What is an RDSP?

An RDSP is a tax-advantaged savings plan that helps Canadians with disabilities save for long-term needs while receiving government support.

  • Contributions are not tax-deductible; investment growth is tax-sheltered until withdrawal
  • Government grants and bonds boost savings for eligible beneficiaries
  • Withdrawals can provide long-term financial assistance, often in retirement
  • Lifetime contribution limit: $200,000 per beneficiary

Eligibility & Contribution Details

Who Can Open an RDSP

  • Residency: Canadian resident
  • Age: Beneficiary must be under 60 when the plan is opened
  • SIN: Valid SIN required
  • DTC: Beneficiary must be eligible for the Disability Tax Credit when the plan is opened

Government Support Programs

Canada Disability Savings Grant

  • Provides matching funds to eligible RDSP contributions, increasing savings for many families
  • Maximum annual grant and lifetime totals exist; the lifetime maximum is $70,000
  • Lower-income beneficiaries receive higher matching rates

Canada Disability Savings Bond

  • Paid directly to RDSPs for eligible low and modest income beneficiaries
  • Maximum annual bond and lifetime totals exist; the lifetime maximum is $20,000
  • No personal contribution is required to receive the bond

For precise eligibility rules and current annual limits consult the Government of Canada or your advisor. Income thresholds are indexed and can change.

Carry-Forward Provisions

Catch-up Opportunities

  • You can catch up on missed grant and bond entitlements from the previous 10 years, subject to annual program limits and eligibility
  • Rules for claiming past entitlements are specific and time limited; confirm the details before making catch-up contributions

Investment Options & Withdrawals

Investment Options

  • Stocks and ETFs
  • Mutual funds
  • Bonds and GICs
  • Cash and high interest savings

Withdrawal Considerations

  • Withdrawals include Disability Assistance Payments, which can be scheduled or one time
  • Grant and bond repayment rules can apply if withdrawals happen within the 10-year assistance holdback period
  • The taxable portion of a withdrawal can include grants, bonds, investment income, and qualifying rollovers

Key Considerations

  • Grant and bond eligibility ends after December 31 of the year the beneficiary turns 49, though the plan can stay open longer
  • Eligibility for matching funds is based on family income reported on recent tax returns; thresholds are indexed
  • Proportional repayment rule applies: government contributions may need to be repaid if funds are withdrawn within the applicable period
  • If a beneficiary loses Disability Tax Credit eligibility there are election rules and timelines that can affect the plan
  • Contributions are not tax-deductible but grow tax-sheltered inside the plan

Trying to sort out RDSP eligibility or contribution timing?

We help individuals and families across Atlantic Canada work through RDSP eligibility, grant and bond rules, and contribution timing so the plan fits real life. If you'd like help reviewing your next step, we can do that with you.

Schedule a Consultation

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