Old, hearing-impaired listeners generally benefit little from lateral separation of multiple talkers when listening to one of them. This study aimed to determine how spatial release from masking (SRM) in such listeners is affected when the interaural time differences (ITDs) in the temporal fine structure (TFS) are manipulated by tone-vocoding (TVC) at the ears by a master hearing aid system. Word recall was compared, with and without TVC, when target and masker sentences from a closed set were played simultaneously from the front loudspeaker (co-located) and when the maskers were played 45° to the left and right of the listener (separated). For 20 hearing-impaired listeners aged 64 to 86, SRM was 3.7 dB smaller with TVC than without TVC. This difference in SRM correlated with mean audiometric thresholds below 1.5 kHz, even when monaural TFS sensitivity (discrimination of frequency-shifts in identically filtered complexes) was partialed out, suggesting that low-frequency audiometric thresholds may be a good indicator of candidacy for hearing aids that preserve ITDs. The TVC difference in SRM was not correlated with age, pure-tone ITD thresholds, nor fundamental frequency difference limens, and only with monaural TFS sensitivity before control for low-frequency audiometric thresholds.