- The money must be subject to the PBA
- One application per year, per category, per account
- Key dates and timelines
- Minimums and maximums
- When must an application be refused
- Form of payment
- Withholding tax and financial institution fees
- Eligibility for other government benefits
- Loss of creditor protection
- Keeping track of applications
- Part 1: Information about the owner of the locked-in account
- Part 2: Category of application
- Part 3: Certification by the owner of the locked-in account
- Part 4: Spousal consent
Introduction and overview
This User’s Guide helps financial institutions that must process applications for withdrawals from locked-in accounts because of financial hardship.
This User’s Guide is only a guideline. If this guideline conflicts with the rules in the Financial Services Regulatory Authority of Ontario Act, 2016, (FSRA Act), the Pension Benefits Act (PBA) or Regulation 909 (the Regulation), the FSRA Act, PBA or Regulation govern.
Financial institutions which hold and administer their clients’ locked-in accounts must review applications for a withdrawal from that account because of financial hardship. Financial institutions must determine if the application is properly filled out, and if it meets the requirements for the particular type of financial hardship applied for. If it does, the application must be approved and the money must be paid to the owner, less withholding taxes and any administrative fee. The financial institution is responsible for answering questions and providing information to owners of locked-in accounts relating to their applications. The Financial Services Regulatory Authority of Ontario (FSRA) does not process these applications.
There are four categories of financial hardship:
- medical expenses;
- arrears of rent or default on debt secured on a main home (such as a mortgage);
- payment of first and last months’ rent; and
- low expected income.
Each application must fall under one of these categories. Applications must use FSRA-approved forms. These are issued by FSRA each year and posted on FSRA’s website at the start of a calendar year.
Applications must use the form for the calendar year in question. Owners cannot use previous years’ forms.
The owner of the locked-in account must be the person who applies to take money out as a result of financial hardship.
Reliance on information provided by owner
The owner must certify that the application and any other documents are accurate and complete. It is deemed to be a term of the contract governing the locked-in account that the financial institution can rely upon the information provided by the owner in the application. The owner certifies only the information that the owner gives in the application. The financial institution must make sure the rules in the Regulation have been satisfied. For instance, the application is a nullity if:
- it is signed by the owner (or their spouse, if applicable) more than 60 days before the financial institution receives it; or
- in any other case, if a required document is signed or dated more than 12 months before the financial institution receives it.
The financial institution determines if the application meets the requirements of the Regulation. If the requirements are not followed and a payment is made, the payment may be a void transaction.
If the financial institution has information on file or suspects the information in the application is inaccurate or false, the financial institution should inquire further.
If a financial institution has questions about possible liability associated with the review of applications, it should consult with its legal advisors.
Questions during processing applications
The financial institution should put in place appropriate procedures for the review of applications. The financial institution should start by addressing the following questions:
- Is the money in the account subject to the Ontario PBA? If not, stop the application.
- Does the application meet the “one application per year, per category, per account” requirement? If not, stop the application.
- Is the application complete? Did the owner and the spouse (if applicable) sign the application? Are all the required supporting documents included and signed, if necessary? Were the timelines for signatures respected? If the application is not complete, the owner should be told. If these issues are not resolved, stop the application.
- When were the completed application and the required documents received by the financial institution? Financial institutions should record this date, as the 30-day time limit for payment begins on that date.
Once the financial institution is satisfied that the application meets these general requirements, it must determine whether the application satisfies the specific requirements for the applicable category of financial hardship unlocking. This includes whether the amount applied for is within the minimum and maximum amount limits for that category.
Under certain circumstances, the financial institution must refuse an application. Examples are set out, but this list is not exhaustive.
The money must be subject to the PBA
It is important to make sure that the money in the locked-in account is:
- subject to Ontario law; and not
- federal legislation or the law of another province.
First, the money must have been earned in Ontario. That means the employment:
- took place in Ontario; or
- was deemed to have taken place in Ontario under the PBA.
A person is deemed to be employed in the province in which their employer is located and to which the person is required to report for work. A person who is not required to report for work at a workplace of their employer is deemed to be employed in the province in which the employer’s workplace is located from which the person’s salary is paid.
Second, the employment must not:
- have been in federally regulated employment such as banking or interprovincial transportation; or
- have been employment in the federal government; or
- have been with an organization or agency under the federal government, such as the RCMP.
