Registered Disability Savings Plans (RDSPs)
People with disabilities and their loved ones face a distinct set of financial challenges throughout their lives. To help address these challenges, the Government of Canada introduced the Registered Disability Savings Plan (RDSP) in 2008. Designed to help build long-term financial security for disabled persons, the RDSP makes it easier to accumulate funds by providing assisted savings and tax-deferred investment growth.
Key benefits of an RDSP
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Money contributed grows tax free.
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Anyone can contribute to an RDSP with the written consent of the account holder.
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Contributions can be matched, based on family income, with up to $3,500 a year in Canada Disability Savings Grants (CDSG) and up to $1,000 a year in Canada Disability Savings Bonds (CDSB).
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Carry forward on CDSG and CDSB is available back 10 years or to date of diagnosis.
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The total lifetime contribution for each beneficiary is $200,000, with no annual contribution limits.
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If a parent or grandparent passes away and has a financially dependent child or grandchild, they can transfer up to $200,000 of their RRSP/RRIF or RPP to the dependent’s RDSP on a tax-deferred basis.
To qualify for an RDSP, an investor must:
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Be eligible for the Disability Tax Credit
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Be a resident of Canada
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Be less than 60 years of age
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Have a valid SIN