The Lifelong Learning Plan (LLP)
This program, similar to the Home Buyers Plan, allows You to withdraw funds from your RRSP without immediate tax on the amount withdrawn. Withdrawing funds using the Life Learning Plan (LLP) can only be done for education purposes for the owner of the pension account or their spouse. This program does not extend to children. The amount that can be withdrawn from RRSP for the purpose of education is up to $10,000 per year, for a total of $20,000. A mandatory condition is that the funds have to be in the RRSP account for a minimum of 90 days. The funds withdrawn using the LLP program, do not necessarily have to be spent on the education.
For the education program to be eligible for the Life Learning Plan, it must be longer than 3 months with at least 10 hours per week. The funds can be withdrawn annually for the duration of 4 years since the beginning of the first year. Latest time the funds can be withdrawn is in January of the fourth year of education. You can find more information regarding this program on a government website.
Withdrawing funds from RRSP using the Life Learning Plan, you must return the full amount within 10 years. Annually, you will be receiving a notice regarding how much has to be returned in to your RRSP. When you receive a response from Canada Revenue Agency in a form of Notice of Assessment, you will find balance of your Life Learning Plan on page 3, as well as suggested repayment amount for the year. You have an option. If you do not return the amount indicated on your Notice of Assessment, this amount will be added to that year’s income and you will pay tax on it.
If you have fully repaid the balance of your LLP program, you can use the program again in the next year.