The RDSP program was introduced by the Government of Canada in 2008 to help Canadians with disabilities save for the future. The program is good for people with intellectual disabilities, it’s good for their families, and it’s good for Canadian companies. I think that many of our member families can benefit from this program. Here’s why. One of the main issues facing people with disabilities is poverty. The RDSP addresses the poverty issue by putting money directly in the bank accounts of people with disabilities and their families. The RDSP is a good tool for people with disabilities to invest for their future. It’s like planting an apple tree and harvesting apples. We plant the apple tree today. We don’t get apples right away, but if we plant our tree on fertile soil and look after it, we can start harvesting apples in a few years.
Having your own investment fund is good for a number of reasons. A savings plan like an RDSP can build a sense of dignity for the person with a disability and their family because they have control over the money. They control how it is invested, and they control how it is spent. It is empowering to have money in the bank! People can have hope and hope is food for the soul!
Setting up an RDSP is generally easy. Most of Canada’s major Banks are organized to set up & maintain RDSP’s for Canadians with disabilities. People with low to modest incomes can participate. If your income is less than $24,183 you do not even have to put a single dollar of your own money into the plan in order to get started. The money invested in an RDSP is generally exempt from claw back from other Federal & Provincial government benefits. Where does the money come from? The Government of Canada puts the money in for you. Persons with disabilities and their families can also contribute if they are able. For example a low income family with a 10-year old Downs Syndrome child is eligible to create an RDSP for their child and can receive a $1,000 contribution (called a Canada Disability Savings Bond) every year for the next 17 years.
Where does the money go and how does it work to make more money for the downs syndrome child? The family invests the money in a Mutual fund of their choosing… like planting an apple tree. Low risk investors may choose a bond fund so the interest on the bonds gets added to the investment tax free. A higher risk investor may invest in a Mutual fund where the money is invested in shares of Canadian companies that pay dividends from their profits. The dividends then go into the RDSP tax free. The end result is Corporate Canada is helping people with disabilities, and people with disabilities get money with dignity. It’s the same idea as planting an apple orchard. You plant the trees & after a while you harvest apples.
This Registered Disability Savings Plans (RDSP) view point article from the Canadian Association for Community Living was written by: Frank Driscoll, of the PEIACL.