When money transfers;
- from a pension fund to a locked-in account; or
- from one locked-in account to another;
that transfer usually accompanies a Canada Revenue Agency (CRA) form or equivalent documentation that identifies the jurisdiction whose pension law applies to the money.
It is the responsibility of the financial institution to:
- keep a record of the pension law that applies to the locked-in account; and
- to administer that account in accordance with applicable law.
As an example, Juan worked in Ontario selling widgets, but their pension plan was registered in Quebec. Their money is now in a bank and they want to apply for financial hardship unlocking. Because the money came from Ontario employment, the Ontario financial hardship unlocking rules apply to them.
Lee worked in Ontario for their whole career at a major bank and was a member of a federally registered pension plan. Their locked-in account is with a credit union in Ontario. Though they worked in Ontario, their pension plan was subject to federal pension benefits standards legislation, which has different unlocking rules. The Ontario financial hardship unlocking rules do not apply to Lee.
Each application relates to one locked-in account. An owner can make one application for financial hardship withdrawal, for each category, under each account, once in a calendar year. Owners should make each application on a separate form.
There is one exception. Under the category of medical expenses, an owner of a locked-in account may make one application each calendar year:
- for each account;
- for each person who is suffering from an illness or physical disability if that person is the owner, the owner’s spouse, or a dependant of the owner or the owner’s spouse.
Please see the section on medical expenses for more information.
Owners are required to certify that all the information in the application and in the accompanying documents:
- is accurate and complete; and
- that the owner has not previously applied to withdraw money from this locked-in account under the same category in the same year.
Even with this, the financial institution should use its own records to be sure that the owner has not made more than one application during the year.
(i) Year of receipt
An owner can only apply once per year per category (with the exception for medical expenses described above). As a result, financial institutions need to know the year in which an application is made.
For determining the year the application was made, the key date is the date the completed application with all required accompanying documents is received by the financial institution. This is the date it is submitted in person or the date it is received by mail, fax or electronically. Financial institutions must record the date of receipt.
(ii) 30 day time limit for payment
The financial institution must record the date it receives the completed application with all required documents. It must review the application, determine if it meets the requirements set out in the Regulation for the category of financial hardship on which the application is based. If the application does, the financial institution must make one payment of the entire amount to which the owner is entitled from the account. The financial institution must do this within 30 days from receipt of the completed application.
In determining the 30 day time limit, exclude the date of receipt and include the date of payment.
Example: a financial institution receives a complete application and all required documents on September 15. The application is approved on the same day. The money must be paid within 30 days of September 15, which is October 15. Counting begins the next day, September 16. If the application is complete but the financial institution does not approve it until September 25, the money must still be paid by October 15. This is because the 30-day period began September 15, the date of receipt.
Incomplete applications affect the 30 day time limit.
Example: An application is received by a financial institution on May 1. The financial institution must make the payment within 30 days from May 1. This would be no later than May 31. The financial institution reviews the application on May 7 and determines that the application is incomplete. At that point, the 30 day “clock” is stopped and is reset to zero. The financial institution should contact the applicant and advise them to provide the missing information or document. When the applicant provides the missing information or document, the 30 day clock begins again.
(iii) 60 day time limit for submission
A document is void if the owner or their spouse signs it more than 60 days before the financial institution receives it.
Once the owner signs the application, they have 60 days to submit it to the financial institution. If the owner signs more than 60 days before the date the application is received by the financial institution, the application must be rejected and a new one filled out and submitted. Exclude the date received in determining whether the application was signed more than 60 days before receipt.
An application is received on the date it is submitted in person, or received in the mail, by fax, electronically, or is received in any other means acceptable to the financial institution. The financial institution should stamp that date on the application or in some other manner and record it.
Example: the financial institution receives the application on May 1. Count backward to 60 without counting the date of receipt, which means starting on April 30. This takes you to March 2. If the application was signed (certified) on March 1 or earlier, the certification is not valid, and a new application will be required.
(iv) 12 month time limit
Certain required statements or documents cannot be signed and dated more than 12 months before the financial institution receives it. This includes statements from a physician or dentist under Part 5 of Form FHU 1 (Medical Expenses). It also includes a written demand for arrears of rent or secured debt under Form FHU 2 (Application for Arrears of Rent or Default on Secured Debt (Mortgage)).
