For quicker reference, here are the improvements to the RDSP from this year’s Federal Budget
1.) Expansion of the definition of who may be an adult beneficiary’s plan holder to include the beneficiary’s spouse, common-law partner, or parent. This is a temporarily measure, starting June 29, 2012 and going until 2016, however any plan already opened by a family member before 2016 continues as is.
2.) Investment income earned in an RESP will be allowed to be transferred on a tax-free basis to an RESP beneficiary’s RDSP. This measure will apply to rollovers of RESP investment income made after 2013.
3.) Replacing the RDSP 10-Year Rule with a new Proportional Repayment Rule. Instead of ALL grant and bond money being paid back if ANY withdrawal took place for the 10-year period after a government contribution—now, within that same 10 years, for each $1 taken from an RDSP, only $3 of any grants or bonds paid into the plan would need to be repaid, up to a maximum of the assistance holdback amount.
4.) An increase in the annual maximum RDSP withdrawal limit to being up to 10% of plan savings, as determined by the value of the plan at the beginning of that given year.
5.) Extending the period that an RDSP may remain open after the beneficiary ceases to qualify for the Disability Tax Credit, to 4 years in length with certification from a medical practitioner.
- For more information on these changes, see Budget 2012 by the Federal Government, or RDSP Improvements Announced by the RDSP Resource Centre