What “Increasing LICO-based Financial Requirements” Mean For Study/Work Permit Applicants in Late 2025

Governments and immigration authorities are increasingly tying financial eligibility thresholds to macroeconomic indices. One such metric is the Low-Income Cut-Off (LICO), which signals the income level below which a household is considered to be spending an “unusual” share on necessities. In Canada, the immigration authority (IRCC) has used LICO as a benchmark when revising proof-of-funds requirements. As of September 1, 2025, international students (and in certain contexts, work permit applicants) will need to meet higher financial thresholds. Here is what that means in practice, who’s affected, and how to adjust your strategy.

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What Is LICO and Why It Matters?

Low-Income Cut-Off (LICO) is a statistical measure used by Statistics Canada to represent the income level at which families are deemed to spend a disproportionately large share of income on basic needs (food, shelter, clothing). When IRCC indexes its “living cost requirement” for international applicants against LICO, it seeks to ensure that those arriving can maintain a modest standard of living without undue financial stress.

In December 2023, IRCC announced that the cost-of-living financial requirement for study permit applicants would be revised upward and routinely tied to LICO updates. The aim is to prevent students from arriving underfunded and to reduce vulnerability to exploitation.

What’s Changing in 2025

Beginning September 1, 2025, new minimum financial thresholds apply to study permit applications (outside Quebec). A single applicant must now demonstrate 22,895 CAD as proof of living expenses (in addition to tuition and travel) - an increase of approximately 2,260 CAD over the previous requirement of 20,635 CAD.

The requirements scale upward for multiple family members. For example:

• 2 persons: 28,502 CAD
• 3 persons: 35,040 CAD
• 4 persons: 42,543 CAD
• And so on, adding roughly CAD 6,170 per additional person beyond seven

Note that applications submitted before September 1, 2025 will still be evaluated under the older thresholds.

Who Is Affected?

This change primarily impacts international students seeking study permits. However, in certain cases (such as student-to-work transitions or combined study/work applications), applicants may also need to satisfy these thresholds. It more significantly affects those who plan to bring dependents (spouses, children), since their incremental funding burden increases sharply.

For applicants from countries with weaker currencies or those relying heavily on scholarships or sponsorship, the heightened bar could pose a challenge. The shift may also influence timing decisions - many applicants may try to submit before the cutoff date to avoid the new, higher standard.

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Implications & Risks

Some practical implications include:

• Tighter budgets: You’ll need more cash reserves or stronger financial backing to qualify.
• Stricter documentation: IRCC will demand clearer proof - bank statements, GICs, scholarship letters, education loans, sponsor affidavits, etc.
• Higher rejection risk: Underfunded applications or weak documentation might lead to automatic refusals.
• Timing strategies: Applicants might rush to submit before September 2025 to benefit from the old thresholds.
• Equity concerns: Students from lower-income regions might be disproportionately affected by the jump in required funds.

How to Meet the New Requirements

To meet the new financial threshold, consider the following:

• Maintain strong bank statements: Banks statements over the past 4 months that show stable and sufficient funds.
• Use GICs or locked accounts: Some students use Canadian GICs (Guaranteed Investment Certificates) or pre-funded accounts as proof.
• Secure student loans: Have documented educational loans or official letters from lenders showing commitment.
• Get sponsorship letter
• Scholarships and awards: Formal scholarship or bursary letters can supplement proof of funds.
• Plan ahead: If your intake is after September 2025, begin building your financial profile now.

What If You Don’t Meet the New Requirements?

If you fall short, your application could be refused. Some alternative strategies include:

• Deferring the intake and using the time to build more savings or secure additional funding
• Applying for scholarships or institutional support to bridge the gap
• Bringing a stronger co-sponsor or combining assets with parents/guardians
• Considering alternate destinations or programs with lower financial barriers

The shift to “LICO-based financial requirements” for late 2025 is a significant recalibration of how Canada assesses proof of funds for international students and related permit holders. While it adds pressure, it also creates clarity and aligns expectations with real living costs. Prospective applicants should take note: budget more conservatively, document more rigorously, and plan timelines strategically. If you aim to apply soon, submitting before the September 2025 threshold may save you from meeting the steeper bar.

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Frequently Asked Questions

Does This Change Affect All Provinces, Including Quebec?

No. These new financial thresholds apply to all provinces and territories except Quebec, which maintains its own rules and cost-of-living benchmarks.

Can I Use Scholarship or Bursary Awards as Proof of Funds?

Yes - a formal scholarship or bursary letter (with amounts and duration) is generally accepted as part of proof of funds, provided it is credible and verifiable.

If I Submit my Study Permit Application on August 30, 2025, Which Financial Requirement Applies?

Your application would be assessed under the older threshold (CAD 20,635 for a single applicant), since the revised rules only take effect for applications filed on or after September 1, 2025.