The minimum amount that an owner can apply for is $500.00. If the maximum amount an owner is entitled to withdraw is less than $500.00, the financial institution should refuse the application. For example, if a physician or dentist states that the amount the owner needs for medical expenses is $400.00, the application must be refused.
The owner cannot apply for an amount greater than the maximum to which the Regulation entitles them. The maximum is different for each category. If the owner does apply for an amount greater than the maximum, the financial institution should tell the owner to change the application. If the amount applied for is still greater than the maximum, the financial institution must reject the application. A financial institution cannot pay an amount greater than the maximum the Regulation permits.
After reasonable efforts to obtain a complete and compliant application, the financial institution must refuse an application if it does not meet the requirements of the Regulation. The financial institution is responsible for reviewing the application to ensure that it meets all requirements. The following list contains examples of when requirements are not met. Please note that these are only examples; it is not a comprehensive list.
- The form has not been completed fully.
- Any documents required to go with the application have not been submitted or do not meet the requirements.
- The locked-in account is not held by the financial institution.
- The money was not earned in Ontario regulated employment.
- The applicant is not the owner of the account.
- The owner has already made an application under that category during that calendar year with respect to that account or, for medical expenses, has already made an application under that section during that calendar year in respect of that particular person.
- The owner applies to withdraw an amount that is less than $500.
- The maximum amount permitted under the category is less than $500.
- The owner applies to withdraw an amount that is greater than the maximum permitted under the category.
- There is no spousal consent to the withdrawal (and one is required in the circumstances.)
- The spouse who signs the consent is not the one identified in Part 1 of the application.
- The owner certification or the spousal consent is dated more than 60 days before the date the financial institution receives the form.
- The owner does not use the CEO-approved form for the correct category of financial hardship.
When the financial institution refuses the application, it must advise the owner in writing and set out the reason why.
If the owner:
- does not agree with the refusal; or
- if the owner does not agree with the amount that has been approved;
advise the owner to contact FSRA.
The money must be paid all at once. It cannot be paid monthly or in any other manner. It also cannot be transferred to another tax-deferred account, such as a registered retirement savings plan.
Financial institutions must take a certain percentage of money for federal income tax and submit that amount to CRA. The withholding tax pre-pays income tax and is a percentage of the amount withdrawn from the locked-in account. It is up to each financial institution to calculate and withhold the amount that it must remit to CRA.
The maximum under the Regulation is the total amount that may be withdrawn. The financial institution cannot “gross up” this amount to add tax and fees to be taken. The financial institution must take income tax and any additional fee from the amount that is approved for payment to the owner.
Example: Moe has $20,000.00 in their locked-in account. They may take out a maximum of $13,000.00 from their account, and they apply to take out $10,000.00. Their application is approved for $10,000.00. An amount of $2,000.00 must be taken for income tax. The bank also imposes a $10.00 administration fee.
The bank cannot add the additional $2,000.00 tax plus the $10.00 fee to Moe’s requested amount of $10,000.00. That is, it cannot pay Moe $10,000.00, transfer $2,000.00 to CRA and deduct $10.00 for the fee. Instead, the bank must deduct $2,010.00 from the $10,000.00 to which Moe is entitled. The bank must send $2,000.00 to CRA, pay itself $10.00, and give Moe the remaining $7,990.00.
The maximum amount Moe can apply to take out is $13,000.00. If Moe wants to receive a greater amount than $7,990.00 in cash, they could apply in the first place to withdraw $13,000.00. In that event, Moe would receive $10,390.00, which is calculated as $13,000.00 less withholding tax ($2,600.00) and the bank fee of $10.00. The amount of withholding tax will be calculated on the $13,000.00, which is the total amount they take out. But in any event, Moe cannot apply to take more than the maximum they are entitled to.
The financial institution should advise the owner in advance that the amount that is approved will be reduced for withholding tax and fees, if any.
When money is taken from a locked-in account, the amount taken could be counted as income. This could affect eligibility for benefits under a government program. If an owner has a question, they should be advised to contact the government agency or department that administers such program or provides these benefits.
A creditor may want to:
- seize money when it is unlocked; and
- before the financial institution pays it to the owner.
The financial institution should seek advice from its legal advisors regarding its obligations in that situation.
The financial institution is responsible for advising each owner of an account about the purpose for collecting, using or disclosing any of the owner’s personal information, and for complying with all applicable privacy requirements with respect to information provided as part of this application.
