Guest Post by Eileen Reppenhagen, CGA, ACG, CL

www.taxdetective.ca  

When a person goes into the bank (at present the Bank of Montreal and Royal Bank of Canada) they are required to complete an application.  The application is sent to Public Works as there is not a system at present that can transmit the information from the bank to HRSDC.  Public Works sends this information to HRSDC where the validation procedure takes place.  HRSDC sends a data tape to CRA to verify eligibility for the DTC and the citizenship of the beneficiary.  This information is then transmitted back to HRSDC.  If the beneficiary is eligible for the DTC, information is then sent from HRSDC to the RPD where the plan is registered.

Because the RDSP was not made available until the end of 2008, interested applicants are not being penalized.  They have until March 2, 2009 to apply for the 2008 year.  Registered Plans (CRA area involved) will maintain the unregistered plan until April 30, 2010 and then send the client a letter informing them of the closure if nothing has been received.  A person can still contribute to the plan, even though eligibility for the DTC may not have been established. 

The grant and bond portion of the RDSP will be retroactively applied when DTC eligibility has been confirmed.  As an example, if a person applies on March 1, 2009 for the 2008 year and does not receive confirmation of their eligibility until October 2010, they would still receive grants and bonds (where eligible) for the 2008, 2009 and 2010 years. 

Eileen Reppenhagen, CGA, ACG, CL

www.taxdetective.ca