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A loophole in LIRA rules would be helpful in times of hardship
Q: My house was burnt in the Fort McMurray fire. I am now unemployed and my husband and I are struggling to make the mortgage payments on top of our rent payment. Our savings are now drained as well as money received from insurance—the town house was part of a condo and is being rebuilt.
We have a significant amount locked up in a LIRA and it seems ridiculous for our mortgage to go to foreclosure (as it will be soon enough) before we have a chance to sell it and get our money out when it’s finally rebuilt next year. Are there any LIRA loopholes for people who lost their homes in these fires? Can we take money out of the LIRA to help us out financially now?
—Karen
A: Karen, the Fort McMurray fire is a disaster in many ways. There was huge property damage, displacement, disruption of infrastructure, and disruption of employment. The biggest strain has to be the pace at which all of this gets solved. How do you get by financially when you have continuous living expenses while employment opportunities are suddenly limited?
I’m so sorry this has happened to you, Karen. Making mortgage payments and rent payments with insurance benefits drying up is extremely difficult. Relief funds are vital but not helpful in your case as they are directed to rebuilding efforts. Where does this leave you as an in-betweener?
A LIRA (Locked-In Retirement Account) falls under provincial pension legislation. It is designed to be a source of income after your working years come to a close. In Alberta, a LIRA can be unlocked once you reach age 50+
There are also five hardship provisions that can be used to apply for unlocking the money in your LIRA.
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