Each financial institution must keep accurate records of:
- the date a completed application with all required accompanying documents was received;
- when the review was completed; and
- when the money was paid out to the owner.
If the application was refused, the financial institution must keep accurate records of the reasons that were communicated to the owner. Since only one application for each account under each category can be made in a year (other than the exception for medical expenses), the financial institution must be aware of whether the owner has already applied during the year with respect to that account (and for medical expenses, with respect to that person).
Question 1, provide information about the owner of the locked-in account.
Question 2, policy or account number: Each application pertains to one locked-in account. The only number in the box should be the number of the financial institution’s account from which the owner is seeking to withdraw money.
Question 3, spouse.
“Spouse” is defined 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 the owner has a spouse on the date on which the owner signs the application, they should fill in the information about the spouse in question 3.
Spouses that are living separate and apart due to a breakdown in the spousal relationship do not need to consent to the withdrawal. Information about that spouse should still be filled in. Spouses living in different residences may still be spouses for the purpose of this consent. If one spouse is living elsewhere because of:
- their work; or
- they are looking after a relative or friend for health reasons; or
- for other reasons unrelated to their spousal relationship,
that does not constitute being separate and apart for the purpose of this consent.
It is possible that an owner has “more than one spouse”. That is, they are separated from their spouse while they are still married. At the same time, they are living common-law with another person who meets the definition of spouse in the PBA. The information about the spouse in question 3 must be filled in with the information about the common-law spouse. The funds may only be taken if the common-law spouse provides consent (Part 4).
With respect to the financial institution relying on the information provided by the owner in the application on the owner’s spousal status, the financial institution should make further inquiries if it is not satisfied with the information the owner gave.
Part 2 - Category of application
The questions in Part 2 pertain to the category under which the application is made. Please refer to each section below.
The owner “signs” the application when they sign the certification in Part 3 and date it. The owner’s signature does not need to be witnessed. The financial institution should ask for identification in accordance with its usual practices and procedures for withdrawals. If the financial institution is still not satisfied, it may refuse the application. The application is only valid if it is signed by the owner.
With respect to the key dates and timelines for the certification, please refer to "Key Dates and Timelines" in this guide.
Certifications regarding spousal status
The owner must certify certain information regarding their spousal status. (See above for the definition of “spouse”.) On the date the owner signs the application, they must check only one of four boxes:
- The owner has a spouse and the spouse consents to the withdrawal of money from the locked-in account.
Whether the owner has a spouse within the meaning of the PBA is a question of fact. The owner must certify this. If the owner has such a spouse and the spouse does not consent, refuse the application.
- The owner has a spouse but the spouses are living separate and apart due to a breakdown in their spousal relationship.
The owner may be living separate and apart from one spouse. At the same time, they may have a common law relationship that meets the definition of spouse under the PBA. In that case, the owner must check the first box. If the financial institution is not satisfied with the statement of the owner, it may make further inquiries.
Please refer to the information in 'Reliance on information provided by owner' for information relying on the owner’s stated spousal status.
- The owner has a spouse. None of the money in the owner’s locked-in account is derived, directly or indirectly, from a pension benefit provided in respect of the owner’s past or current employment.
This happens when the money in the locked-in account from which the owner is seeking to withdraw did not come from the owner’s pension but from the pension plan of their former spouse. For example, as a result of a divorce, Jordan was required to pay a portion of their pension to Chris. That portion was paid into Chris’s LIRA. Chris then married Avery. Chris wants to apply to withdraw money from their LIRA for financial hardship. Since the money was earned by Jordan, Chris’s current spouse Avery does not need to consent to the application. Jordan is no longer Chris’s spouse, so their consent is not required.
- The owner does not have a spouse.
In this case, no spousal consent is required
By signing/certifying the application, the owner is also certifying that:
- All the information in the application is accurate and complete.
- No previous application was made in this calendar year under this category.
Each owner can apply once per year, under each category. For medical expenses, a separate application may be made for each eligible person for the same account. If an owner and their spouse both have medical expenses, the owner may apply once to take out funds for each of them. The owner is allowed to do this in the same year.
If an owner has already made one application in a year under a specific category they are not eligible to make a second application (except for the medical expenses category). If they do anyways, the second application is not allowed.
An owner with more than one locked-in account in the same financial institution may make separate applications. They can do this with respect to each locked-in account under each category in the same year.
