Nova Scotia is allowing residents to apply directly to their financial institution to access their retirement savings when facing financial challenges.
Under amendments to provincial pension legislation effective July 1, a person may be approved to access part of a locked-in retirement account or life income fund if they expect less than $41,067 in income over the next 12 months. They can also access these funds if they’re in default on their mortgage or rent and face possible eviction or for medical or dental expenses, according to a press release.
While the 2021 maximum withdrawal in the event of reduced income is $30,800 minus 75 per cent of the applicant’s anticipated total income for the 12-month period, the release noted there’s no limit on how much may be removed for default on a mortgage or rent or for medical or dental expenses. Financial institutions will be able to directly approve these applications and the government’s processing fee will also be eliminated.
Nova Scotia is the latest province to amend legislation on early access to retirement savings. In March, Newfoundland and Labrador began allowing residents to unlock retirement benefits for reasons of financial hardship or non-residency in Canada.