The Registered Disability Savings Plan, or RDSP, is a registered plan for parents or guardians to save for the future of a Canadian with a disability. Like an RESP, you do not receive a tax deduction on contributions to a Registered Disability Savings Plan but the money can grow while sheltered from tax, with the beneficiary being taxed only when they withdraw the money. There are no annual contribution limits, but a lifetime limit of $200,000. While the government includes grants and bonds, these need to stay in for at least 10 years to avoid being clawed back.
Canada Disability Savings Grant (CDSG)
The Canada Disability Savings Grant can match as much as 300% of the contribution into an RDSP with a lifetime grant of up to $70,000. To be eligible for the CDSG, you must be eligible for the Disability Tax Credit and under 49 years of age.
If the family income is less than $81,941 then the beneficiary will receive 300% matched on the first $500 contributed and 200% on the next $1,000. So if the beneficiary’s family were to contribute $1,500 a year then the government would include a grant of $3,500 that same year. A beneficiary with a family income above $81,941 can receive a 100% match on the first $1,000.
Canada Disability Savings Bond (CDSB)
The Canada Disability Savings Bond is an additional deposit available from the government for those with a family income of less than $40,970. Other than the low income considerations, the CDSB has the same requirements as the Canada Disability Savings Grant.
Family incomes of less than $23,855 are eligible for the complete annual bond of $1,000, with a total lifetime. The bond reduces as incomes increase from $23,855 up to $40,970.
If you know someone who collects the Disability Tax Credit but may not know about the under publicized Registered Disability Savings Plan, please let them or their family members know about this great program which is available through all the major banks.
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Tom Drake is the owner and head writer of Canadian Finance Blog.
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You say that the plan is for parents or guardians, while it is a great tools for parents to save for the childrens future it is also for adults with a disability to save for themselves. A parent or guardian can open the plan on behalf of a dependent, but any Canadian of legal age can open the plan and make contributions to the plan for their own benefit in the future.
As a financial planner with a disability, I have not only helped other opens plans, but have opened my own as well. I would be happy to answer any questions anyone might have about the plan.
Hi Ryan.
I myself was a financial planner till I became disabled with a condition call Bi-polor. I through this condition have met multitudes of people that likely qulaify for this bennit but would need quidance and encouragement to start one.These people are largely on aish. Would you know a supplier of a RDSP That may pay for my expenses of bringing these people in. I am on a total disabily claim with a lapsed licence and have a
hard time finding a sponsering company though my Doctor says I may able to work. I dont want to jeprodise my disabilty claim.
Thanks Dan
Hi Dan,
Talk to us! Since we are financial advisors we can help.
Our web site is
disability-tax-credit.ca
Sounds like a great plan, especially if it allows people to save for themselves should they have a disability. A lot of people don’t really know the best way to put money aside and keep it save for people who have a disability.
If on is over 18 you can turn $20,000 into over $164,000 in twenty years using Government and corporate bonds!
Many canadians are unaware that the canadian government offers tax benefits and grants for anyone who has a physical or mental disability. Unfortunately collecting these benefits can be complicated and stressful. At the Canadian Disability Corporation they simplify the process to make sure you obtain every dollar possible from the CRA. On top of this, they will also ensure you’re applied to other programs available to people with disabilities such as the Registered Disability Savings Plan (RDSP).
http://www.canadadisability.ca/
One must qualify for the Disability Tax Credit to receive an RDSP. Please contact us today, if you need the funds required to start up an RDSP. Between $1,400 and $35,000 for those with a disability and their relatives.
I wish everyone could know how Canadian Disability Corp. CDC has saved me.
Sometimes you don’t believe good things can happen. I was wrong; I had never seen a company do so much for me for so little.
Thank you again and again.
I recommend there secured website,
http://canadadisability.ca/disabilities.html
. One question though- does this benefit only apply if you are resident in Canada ?
Also, can non-Canadian tax-payers contribute to the scheme?
Thanks you for sharing such a nice information i am glad to find this post very valuable for me
Hi, fantastic post I have just joined your mailing list
In order to qualify for the Registered Disability Savings Plan (RDSP) you must first qualify for the Disability Tax Credit (DTC) first. We provide eligibility assessments free of charge!