Example: Eddie has a LIRA and a LIF with the same institution. They can apply under low expected income under their LIRA. They can also apply under low expected income under their LIF. If they have their accounts in separate institutions, they can also apply once for each account.
If an owner has a spouse on the day the owner signs the certification, the owner’s spouse must consent to the owner’s application to unlock and take out the funds, unless:
- the owner and spouse are living separate and apart due to a breakdown in the spousal relationship, or
- the money originated in the pension plan of a former spouse (none of the money was related to the employment of the owner).
The financial institution cannot accept the application if spousal consent is required and the spouse does not consent.
There are three statements the spouse must state that they understand. If the spouse is signing the consent at the financial institution and indicates they do not understand any of these statements, then the spouse should be told to seek legal advice.
If the financial institution is not satisfied that the spouse understands what they are signing, it may refuse the application.
The financial institution may request evidence of the spouse’s identity and spousal status.
The spouse’s consent does not need to be witnessed.
Form FHU 1 – Application for Medical Expenses
Part 2: Medical expenses (including renovation expenses)
Question 1: Who has the illness or physical disability?
Under the category of medical expenses, one application may be made each year for each person who is suffering from an illness or physical disability. The affected person must be the owner of the account, the owner’s spouse, or a dependant of the owner or a dependant of the owner’s spouse. A physician or dentist must verify the medical condition. A separate application must be made for each person. The statement of the physician or dentist must relate to the person named in that application. The spouse of the owner who is living at a different home than the owner may still qualify under this category.
For the purpose of this application, a “dependant” is any person who was dependent on:
- the owner of the locked-in account; or
- the owner’s spouse,
for support at some time during the calendar year in which the owner signs the application, or during the previous calendar year. The dependant is not required to live at the same location as the owner or the owner’s spouse. For example, the dependant may be living in a residence or in a short or long-term care home.
The medical expenses may include:
- expenses for goods and services of a medical or dental nature. These may have already been charged in the past, or will be charged in the next 12 months;
- expenses for any renovations that have been charged in the past or will be charged within the next 12 months to the owner’s or dependant’s main home. The renovations must have been made necessary by the illness or physical disability of the owner, their spouse or their dependant; and
- any additional expenses already charged in the construction of the owner’s or dependant’s main home. Future expenses for a home that has not yet been built cannot be included. These expenses must have been necessary by the illness or physical disability of the owner, their spouse or their dependant.
Examples include a ramp for wheelchair access, installation of bars in a bathtub or shower stall, and a stairlift. Medical expenses include medical expenses for a person suffering from a mental illness.
A physician or dentist must certify that the goods or services, or renovations, are or were necessary for the person’s treatment, or were necessary as a result of the person’s illness or physical disability. The illness or physical disability may have occurred in the past.
A person’s main home is the housing unit they ordinarily live in. It must be the main home during the calendar year in which the owner of the locked-in account signs the application. The housing unit can be:
- a house;
- a condominium unit;
- an apartment or other unit in a multi-residential property; or
- a non-seasonal mobile home, a trailer or a houseboat.
A person can only have one main home at any one time for the purpose of this application.
The main home to which renovations are required or to which the renovations were made may be:
- the main home of the owner; or
- the main home of the dependant.
The renovations cannot be or have been to the spouse’s main home if that home is different from that of the owner. The spouse may still qualify under this category for renovations to the spouse’s residence if the spouse qualifies as a dependant of the owner. In that case, the owner should identify the person with the illness or physical disability as their dependant, as well as their spouse.
A person can apply under different categories using different forms. A person can make two applications under the medical expenses category for two different persons but must use different forms. For example, Joe could apply under medical expenses for themself and their child. If Joe did so, they must use two different forms and two different sets of supporting documents.
Question 2: Previous applications
One application may be made each year for each person who is suffering from an illness or physical disability as long as the affected person is:
- the owner of the account;
- the owner’s spouse; or
- a dependant of the owner or the owner’s spouse.
Question 3: Maximum amount that may be taken out
The maximum amount an owner can take out is the smaller of:
- 50% of the YMPE for the year – this amount will be pre-filled in the form in box 3a - and
- the sum of:
- the amount of medical expenses that have been charged, and
- an estimate of the total medical expenses expected for the 12 months following the date the application is signed.
This sum is to be written in box 3b.
The amount that is the smaller of boxes 3a and 3b must be set out in box 3c. This is the maximum amount that the owner may apply to take out.
