1.2.4 Replacing lost income

From: Financial Consumer Agency of Canada

If your work income stops—for example, if you lose your job or can't work for some other reason—you need other sources of income. Here are some suggestions.

Workplace and government plans

  • You may be eligible for Employment Insurance benefits.
  • You may be able to draw on salary or vacation pay you have not been paid yet.
  • You may be eligible for income assistance programs. (Contact your provincial or territorial government ministry responsible for social assistance programs.)


  • You can buy insurance in case you lose your job. This insurance will pay your mortgage, credit card payments and other loans until you get back to work. Disability insurance provides income each month if you get sick or hurt.
  • You must apply for insurance before the loss of income occurs. Also, there may be limits or conditions on the insurance, so find out exactly what the coverage is.
  • You may have insurance as part of an individual or company group plan.


  • Use emergency funds first, if you have them, to pay your bills.
  • You may be able to draw on your retirement savings. However, try to avoid this if possible because you will need the funds in the future. Also, if you withdraw funds from a Registered Retirement Savings Plan (RRSP), up to 30 percent will be withheld for income tax.


  • You may sell your home or other property for cash, then buy or rent another home for less.
  • You may be able to rent out part of your home to bring in extra money.


  • You may be able to borrow money from friends or family, or from the bank.
  • You may be able to get a loan based on the money you have put into your home.
  • Use loans as a last resort.


Plan ahead—before a crisis hits—so you can handle the unexpected. Experts recommend putting aside at least three months’ worth of household expenses for an emergency fund. Know where you can turn for assistance if your income drops.

For more information about replacing lost income, see the Ontario Securities Commission video "How to handle being laid off."

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