living with when you apply. In this example, this is your common law spouse. The money can only be unlocked and taken out if that person provides their consent to your application (see Part 4).
Question 1: Other than this Application, have you applied during 2024 to take out money from this locked-in account for first and last months’ rent for a main home? If you answered ‘yes’, you cannot apply again under this category this year.
Question 2: What is the maximum amount you can take out? The maximum amount you can unlock and take out is the smaller of the amounts entered in boxes 2a and 2b.
The amount in box 2a for 2024 is $3,425.
In box 2b, fill in the total amount required for the first and last months’ rent for a main home.
Enter the smaller amount in box 2c. This is the maximum amount that you may apply to take out under this category.
Question 3: How much money are you applying to take out from this locked-in account?
You do not have to apply for the maximum amount you are entitled to take out.
You cannot apply for an amount that is:
- greater than the amount in your locked-in account as of the date you apply;
- greater than the maximum amount you are allowed to take out (box 2c); or
- less than $500.00.
Remember that the amount you apply for will be reduced by withholding tax. It may be reduced further by an administrative fee.
Question 4: What is the address of the main home you and your spouse (if applicable) want to rent? Fill in the information about the home you want to rent.
If you have a copy of the rental agreement, include it with your application. However, your application can be processed if there is no rental agreement. A financial institution cannot require you to provide a rental agreement.
You must sign and date the Certification in Part 3. There is no requirement for a witness to your signature.
Once you sign the application, you have 60 days to give it to your financial institution.
Certification regarding your spousal status:
You must certify your spousal status on the date you sign the application. In Part 3 of the application form, you must check only one of four boxes:
- You have a spouse and your spouse consents to taking out money from your locked-in account.
(If you select this option, you will need your spouse to complete Part 4.)
- You have a spouse, but you and your spouse are living separate and apart due to a breakdown in your spousal relationship.
(If you select this option, your spouse is NOT required to complete Part 4.)
- You have a spouse, but none of the money in your locked-in account is derived, directly or indirectly, from a pension benefit provided in respect of your past or current employment. This applies if all the money in your locked-in account did not come from your own pension plan, but came from the pension plan of your former spouse.
(If you select this option, your spouse is NOT required to complete Part 4.)
For example, Jordan is a member of a pension plan and divorces Chris. As part of the divorce, Jordan pays a portion of Jordan’s pension benefits to Chris. Chris gets an Ontario locked-in account to hold that pension money. Chris later marries Avery. Chris then applies to unlock and take out money from Chris’s locked-in account for financial hardship.
Since the money came from Jordan’s pension plan, Chris’s current spouse Avery is not required to consent to Chris’s application. In Part 3 of the application form, Chris should check the box that says “I have a spouse, but none of the money in my locked-in account is derived, directly or indirectly, from a pension benefit related to my past or current employment.”
- You do not have a spouse.
By signing the application, you also certify that:
- all the information in the application and any accompanying documents is accurate and complete; and
- you have not previously applied in 2024 to take out money from this locked-in account for first and last months’ rent for a main home.
If you have a spouse on the day you sign the Certification in Part 3 of the application, you may only take money from your locked-in account if your spouse consents to the application, unless:
- you and your spouse are living separate and apart due to a breakdown in your spousal relationship; or
- all the money in your locked-in account came from the pension plan of your former spouse (see explanation in Part 3 above).
If your spouse consents, your spouse must fill in Part 4 of the application and sign and date it. There is no requirement for a witness to your spouse’s signature.
If your spouse is not sure about the legal consequences of signing the consent, they should seek legal advice. Your spouse does not have to sign. But if spousal consent is required and your spouse does not consent, the financial institution must refuse your application.
Your spouse must indicate that they understand that:
- you (the owner of the locked-in account) are making an application to unlock and take out money from the account;
- if the circumstances require spousal consent, you cannot take out the money from the locked-in account without your spouse’s consent;
- as long as this money is kept in the locked-in account, your spouse may have a right to a share of this money (this would happen if there is a breakdown in your spousal relationship or if you die); and
- if any money is taken out from the locked-in account, your spouse may lose any right that they have to a share of the money taken out.
If the financial institution is not satisfied that your spouse understands what they are signing, it may refuse the application. The financial institution may request proof of your spouse’s identity and spousal status.