Registered Disability Savings Plan (RDSP)

The RDSP is a vehicle designed to assist families with long‐term financial security of relatives with disabilities.

Highlights of the Registered Disability Savings Plan

▪ The RDSP plan allows funds to be invested on a tax deferred basis until withdrawal.
▪ Any individual eligible for the Disability Tax Credit may establish an RDSP
▪ In the case of a minor child, a parent or guardian can establish and direct the RDSP
▪ $200,000 lifetime contribution limit with no annual maximum.
▪ Contributions permitted by the individual, family member and/or friends
▪ No restrictions on when the funds can be used or for what purpose
▪ Upon withdrawal, the income, the Grant, and the Bond are taxed in the hands of the beneficiary, and are likely to be taxed at a relatively low rate.

Highlights of the Canada Disability Savings Grant

▪ The Canada Disability Savings Grant provides a federal contribution to assist families in saving for the future.  Larger grants for families in the lower and middle‐income categories.
▪ When annual net income is less than $75,769 the grant will contribute:
∼ $3 for every $1 contributed on the first $500
∼ $2 for every $1 contributed on the next $1,000.
▪ When annual net income is over $75,769, the grant will contribute:
∼ $1 for every $1 contributed up to $1,000.
▪ Grant can be received up to a maximum of $70,000 or until the year the beneficiary turns 50.
▪ Beneficiaries must wait 10 years after last Grant or Bond is received to avoid penalties. 

Highlights of the Canada Disability Savings Bond

▪ If annual net income is $21,287 or less, the Canada Disability Savings Bond will provide $1,000 per year without any contribution requirement which makes RDSP accessible to persons with disabilities whose family does not have the resources to make contributions.
▪ The Bond can be received for up to $20,000 or until the year the person turns 50. 

Payments from the RDSP

▪ The beneficiary of a plan can receive Disability Savings Payments as soon as the RDSP is established. There are no restrictions on when the funds can be withdrawn of for what purpose, but any Grant or Bond received within 10 years must be repaid.
▪ Each dollar withdrawn is considered to be comprised of contribution, Grant or Bond, and income. The proportion that is Grant, Bond or income is taxable.