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Canada Disability Savings Grant (CDSG)

New for 2011: 10-Year Carry Forward of CDSG Entitlement

  • Beneficiaries may now qualify for past CDSG entitlement for the preceding 10 years (back to 2008, the inception of RDSPs)
  • The amount of eligible past CDSG depends on the contribution amount and the beneficiary’s family net income in those years. The matching rate will be the same as the rate that would have applied if the contribution had been made in the year in which the CDSG entitlement was earned
  • Up to a maximum of $10,500 CSDG can be paid in year, with the remainder of the unused CDSG past entitlement to be carried forward to future years
  • Eligibility based on the beneficiary’s disability tax credit (DTC) status and age in those years
  • The last day contributions are eligible to receive past CDSG entitlement is December 31st the year in which the beneficiary turns 49 years of age

Government grants can substantially increase the wealth accumulated in an RDSP.

$70,000 Lifetime Limit

RDSP contributions may be eligible for the Canada Disability Grant (CDSG). Contributions may qualify for federal government grants of up to $3,500 per year, per beneficiary, subject to a lifetime maximum of $70,000.

$3,500 Annual Maximum

The maximum annual CDSG is $3,500 for families with net incomes of equal or less than $85,414 The grant amounts to $3 for every $1 contributed to an RDSP on the first $500 of contributions; and $2 for every $1 contributed on the next $1,000 of contributions. Families with higher net incomes are eligible for $1,000 annually. Grants of $1 are provided for every $1 contributed on the first $1,000 of contributions.

Before the end of the year in which the beneficiary turns 18, the family income of the beneficiary’s parents or legal guardian is used to determine grant amounts. In the year the beneficiary turns 19, payments are based on his or her net income (and spouse’s net income if applicable). A beneficiary may be eligible to receive grants until the end of the year in which he or she turns 49.

Annual Family Net Income Matching CDSG on
Annual RDSP Contributions		 Maximum Annual CDSG
Less than or equal to $85,414* On the first $500 in annual
contributions
($3 for every $1 contributed)		 $1,500
  On the next $1,000 in annual
contributions
($2 for every $1 contributed)		 $2,000
     
Greater than $85,414* or no income info with CRA On the first $1,000 in annual
contributions
($1 for every $1 contributed)		 $1,000

For further information regarding the CDSG please refer to this website from Human Resources and Skills Development Canada.

* Income amounts shown are for 2012 based on income tax returns filed for the 2010 tax year. These income thresholds will be indexed annually by CRA.