Refunding LIRAs and LIFs

Note that...


  • To obtain a cash payment (refund), an application must be made to the financial institution.
  • All refunds are taxable. However, income tax can be deferred if the amounts can be transferred directly to an RRSP or a registered retirement income fund (RRIF).

Refunds for holders age 65 or over

The entire amount in a locked-in retirement account (LIRA) or life income fund (LIF) can be withdrawn provided the LIRA or LIF holder meets the following two requirements:

  • He or she is age 65 or over at the end of the year preceding the one in which he or she applies.
  • The total locked-in amounts accumulated in the retirement savings instruments mentioned are not more than 40% of the maximum pensionable earnings under the Québec Pension Plan for the year of application, that is, $22 960 in 2019.

An LIRA or LIF can be refunded at any time, regardless of the date on which the investments mature. Before that date, however, fees could be levied.

To obtain a refund, the LIRA or LIF holder must complete Schedule 0.2 of the Regulation respecting supplemental pension plans and send it to the financial institution.

Savings instruments affected:

  • LIRAs
  • LIFs
  • Defined contribution pension plans or the defined contribution component of a defined benefits pension plan
  • Simplified pension plans (SIPPs)
  • Locked-in RRSPs
  • Voluntary retirement savings plans (VRSPs)
A helpful example...

Patricia is 66 years old on 31 December 2018. On 15 January 2019, she applies for and draws a life income of $1752 from her LIF account, which has a total value of $24 000.

Since the balance of Patricia's LIF is now $22 248 and she does not have any other savings vehicles from the list above, she can immediately withdraw the balance of her account, which is now less than $22 960, that is, 40% of the MPE for 2019 (40% x $57 400).

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Refunding the balance for non-residents

A non-resident can request that the balance of his or her LIRA or LIF be refunded in a single payment at any age, if:

  • he or she has not lived in Canada for at least two years
  • and
  • the investments have matured.

Worth knowing about...


  • Unless it is stipulated in the contract, an LIRA or LIF cannot be refunded until the investments have matured. In such a case, fees may be levied.
  • It is the financial institution's responsibility (not ours) to ensure that the LIF or LIRA holder has not been living in Canada for at least two years. In order to do so, the financial institution must obtain proof that it deems satisfactory.

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Refunds in the event of disability

LIRA holders

An LIRA holder can be refunded in full or in part if he or she is disabled due to a physical or mental condition that reduces his or her life expectancy.

The refund can be made as a lump sum or several payments. It can be made regardless of the maturity date of the investments. Before that date, however, fees could be levied.

To obtain a refund, the LIRA holder must provide the financial institution with a medical certificate stating that he or she is disabled due to a physical or mental condition that reduces his or her life expectancy.

Financial institutions can neither tighten nor loosen those restrictions.

The disability must reduce life expectancy

  • Reduced life expectancy does not necessarily mean that the reduction must be significant.
  • If the LIRA holder's health problems do not affect his or her ability to work, he or she cannot be deemed disabled.
  • The requirements for being disabled are different from those under the Québec Pension Plan.

The medical certificate

The medical certificate must be issued by a physician who is a member of the Collège des médecins du Québec This link will open in a new window. or, if the physician is outside Québec, he or she must be a member of an equivalent body.

The medical certificate does not have to mention a diagnosis or actual life expectancy. It merely has to state that the LIRA holder is disabled due to a medical condition reduces life expectancy. The certificate can be a letter signed by your physician. An example follows.

2 January 2019

Mr. Charlie Bailey
7878 Street Avenue
Quebec City, Quebec
G1J 9N9

Subject: Medical certificate

Dear Mr. Bailey,

I hereby confirm that you are disabled due to a medical condition that reduces your life expectancy.

Signature :
Dr. Smith, M. D.
Your Medical Clinic
9696 Your Street
Quebec City, Quebec
G1H 2J3

LIF holders

If a LIF holder is disabled, he or she cannot obtain a refund directly from his or her LIF. To obtain a refund, he or she must transfer his or her LIF to an LIRA before the end of the year in which he or she turns 71, and meet the requirements entitling him or her to a refund due to a disabling condition.

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Refunds due to death

When a LIF or LIRA holder dies, the balance is paid to his or her spouse, or if there is no spouse or the spouse has renounced it, to the heirs.

An LIRA or LIF can be refunded at any time, regardless of the date on which the investments mature. Before that date, however, fees could be levied.

The amounts withdrawn are subject to income tax, unless exemptions under taxation rules apply. For details, consult the Canada Revenue Agency This link will open in a new window..

Beware of fraudulent withdrawals

We urge the LIF or LIRA holder to be wary of classified ads that propose various tax-free ways to withdraw money from an LIRA or LIF, such as by purchasing stock shares or taking out a loan. Those methods are fraudulent. They can have significant tax effects, and the LIF or LIRA holder could lose his or her money. To find out more, please consult the Fraud in classified ads This link will open in a new window. section on the Autorité des marchés financiers du Québec's Web site.


To find out more...

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