Annual Income: This is the beneficiaries’ net adjusted income as defined by the Canada Revenue Agency which takes into account any credits and deductions received.

Beneficiary: the person eligible for the Disability Tax Credit/the person who owns the RDSP.

Canada Disability Savings Bond: The Canada Disability Savings Bond is a federal government contribution to the RDSP of up to $1,000 a year to a maximum of $20,000.

Canada Disability Savings Grant: The federal government contribution that is received when the beneficiary or others make contributions to an RDSP.

Compounded Income: Money invested accumulates interest which then continues to grow as more interested is accumulated.

Contributors: Parents, grandparents, other family, friends, associations, charities, foundations. Anyone authorized by the holder to contribute into the RDSP.

Disability Tax Credit (Form T2201) A non-refundable tax credit used to reduce the income tax the beneficiary pays on their tax return. It can be claimed by anyone with a “severe and prolonged” disability and transferred to unpaid caregivers.

Exempt asset: A liquid asset that will not impact the determination of eligibility for government benefits.

Guaranteed Income Supplement: A benefit that provides additional money for seniors with a low-income who are also receiving the Old Age Security Benefit.

Grant: This is matching federal money that can be received if the beneficiary, family or friends contribute into the RDSP.

Holder of the RDSP: A person who is legally authorized to manage and make decisions regarding an RDSP. In some cases the holder and beneficiary will be the same person, while in other cases, the beneficiary and holder will be different people.

Income Tax Form T2201: Application form for the Disability Tax Credit.

Old Age Security Program: This program provides income for seniors over the age of 65 who have lived in Canada for over 10 years.

Payments: Money withdrawn from RDSPs is called payments.

Private Contributions: This is any money that is contributed into an RDSP by the individual, family or friends.

Tax-free growth: The growth of money invested in a registered savings plan that will not be taxed. The new Tax Free Savings Plan is the best example. RDSPs do not have tax free growth.

Tax-deferred growth: The growth of money in a registered savings plan that will not be taxed until it leaves the plan. The growth is subject to tax when it is taken out of the plan. RDSPs are like this.