The owner must attach copies of receipts or estimates for the total amount of expenses claimed. A receipt for past expenses should:
- be dated;
- show the amount paid; and
- to whom the amount was paid and the nature of the expenses.
For future expenses to an existing home, the estimate should:
- be dated;
- show the proposed amount to be paid; and
- what work is to be done.
Question 4: How much is the individual applying for?
The amount the owner is applying for must be set out in box 4. It cannot be greater than the amount in the locked-in account that is the subject of this application. Also, it cannot be greater than the maximum as set out in box 3c. It cannot be less than $500.00.
Example: the maximum Riley is allowed to take out is $8,000.00 but they only have $6,000.00 in their account. Riley should not ask for more than $6,000.00. If they do, the financial institution should advise them that they have only $6,000.00 in their account. It should then suggest that they amend the application. Riley can then decide whether to amend or withdraw the application.
Question 5: Main home that requires renovations
When medical expenses involve renovations to a main home, it must be:
- the main home of the owner; or
- the main home of the dependant.
The renovations cannot be for the owner’s spouse’s residence if the spouse resides at a different address. The only exception is if the spouse qualifies as a dependant of the owner.
Additional documents required: See Part 5
Part 5: Statement of physician or dentist
The owner must provide a statement signed by a physician or dentist that supports the application. The physician must be a medical doctor licensed to practice medicine in Canada. This does not include:
- cosmeticians, and others.
The dentist must be a dentist licensed to practice dentistry in Canada. The physician or dentist can either complete Part 5 or provide a separate statement. If a separate statement is provided, it must:
- state that the physician or dentist is licensed to practice in Canada;
- their registration or license number; and
- all of the other information required by Part 5.
The physician or dentist must:
- identify the person who is the subject of the application; and
- who has or had the illness or physical disability; and
- confirm that certain medical or dental goods or services are or were necessary for that person’s treatment; and/or
- confirm that certain renovations are or were necessary to the main home as a result of the person’s illness or physical disability; and/or
- confirm that additional expenses incurred in the construction of a main home were made necessary by the illness or physical disability.
Part 5 of the form or the separate statement must be signed and dated by physician or dentist, and their registration or license number must be filled in.
The physician or dentist’s statement must:
- be complete; and
- must not be signed or dated more than 12 months before the financial institution receives it.
Form FHU 2 – Application for Arrears of Rent or Default on Secured Debt (Mortgage)
Part 2: Arrears of rent or default on secured debt (Mortgage) on a main home
The owner may apply under this category if either the owner or their spouse has received either:
- a written demand for payment of arrears of rent on the owner’s main home; or
- a written demand in respect of a default on a debt secured against the owner’s main home (such as a mortgage),
and the owner could face eviction if the debt or amount in default remains unpaid. The demand for payment of rent or default on secured debt (mortgage) must be in writing. A verbal demand is not sufficient.
Examples of debts secured against a main home include:
- a mortgage;
- a line of credit secured against the main home; or
- a lien registered against the main home.
This list is not exhaustive. If another type of secured debt is the subject of the demand, the financial institution must determine whether it qualifies.
The demand for payment may have been received by either the owner or the owner’s spouse. The demand must be only for the owner’s main home. If the spouse’s main home is different it will not qualify.
Question 1: Previous applications
Only one application may be made in each calendar year under this category.
Question 2: Maximum amount that may be withdrawn
The maximum amount an owner can withdraw is the smaller of:
- Box 2a: 50% of the YMPE for the year - this amount will be pre-filled in box 2a - and
- Box 2b:
- the total amount of the arrears of rent. Include the total amount of rent payable for 12 months after the date the application is signed, or
- the sum of the total payments in default on a secured debt (mortgage). Include the total amount of payments due (with interest) payable for the 12 months after the date the application is signed.
The smaller of boxes 2a and 2b must be set out in box 2c.
Question 3: How much is the individual applying for
The amount the owner is applying for must be set out in box 3. It cannot be greater than the amount in the locked-in account or the amount set out in box 2c. It cannot be less than $500.00.
Example: Gray is behind on their rent. The maximum Gray can take out under the Regulation (the amount in box 2c) for their rent arrears is $8,000.00 but they only have $6,000.00 in their account. Gray should not ask for more than $6,000.00. If they do, the financial institution should advise them that they have only $6,000.00 in their account and suggest that they amend the application. Gray can then decide whether to amend or withdraw the application.
