The Registered Disability Savings Plan (RDSP) was launched in December 2008 after a decade of community groups and government working together. The combination of individual/ family and government financial contributions helps people with disabilities to grow, manage and control a financial asset. The Canada Disability Savings Bond contributes towards low-income Canadian’s RDSP’s. Since 2008, people with disabilities have been able to start building stronger financial futures: they’ve opened 43,000 RDSP accounts and invested more than $200 million in RDSP’s across Canada. At the time of launch, there was a commitment to review the RDSP in 3 years – to look at what is working and what changes may be needed. The 3-year review is approaching and PLAN would like to hear your thoughts and feedback regarding this important program. Our intention is to listen, distill and take forward the experiences of individuals, families and communities to government decision makers.
The rule: contractual competency
Financial institutions need to ensure that people opening an RDSP are able to manage their financial affairs. If they don’t think a person can, they may question his/her ability to be “contractually competent” and therefore question his/her ability to be the RDSP Holder. The role of the Holder is to open, manage, and make decisions about the RDSP investments and payment options. If the financial institution doesn’t’ think the person is able to be the Holder, they request that the person have a legal representative to be the Holder and manage the RDSP on their behalf.
Policy in a Box
- RDSP Holder must be an adult and have ‘contractual competency’
- The responsibility of determining ‘contractual competency’ is often left to the discretion of the bank teller
- An adult that does not have contractual competence, will need an adult guardian
- Adult guardians have different legal names in each province, such as a tutor, trustee, curator or committee
- Adult guardianship in all its various forms removes decision-making abilities from an individual
- NOTE: In BC, a person can have legal representation through a “Representation Agreement”
Why it matters:
Out of the approximately 500,000 people with disabilities in Canada who are eligible for the RDSP, an estimated 80,000 – 100,000 of them are currently deterred from opening up one because of the challenges that adult guardianship and contractual competency presents. The issue of representation is a HUGE ripple affect of the RDSP and we think that it’s possible to find a simple solution that would make the RDSP more accessible to these people.
Currently, guardianship is a province issue; each province has it’s own legal mechanism of ‘representation’ when people are deemed to be not contractually competent. The RDSP is a federal instrument so in order for everyone across Canada to access it, a federal solution to contractual competency makes the most sense. We do not think someone should lose decision-making rights just to open a bank account. By finding a federal solution, there could be a great opportunity for individuals, their families and trusted relationships to be permitted to find solutions, self organize and self monitor their RDSP’s.
So, what do you think?
We’d like to hear your experience and thoughts about contractual competency and the RDSP, along with your ideas for solutions.