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Registered Disability Savings Plan (RDSP)



Frequently asked questions

  • What’s an RDSP?
    The Registered Disability Savings Plan (RDSP) is a tax-sheltered plan created by the federal government to help people with disabilities build long-term financial security.
  • What are the advantages of an RDSP?
    For the beneficiary of an RDSP, there are three big advantages. Earnings grow tax-free, so your savings grow faster. RDSPs are also eligible for government incentives, up to $70,000 in grants and $20,000 in bonds. And payments to a beneficiary from an RDSP do not affect income-tested programs like Old Age Security, the Guaranteed Income Supplement and the Canada Pension Plan.
  • What is the disability tax credit?
    The disability tax credit is a federal income tax credit for people with disabilities and people who support them. It was created to help offset some of the unavoidable expenses unique to those with severe and prolonged impairment. A list of maximum credit amounts for previous years can be found here.
  • Who can contribute to an RDSP?
    Anyone can contribute to an RDSP, as long as they have written permission from the account holder.
  • Are RDSP contributions tax deductible?
    No, contributions to an RDSP are not tax deductible. But when those contributions are paid out to the beneficiary they won’t count as income.
  • What government incentives is an RDSP eligible for?
    There are two government incentives available through RDSPs. The Canada Disability Savings Grant can add up to $3,500 a year to a lifetime maximum of $70,000. The Canada Disability Savings Bond can add up to $1,000 annually to a lifetime maximum of $20,000. So that’s a great incentive for starting a plan early!
  • Is there a contribution limit?
    There’s no annual contribution limit for an RDSP. The lifetime maximum for a beneficiary is $200,000.
  • How long can I contribute to an RDSP?
    Good question. You can contribute until the end of the calendar year in which the beneficiary turns 59. Government incentives can only be received up to the end of the calendar year in which the beneficiary turns 49.
  • How do RDSP withdrawals work?
    A beneficiary can access funds from their RDSP by either annual payments (Lifetime Disability Assistance Payments) or occasional lump sum payments (Disability Assistance Payments). These payments can be used for any purpose. Income tax doesn’t apply to the original contributions, only to investment earnings, rollover amounts, grants and bonds.

    There are a few rules that apply to RDSP withdrawals. Beneficiaries should plan to earn all their grants and bonds 10 years before they start drawing an income, because any grants or bonds received in the 10 years preceding withdrawals or payments must be repaid to the government. Lifetime Disability Assistance Payments can begin at any time, but have to start by the end of the calendar year in which the beneficiary turns 60.

    To find out more about RDSP payments and rules, check the Government of Canada website.
A young boy in glasses and a polo shirt laughs while using a walking aid. The sun shines through the trees in the background.A young boy in glasses and a polo shirt laughs while using a walking aid. The sun shines through the trees in the background.

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