Page 76 - A Canuck's Guide to Financial Literacy 2020

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Keep in mind that the repayment period could be shorter than 15 years if;

o If the participant dies
o If the participant becomes a non resident
o If the participant reaches 72 years of age or older

Example: Jeff withdrew $35,000 from his RRSP. Over the next 15 years, he has to
contribute a minimum of $2333.33 into his RRSP ($35,000 / 15 = $2333.33). If Jeff
forgets to contribute into his RRSP for that particular year, the $2333.33 gets added
on top of his income.

Lifelong Learning Plan Withdrawal

Lifelong Learning Plan allows taxpayers to withdraw from their RRSPs for the purpose of
financing full time training or education. The LLP is a different from RESPs and cannot be
used to finance your children's education.

Qualifying for the Program
To qualify for the program, you must be an RRSP account holder and be a Canadian
resident. In addition, you'd have to be enrolled or have received an offer of
enrollment.

o The individual must be in a qualifying educational program.
o The institution must be a designated educational institution.
o The taxpayer must be a full-time student.

Please note that an individual can also be enrolled part time and qualify, if they meet
the disability conditions.

Qualifying Educational Program
A qualifying educational program is one that lasts for more than three months and
requires the student to spend at a minimum 10 hours per week on course work. This
could include lectures, training, lab work, research, etc.

Amount of Withdrawal
An LLP participant can withdraw up to $20,000 from their RRSP, limited up to
$10,000 in a calendar year.

The LLP participant also has to enroll before March of the year after the LLP
withdrawal. They must still be enrolled in the program in April of the year after the
LLP withdrawal unless the course has been completed.

There will not be any tax withheld at the source on the amount of withdrawal. The
RRSP issuer will send you a T4RSP slip showing the amount withdrawal. You would
have to proceed to file a tax return even if no tax is owed.