The Registered Disability Savings Plan (RDSP) was introduced by the Government of Canada in 2008 and provides people with disabilities an easy and effective way to save and invest for their long-term financial security.  The government offers some unparalleled incentives through grants and bonds that help those with RDSP accounts accumulate more.  Contact me today to learn more about the RDSP program and how it can greatly benefit people with disabilities.

Key benefits and features of an RDSP:

  • earnings grow tax-free until the money is taken out of the plan (similar to RESP accounts)
  • may be eligible for government incentives of up to an annual amount of $3,500 in grants (see chart below) and $1,000 in bonds
  • income payments from RDSPs do not affect OAS, CPP and GIS
  • in British Columbia, RDSP beneficiaries will still qualify for existing provincial social assistance
  • no annual limit on contributions and the lifetime maximum is $200,000
  • unused grants and bonds are carried forward with maximum payable of $10,500 grants and $11,000 bonds in any one year
  • wide selection of investment products available

Requirements to open an RDSP:

  1. must be a Canadian resident
  2. have a valid Social Insurance Number
  3. be under the age of 60
  4. is eligible to claim the Disability Tax Credit

Annual net income

Annual contribution

Earns maximum Annual Grant

$87,123 or less*

$1,500

$3,500

 

($3 for every $1 contributed on first $500 in annual contributions)

 

($2 for every $1 contributed on the next $1,000 in annual contributions)

More than $87,123*

$1,000

$1,000 ($1 of grant for every $1 contributed)

* Government grants and bonds are based on net annual income of two years earlier. The government sets the income thresholds annually. Illustrated are 2013 income thresholds, based on 2011 net annual income.