The Lifelong Learning Plan (LLP) is a Canadian government program that allows individuals to withdraw funds from their Registered Retirement Savings Plan (RRSPs) to finance full-time education or training for themselves or their spouse or common-law partner. This initiative supports lifelong learning and skill enhancement, making education more accessible for Canadian residents.
Who Can Participate in the LLP?
To be eligible for the LLP, you must:
- Be a Canadian resident and an RRSP annuitant.
- Be withdrawing funds for yourself or your spouse/common-law partner’s education.
- Not use LLP to finance your children’s education.
- Withdraw funds before January of the fourth calendar year after your first LLP withdrawal.
- Not withdraw more than $10,000 per calendar year or exceed a total withdrawal limit of $20,000.
- Not participate in the LLP after the year you turn 71,
Who Qualifies as an LLP Student?
The LLP student can be either the RRSP holder or their spouse/common-law partner. To qualify, the student must:
- Enroll in a full-time qualifying educational program at a designated educational institution.
- If the student has a disability, part-time enrollment may be permitted.
- Have a written offer to enroll if not already enrolled.
The student must remain enrolled until at least March of the year following the withdrawal. If the student discontinues studies and at least 75% of tuition is refundable, the LLP withdrawal must be canceled.
Qualifying Educational Programs and Institutions
A qualifying educational program must:
- Be at the post-secondary level or provide technical/vocational training.
- Last at least three consecutive months.
- Require at least 10 hours per week on courses, practical training, lab work, or thesis research.
Designated educational institutions include:
- Canadian universities, colleges, and vocational institutions.
- Institutions certified by Employment and Social Development Canada (ESDC) for occupational skills training.
- Universities outside Canada for degree programs lasting at least three consecutive weeks.
- U.S. post-secondary institutions if the student commutes from Canada.
Withdrawing Funds Under the LLP
Withdrawals from RRSPs must follow these rules:
- The funds must be withdrawn before the student completes their program.
- Locked-in RRSPs, Pooled Registered Pension Plans (PRPPs), and Specified Pension Plans (SPPs) do not allow LLP withdrawals.
- You must be a Canadian resident at the time of withdrawal.
Repaying LLP Withdrawals
Repayment occurs over a 10-year period. Each year, you will receive an LLP Statement of Account along with your notice of assessment or reassessment. This statement provides a comprehensive summary of your LLP activity, including:
- Withdrawals made under the LLP
- Your remaining LLP balance
- Total repayments to date
- Any cancellations Income inclusions (if applicable)
- The repayment amount required for the following year
By leveraging RRSP savings for education, individuals and their spouses can acquire new skills and qualifications while benefiting from flexible repayment options. If you’re considering using the LLP, ensure you meet all eligibility criteria and repayment obligations to maximize its benefits. Get in touch with Koroll & Company to discuss your financial situation and review your financial plan.
