RDSPs
Helping people with disabilities save for the future.
If you currently receive the Disability Tax Credit, you may qualify for a Registered Disability Savings Plan (RDSP). An RDSP is a long-term savings plan where earnings accumulate tax-free until money is taken out. The government will pay matching grants and bonds up to $4,500 annually, depending on the amount you've contributed and your family income.
You should consider opening an RDSP if you or a dependent have a long-term disability and are:
- Under the age of 60
- A Canadian resident with a social insurance number
- Eligible for the Disability Tax Credit
RDSP guidelines and contributions.
An RDSP can be created by the beneficiary or by another person who is legally authorized to act for them (i.e. a parent or guardian). You can get a complete overview here.
Anyone can contribute to an RDSP if they get the written permission of the RDSP holder (the person or organization that opens and manages the RDSP).
In terms of how much can be contributed, there is a $200,000 lifetime contribution limit – with no annual limit on contributions. To encourage savings, grants and bonds must remain in the RDSP for at least 10 years.
The B.C. government fully exempts RDSPs when calculating an individual's eligibility for provincial disability assistance.
Don't forget the government grants.
The Canada Disability Savings Grant is a matching grant the government deposits into an RDSP. Based on the amount contributed and the beneficiary's income (or the family's if the beneficiary is a minor), the government will deposit a maximum of $3,500 each year, with a limit of $70,000 over the beneficiary's lifetime. Grants are paid into the RDSP until the year the beneficiary turns 49 years old.
The government will also deposit a Canada Disability Savings Bond of up to $1,000 a year into the RDSPs of low and modest income Canadians. No contributions are necessary to receive the bond.
You can open an RDSP and apply for the grant and bond by visiting any branch location.