RDSP is a special government program that helps eligible Canadians with disabilities save for their long-term financial security.

Features and Benefits

• Defer taxes on investment income – Taxes on investment income and capital gains earned are deferred while in the RDSP, helping the plan to grow faster.
• Receive Government contributions – The Federal Government will match your contributions up to $70,000 in Canada Disability Savings Grants and low-income families may qualify for additional help of up to $20,000 in Canada Disability Savings Bonds.

RDSP Eligibility

• be eligible for the Disability Tax Credit based on the Canada Revenue Agency – criteria
• have a Social Insurance Number (SIN)
• be under 60 years of age
• be a resident of Canada when the plan is opened

Who can open an RDSP account?

• An RDSP beneficiary over the age of majority who is competent to sign a contract is generally the holder.
• If the RDSP beneficiary is over the age of majority but is not competent to sign a contract, the holder is generally an individual or public department legally authorized to act in the beneficiary’s name.
• If the RDSP beneficiary is under the age of majority, the holder can be a legal parent, legal representative or public department legally authorized to act in the beneficiary’s name.

Contribution rules

• The following may contribute to the plan:
  • the holder
  • anyone with written permission from the holder
• There is no annual contribution limit, but the lifetime limit is $200,000.
• The contribution period is January 1 to December 31.
• Contributions to an RDSP cannot be deducted from taxable income.
• You can pay regular instalments of a minimum of $100. Payment of the minimum must be made monthly.
• Contributions may be made to the plan until the end of the year the beneficiary turns 59.
• To receive the Canada Disability Savings Grant, you must make your contributions to the plan before the end of the year the beneficiary turns 49.

Withdrawals

Annual withdrawals

Annual withdrawals, or Lifetime Disability Assistance Payments (LDAPs), begin by the end of the year in which the beneficiary turns 60. These annual payments will then continue for the life of the beneficiary.

One-time withdrawal

This form of withdrawal is known as a Disability Assistance Payments (DAPs), and can be paid to the beneficiary any time after the RDSP is established.

Opening an RDSP Account

Feel free to contact a Prudentia Advisor if you have any questions or would like to open an RDSP. We will be happy to help.