What was the announcement regarding RRIF minimums in 2020?
The federal government reduced the 2020 minimum payment for RRIF, LIF, and Spousal RRIF accounts by 25% given the volatility in the market driven by COVID-19. Therefore, the new minimum payment is equivalent to 75% of the old minimum payment, prior to this announcement.
What amount must a client withdraw in 2020?
A client must withdraw at least the new minimum payment amount, but can withdraw up to the old minimum payment without any withholding tax on excess funds.
Note that withholding taxes in excess of the minimum payment will be calculated using the old minimum payment amount.
Where do I find the new minimum payment amount?
We have updated the 2020 minimum payment amount on clients’ profiles under the “Withdrawals” tab. Please see the screenshot below — the new minimum payment can be found on the clients profile in the red box below.
If my client has an existing withdrawal set up — has that amount changed?
No — since the government is allowing either the old minimum payment or the new minimum payment to be withdrawn in 2020, we have not made any changes to any previously set up withdrawals.
If your client wishes to adjust their payments, you are able to cancel the existing withdrawal and re-set up the new amount.
What if my client has already withdrawn their old minimum payment amount and they want to elect to take the new minimum payment?
The regulations have stated that any amount already withdrawn cannot be pulled back, therefore, the client will have taken their old minimum payment amount for 2020.
How does this impact LIF minimums and maximums?
The above applies to ALL RRIFs and LIFs as the minimum is the same for all LIFs (only the maximum varies by jurisdiction). LIF maximums have not changed.