I want to inform you about a program offered by our government that I am finding most people are not aware of. It is called the Registered Disability Savings Plan. The number of accounts currently set up represents only about 11 per cent of the roughly 550,000 Canadians who would be eligible for an RDSP, showing that the plans are underused, even by their main target group – disabled individuals and their families. You should consider opening a Registered Disability Savings Plan (RDSP) if you have a long-term disability and are under age 60, a Canadian resident with a Social Insurance Number, are eligible for the Disability Tax Credit and are looking for a long-term savings plan.

The RDSP is a long-term savings plan to help Canadians with disabilities and their families save for the future. The “beneficiary” of the RDSP is the person who will receive the money in the future. Anyone can contribute to an RDSP if they get the written permission of the RDSP holder. There is no annual contribution limit to the RDSP, but there is a lifetime contribution limit of $200,000.

The deadline for contributions each year to an RDSP is Dec. 31 of that year.

To help you save, the Government pays a matching grant of up to $3,500, depending on the amount contributed and your family income. The Government also pays a bond of up to $1,000 a year into the RDSPs of low-income and modest-income Canadians.

Grants and bonds are paid until the year the beneficiary turns 49.

To encourage savings, grants and bonds must remain in the RDSP for at least 10 years.

There is no impact on federal benefits, such as the Canada Child Tax Benefit, the Goods and Services Tax Credit, Old Age Security, and Employment Insurance.

In all provinces and territories, RDSPs will have little or no impact on social assistance payments.

To get additional information go to: http://www.cra-arc.gc.ca/rdsp/

Looks like a great source for those on a disability assistance program. It makes cents to me.


Will Carey is an independent financial advisor.