LLP repayment schedule.
Annual repayment required
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Tax cost of missed payments
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Your breakdown
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Tapping your RRSP to go back to school
The Lifelong Learning Plan lets you withdraw from your RRSP tax-free to pay for full-time education, for you or your spouse. The ceilings are $10,000 in any single year and $20,000 in total across the time you use the plan. Like the Home Buyers' Plan, it is a loan from yourself rather than a grant, so the money has to go back into your RRSP on a schedule. This calculator concentrates on that repayment and the tax bite if you let an installment slip.
A 10-year repayment with a long runway
LLP repayment runs over ten years, not the fifteen the home plan uses, and the runway before it starts is more generous. Repayment begins the fifth year after your first withdrawal, or sooner if you stop being a full-time student for long enough, which gives you time to finish studying and find your footing in a new career before the clock starts. Each year you return one-tenth of the total withdrawn. You make a normal RRSP contribution and designate it on your tax return as an LLP repayment. Miss a year and that one-tenth is folded into your taxable income for the year.
A $20,000 withdrawal with two missed years
Take the full $20,000 lifetime maximum. One-tenth is $2,000 a year. Suppose two of those repayment years go unpaid while you sit at a 35 percent marginal rate. Each skipped $2,000 becomes taxable income, taxed at 35 percent.
The chart lays the ten annual repayments along a timeline, with the two missed years shaded to show where the $1,400 of avoidable tax comes from. Keep every bar paid and the tax cost stays at zero.
Where the LLP fits, and a credit it does not touch
The LLP suits a mid-career professional with a healthy RRSP who wants to retrain full-time and would rather not drain a TFSA or take on student debt. It is less useful for a young saver whose RRSP is thin, since the lost compounding hurts more the longer the runway to retirement. One point of confusion worth clearing: the LLP is separate from the tuition tax credit. Using LLP money to pay tuition does not stop you from claiming the tuition credit on the same fees, so you can do both. A practical tip: the $20,000 lifetime cap can be reused, because once you fully repay an LLP balance you are allowed to start a fresh one for new studies later in life. The plan is genuinely lifelong, not a one-shot.
Frequently asked questions
Can I use the LLP to pay for my child’s education?
No. The plan covers only you or your spouse or common-law partner as the student. It cannot fund a child’s schooling, which is what the Registered Education Savings Plan and its government grants are designed for. If you are saving for a child, an RESP is almost always the better vehicle because of the Canada Education Savings Grant that tops up contributions.
Can I use the LLP and the Home Buyers' Plan at the same time?
Yes, the two plans are independent and have separate limits, so you could be repaying an LLP and an HBP at once if you used both. Just track them separately, because they run on different clocks, ten years for the LLP and fifteen for the HBP, and the Canada Revenue Agency reports each remaining balance on your notice of assessment. Doubling up does drain your RRSP faster, so weigh the lost growth before stacking them.