Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.
Principal Issues:
Replacement of funds withdrawn from an RRSP due to financial hardship.
Position:
No
Reasons:
The ITA does not provide for a replacement of funds withdrawn from an RRSP.
DM'S OFFICE (2) DM #96-0271D
ASSOCIATE DEPUTY MINISTER (1)
ADM'S OFFICE (3)
PENDING
RETURN TO 15TH FLOOR, ALBION TOWER
Signed on April 2, 1996
XXXXXXXXXX
Dear XXXXXXXXXX:
I am replying to your letter of February 15, 1996, concerning your constituent, XXXXXXXXXX who withdrew funds from his registered retirement savings plan (RRSP) for living expenses while his claim for disability benefits was before the courts.
I understand that you are concerned that the Income Tax Act may not permit XXXXXXXXXX and individuals in similar situations to re-contribute RRSP contributions that were withdrawn to cover living expenses. The Income Tax Act does not specifically provide for a replacement of amounts withdrawn from RRSPs during periods of hardship, such as encountered by XXXXXXXXXX However, the Act permits a deduction from income for regular annual contributions to RRSPs and for the transfer of certain forms of income to RRSPs in certain circumstances, such as upon receipt of a retiring allowance. It also provides that amounts received from a Supplementary Unemployment Benefit Plan and certain CPP/QPP disability benefits can be included in the calculation of earned income upon which regular RRSP contributions are based. XXXXXXXXXX may therefore be able to use these provisions to return some of the funds withdrawn to his RRSP. I have enclosed a copy of the 1995 RRSP and Other Registered Plans for Retirement Guide which provides further information in this regard.
As the Department of Finance is responsible for tax policy relating to RRSPs, I have sent a copy of your letter to Mr. David Dodge, Deputy Minister of Finance for his consideration.
I wish to thank you for bringing this matter to my attention.
Yours sincerely,
Pierre Gravelle, Q.C.
C.C. Mr. David A. Dodge
Deputy Minister of Finance
Frank Gillman
957-2131
960791
March 21, 1996