Lifelong Learning Plans (LLPs)

Question 1

LLP

Answer 1

RRSP annuitants are able to make tax-free withdrawals from their plan to pay for full-time training or education for themselves or their spouses.

Question 2

LLP Withdrawals

Answer 2

• Withdrawals from RRSPs (except LIRA accounts) are limited to $10,000 in a given year.
• Withdrawals may be made from multiple accounts, but not exceeding the yearly limit.
• Withdrawals under this plan are permitted for a period of up to four calendar years, so long as the total withdrawn does not exceed $20,000

Question 3

Qualifying for LLP

Answer 3

1) Funds must be withdrawn to finance full-time attendance in a qualifying educational program of at least three month’s duration at an eligible educational institution (disabled student may qualify whether or not studying on a full-time basis).

2) If funds are withdrawn before the enrollment of the recipient or spouse, the enrollment must occur in the year of the RRSP withdrawal or by March of the following year

3) If the student doesn’t finish the course of study under the qualifying program, the RRSP withdrawal is still considered to have been made under the plan if any of the following conditions are met:

a) The student withdraws from the program more than three months after the year of the RRSP withdrawal;
b) Less than 75% of the student’s tuition is refundable as a consequence of leaving a program; or
c) The student enrolls in another qualifying educational program before April of the year following the year of the RRSP withdrawal.

Question 4

LLP Repayment Rules

Answer 4

• Withdrawals are not allowed in the same year in which a participant is required to repay back into the RRSP, in accordance with the plan re-payment rules.
• Funds withdrawn for a LLP are repayable to the withdrawing individual’s RRSPs in equal installments over a 10-year period, beginning no later than 60 days following the fifth year after the year in which the individual first received the funds (Note: repayment will be required to start earlier if the student fails to qualify for a full-time education tax credit for at least three months in two consecutive years that end before that fifth year - earlier repayment is required to start no later than 60 days after the second of those two years).
• Any amount not repaid for a year as required by the recipient will be added to the recipient’s taxable income for the year, and a recipient will be permitted to repay amounts faster than required.