The Registered Disability Savings Plan (RDSP) is intended to assist eligible Canadians with disabilities and their families in saving for the long-term financial security of the person with a disability.
This unique savings program allows savings to grow in a tax-deferred environment. The RDSP is also eligible to receive government assistance in the form of grants totaling up to $70,000 and bonds totaling up to $20,000.
- No annual contribution limits
- Lifetime limit of $200,000 for total contributions
- Contributions can be made until the end of the year the beneficiary turns 59
- Investment income and capital gains can grow tax-free
- Contributions are not tax-deductible
- Contributions may be eligible for the Canada Disability Savings Grant (CDSG), which provides matching contributions of up to $3,500 annually until the end of the year the beneficiary turns 49 ($70,000 lifetime limit)
The plan may also be eligible for the Canada Disability Savings Bond (CDSB), which pays up to $1,000 annually until the end of the year the beneficiary turns 49 to low-income families regardless of whether RDSP contributions are made ($20,000 lifetime limit)
- Withdrawals can be used for any purpose, as long as it is for the benefit of the person with the disability (the plan's beneficiary)
- The beneficiary must begin receiving payments from the plan by the end of the year he/she turns 60 and each beneficiary can only have one RDSP
- Not tax deductible
- Can be made until the end of the year in which the beneficiary turns age 59
- Anyone can contribute as a gift for the beneficiary with written consent from the plan holder
- Can be made through your financial institution in person or online
Your annual RDSP contributions may qualify for matching grants based on the amount contributed and your total family income.
Family income less than $90,563:
- On the first $500: $3 for every $1 contributed to a maximum of $1,500
- On the next $1,000: $2 for every $1 contributed to a maximum of $2,000
Family income greater than $90,563 (or no income tax return):
- On the first $1,000: $1 for every $1 contributed to a maximum of $1,000
We can work together to ensure that you maximize these grants while minimizing your tax liabilites.
Regardless of whether RDSP contributions are made, lower income families may qualify for government assistance in the form of a bond.
- For family income $26,364 or less: $1,000
- For family income between $26,364 and $45,282: $1,000 is reduced on a pro-rated basis
- Families with income greater than $45,282 (or no tax return) are ineligible for this bond
- Withdrawals can be made anytime and for any purpose to the benefit of the beneficiary.
- As the plan is intended to encourage long-term savings, withdrawals will result in the repayment of all CDSG and CDSB amounts paid into the plan in the previous 10 years
- Contributions can be withdrawn tax-free; however, any growth (i.e. income or capital gains) plus any CDSG and CDSB amounts in the plan are included in the beneficiary's income in the year of withdrawal
- The beneficiary must begin receiving regular payments from the plan by the end of the year he/she turns age 60. Once regular payments start they will continue for the life of the beneficiary
- Payments do not affect eligibility for Federal Government benefits such as the GST credit and the Canada Child Tax Benefit. However, support payments or means-tested disability pensions received from the province where the beneficiary resides may be reduced or eliminated. Anyone opening an RDSP must consider and confirm, before the plan is funded, the potential impact on the beneficiary's support payments or government assistance. The contribution is irrevocable and cannot be recovered from the RDSP once paid