Question 4: Main home
The owner may be currently living in a different address than their main home. Their current address may be temporary, or it may be a seasonal residence. However, the main home must be occupied as the primary place where the owner lives.
Additional documents required:
The owner must provide a copy of the written demand for their rent arrears or default on secured debt under this category. This demand may be in the form of a letter, a notice or another type of document but must:
- be in writing;
- relate to the account owner’s main home; and
- be current (it cannot be signed or dated more than 12 months before the financial institution receives it).
Form FHU 3 - Application for Financial Hardship Unlocking for First and Last Months’ Rent
Part 2: First and last months’ rent for a main home
The residence that is being rented must be occupied by the owner, as their main home. The owner or the owner’s spouse may require the money to pay first and last months’ rent.
Example: Robin owns a locked-in account. Robin’s spouse Morgan seeks to rent a house that will be the main home for both of them. Morgan arranges the lease and it will be in their name. Robin’s application should qualify because the house will be Robin’s main home.
Question 1: Previous applications
Only one application may be made in each calendar year under the first and last months’ rent category. If an individual has applied for first and last months’ rent for a main home then an application cannot be made again in the same calendar year.
Question 2: Maximum amount that may be withdrawn
The maximum amount an owner can take out is the smaller of:
- Box 2a: 5% of the YMPE for the year - this amount will be pre-filled in box 2a - and
- Box 2b: the amount required for first and last months’ rent.
The smaller amount must be entered in box 2c. This is the maximum amount that may be taken out.
Question 3: How much is the individual applying for
The amount the owner is applying for must be set out in box 3. It cannot be greater than the amount in the locked-in account or the amount set out in 2c. It cannot be less than $500.00.
Question 4: Address of the main home being rented
The owner can fill in the address. It may be different from the current mailing address or residence.
Additional documents required: If the owner has a copy of the rental agreement, it must be included with the application. However, a copy of the rental agreement is not necessary.
Form FHU 4 - Application for Low Expected Income
Part 2: Expected income
Question 1: Previous application
An owner may apply only once in each calendar year under the low expected income category. If the owner applies more than once, the later application must be rejected.
Question 2: Expected total income
The owner must set out their expected total income from all sources. This should be pre-tax and for the 12-month period beginning on the date of the application. This refers to the income the owner expects to receive for the next 12 months. The amount they received in the past 12 months is not relevant. This amount should not include the income of the owner’s spouse. It should not include the amount they expect to withdraw under this category.
The owner must include the amount of total income from all sources, before taxes, that the owner expects to receive for the next 12 months:
- wages, salaries, casual earnings and amounts paid under a training program
- income from self-employment (net of expenses but before taxes)
- rental income (net of expenses but before taxes)
- payments received under an annuity, pension plan, registered retirement savings plan, registered retirement income fund, superannuation scheme, or earnings replacement program
- insurance benefits
- spousal support payments
- capital gains arising from the sale or disposition of an asset
- cash payments received under a government program (except for those excluded below), such as Canada Pension Plan, Old Age Security, or Ontario Works
- interest and dividend income on any investment
- other income from any other source
Expected total income does not include the following:
- the amount they expect to withdraw under the low income category
- a refund or repayment of taxes paid to a Canadian jurisdiction
- a refundable tax credit
- a refund of tax paid under the Ontario Child Care Supplement for Working Families program under section 8.5 of the Income Tax Act
- the payment of an Ontario child benefit under section 8.6.2 of the Income Tax Act or under section 104 of the Taxation Act, 2007
- a payment received by a foster parent under the Child, Youth and Family Services Act, 2017
- child support payments received under a court order or an agreement
The total amount of expected income must be entered in box 2.
The amount in box 2 cannot be greater than 66 2/3 percent of the YMPE for the applicable year.
Question 3: Maximum amount that may be taken.
The maximum amount an owner may take is:
- Box 3a: 50% of the YMPE for the year in which the application is signed - this amount will be pre-filled in box 3a,
- Box 3b: 75% of the owner’s expected total income from all sources, before taxes, for the 12- month period after the date on which the application is signed, which is the amount in box 2.
The remainder must be entered in box 3c. This is the maximum amount the owner may take out.
Question 4: How much is the individual applying for
The amount the owner is applying for must be set out in box 4. It cannot be greater than the amount in the locked-in account or the amount set out in box 3c. It cannot be less than $500.00.