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LIRAs and LIFs in the event of a disability

Do you have a locked-in retirement account?

If you have a disability that reduces your life expectancy, you are entitled to a refund in whole or in part of the balance of your locked-in retirement account (LIRA).

You can apply for the refund until the end of the year during which you turn 71.

To obtain a refund, you must provide the financial institution holding your LIRA with a medical certificate stating that your physical or mental disability reduces your life expectancy.

The refund can be made in one or more instalments.

The refund is taxable. You could pay income taxes at a later time if the balance can be transferred directly to an RRSP. For more information, consult the Canada Revenue Agency's This link will open in a new window. website.

You are entitled to the refund, even if your investments have not matured. However, penalties could apply.

Refunding the balance of your LIRA could also be made in other situations.

Definition of disability to be entitled to the refund

To be entitled to the refund of the balance of your LIRA in the event of disability, you must meet the following two conditions:

  1. You have a physical or mental disability.

    If your health problems do not affect your ability to work, you cannot be deemed to be disabled.

  2. Your disability reduces your life expectancy.

    Reduced life expectancy does not necessarily mean that the reduction must be significant.

The financial institution cannot impose other conditions.

Different definition for the Québec Pension Plan

Even if you are entitled to the refund of the balance of your LIRA in the event of disability, you might not be entitled to a disability pension under the Québec Pension Plan. Each plan, contract or program has its own definition of disability.

Check the conditions that apply to each one to find out what you can receive.

Medical certificate

Your 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 a member of an equivalent body.

The certificate does not have to mention the diagnosis received or your life expectancy. It merely has to state that your physical or mental disability reduces your life expectancy. It can be a letter signed by your physician, as in the following example:

2 January 2025

Charlie Bailey
7878, 501e Rue Est
Québec (Québec)  G1J 9N9

Dear Mr. Lavoie:

Subject: Medical certificate

I hereby confirm that your physical disability reduces your life expectancy.

Signature:
Dr. John Smith, M.D.

Your medical clinic
9696, Your street
Québec (Québec)  G1H 2J3

Do you have a life income fund (LIF)?

Your life income fund (LIF) provides nothing in the event of disability. However, you can transfer the balance of the LIF to an LIRA to benefit from the measures provided by the LIRA. You must do so before the end of the year during which you turn 71.

Also consult

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