Not including BC, Newfoundland and Yukon (who have all already exempted the RDSP), many provinces/territories are in the midst of deciding how the RDSP will affect someone who is receiving Disability Benefits. We decided to put together a Top 10 list of why we think it is important these provinces/territories exempt the RDSP as an asset and income. If you have any reasons you would like to include feel free to post a comment and add to our list.
1. Poverty reduction – Governments cannot provide for the future financial security and social well-being of people with a disability on their own. Governments need to begin forging a new relationship with families to enable and encourage their contributions. As many new programs such as SEDI’s Independent Learning Accounts (ILA’s) are demonstrating, the ability to accumulate assets and save for the future has a direct impact on poverty reduction. In fact, when the Newfoundland Government decided to exempt the RDSP from asset and income tests, they made this decision as part of their Provincial Poverty Reduction Strategy (click here).
2. Positive Messaging – Exempting the RDSP as an asset and income would send a strong message to families that Provincial Governments understand their ability and determination to help their family member or friend with a disability. Allowing the full benefits of the RDSP would go a long way towards rebuilding trust between government and communities, and stimulate a positive partnership between the two. Families and friends of people with disabilities need to begin planning beyond their lifetime and need the security of clear public policy that underlines provincial governments’ willingness to help.
3. Establish a New Vision – Exempting the RDSP would help establish a new vision that acknowledges the huge contribution that people with disabilities have to make to the community. Allowing people with disabilities and their families the opportunity to contribute towards their own well-being will go a long way towards eradicating the notion that people with disabilities have little to contribute. Increased financial security will encourage people with disabilities to enter into the community and participate in activities, employment, volunteering, education, etc.
4. Equality – British Columbia, Newfoundland, and Yukon have all exempted the RDSP from any asset and income tests. If other provinces/territories do not fully exempt the RDSP from their own asset and income tests it will prove to be a disadvantage and unequal treatment of people with disabilities in other provinces/territories.
5. Family Resiliency – Often there are significant restrictions and penalties around familial support directed towards a person with a disability receiving Disability Benefits. Families and friends who are in a position to help are often unable for fear they will disqualify their loved one from receiving their much-needed supports. Exempting the RDSP would promote the resiliency of families/people to solve some of their own problems, especially for a marginalized disability population that has significantly higher costs for daily living.
6. Future Government Savings and Revenues – The RDSP will generate future government program savings and revenues as people with disabilities become more secure financially. The residual effects of allowing people with disabilities to save for their future will alleviate some of the strain from government supports and programs.
7. Maximizing Federal Contributions – The RDSP provides no cost to provincial governments and has the potential to leverage huge amounts from the federal government. By accommodating the RDSP provincial governments can inject a significant amount of money into their respective disability community without raising their costs for programs and supports.
8. Encourage Home Ownership – For many people with a disability the likelihood of ever owning a home is pretty remote. With many of the current provincial welfare systems discouraging the accumulation of savings or employment, many people with disabilities will have to remain in institutions or group homes. This is worrying considering the majority of Canadians view owning their own home as one of the essential determinants of their social and financial well-being. The RDSP provides people with disabilities the opportunity and incentive to save for a home, and in realizing this dream, become more active and involved in the community.
9. Financial Literacy – In most provinces the legislation and regulations surrounding those receiving disability benefits is convoluted and complicated. Simply trying to understand all the rules and regulations associated with supports and programs is arduous, time-consuming, and often impossible to manage. Providing a full exemption of the RDSP will simplify the process of understanding the plan and will ensure everyone who is eligible for the RDSP can benefit from it. If provinces fail to exempt the RDSP many individuals and families will simply refrain from setting one up as they do not want to be disqualified from receiving disability benefits.
10. Community Support – The support for a full exemption of the RDSP is immense and spans across the country. Any province that takes this monumental step will receive widespread support for their position and will solidify themselves as an example of a forward-thinking government which understands the needs for new solutions in an ever-changing societal and political environment. As we have seen in BC, Newfoundland, and Yukon, provincial governments who exempt the RDSP are receiving well-deserved praise and support for their efforts to move the disability agenda in a positive and progressive direction.