Do you Want to go Back to School?

By Mauricio Dreher

If you are considering changing careers, perhaps going back to school is a good idea. There is a government program that not everybody is aware, called Lifelong Learning Plan (LLP).

The LLP is a program whereby funds can be withdrawn from a taxpayer’s RRSP to use to cover the expenses of engaging in full-time school or training. These withdrawals, if properly documented, will not be taxable provided the funds are returned to an RRSP pursuant to the program rules.

How much can be withdrawn from an RRSP under the LLP?

Up to *$10,000 per year can be withdrawn from an RRSP under the LLP with a cumulative maximum of *$20,000 over four years, and a taxpayer can make an LLP withdrawal either on her/his own behalf or on behalf of their spouse.

After her children left home and were out on their own, Mrs. X decided she would like to go back to university to get a business degree. As a stay-at-home mother she had not amassed any RRSP savings but her husband had been making regular contributions over the years. He was able to withdraw $5,000 per year for four years from his RRSP under the LLP on Mrs. X’s behalf.

Do you need to repay the amount withdrawn back to the RRSP?

To avoid adverse tax consequences the amount withdrawn from RRSP for LLP purposes has to be repaid to your RRSP. Repayments must be made at a minimum of 1/10 of the withdrawal amount over a maximum of 10 years. The repayments to an RRSP must begin at the earliest of:
• 60 days after the end of the fifth year following the year of first withdrawal; and
• 60 days following the last year in which the student was enrolled full-time in a designated program

So, now you have another chance to have a bright future!

Source: CRA – Canada Revenue Agency –


The statements contained herein are based on material believed to be reliable and is for general information purposes only. Where such statements are based in whole or in part on information provided by third parties, they are not guaranteed to be accurate or complete. This information is not intended to provide specific personalized advice including, without limitation, investment, financial, legal, accounting or tax advice.

Mauricio Dreher

Maurício has more than 15 years experience in the financial industry, having an internationally recognized certification as Certified Financial Planner. He works with Canfin Financial Group, offering Investments, Insurances, Mortgages, with emphasis in Tax Savings Strategies.

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