It is not uncommon for individuals to lose DTC eligibility for a period of time. Many people are only approved for the DTC for a certain number of years. The CRA periodically checks to see if your restrictions have changed and may ask you for additional information. Unfortunately, this can be the case for even those with permanent conditions. There are a few steps and considerations to take into account when considering what to do next.

 It is important to note that DTC approval is in place for an entire calendar year (January 1 to December 31). For example, if you are eligible from 2015 – 2020, this will mean you are eligible from January 1, 2015 to December 31, 2020.


Reapply for the DTC

The first step to consider is reapplying for the DTC. Remember to regularly check the status of your DTC eligibility for the latest updates. You can view whether you have been approved for the DTC on the CRA’s My Account page. My Account is a secure portal that lets you view your personal income tax and benefit information and manage your tax affairs online. You may need to register for this service if you have not done so already.

Representatives (including friends and family members) can access My Account on behalf of someone else using Represent a Client.

Alternatively, you can contact the CRA on any questions you have on the DTC including your application status:

  • From Canada / the United States: 1-800-959-8281 
  • From anywhere else: 613-940-8495. 
  • If you use a teletypewriter, call 1‑800-665-0354 during regular hours of service.

In order to maintain DTC eligibility, you must re-apply with the CRA before your credit expires. Applications can take a few months to process so you should engage in the renewal process at least six months before your DTC is set to expire. You are allowed to reapply for the DTC up to one year before the expiry date.

Provided you have regained eligibility by the time you file your taxes for a particular year, you will still be able to file your taxes and claim the disability amount for that year.

For guidance on how to complete the application, visit here. You can also refer to guidance produced by Disability Alliance BC including their DTC help sheets.

What happens to my RDSP?

Before the announcement of Budget 2019, your RDSP account would have to be closed within two years, no later than December 31 of the calendar year following the first full calendar year that you were no longer eligible for the DTC. To extend the 2-year period, your medical practitioner would have to send a letter to your financial institution requesting more time for you to regain eligibility, up to a maximum of five years.

As of March 18, 2019, if you lose DTC status, you will not be asked to close your RDSP. This rule is part of several changes proposed in the 2019 Federal Budget which are coming into force as of January 1st 2021.Whilst we wait for these changes to be officially legislated, a transitional rule has been implemented which includes the change in rules regarding RDSP closures. For more information on this transition rule, please refer to the government notice here. Your RDSP will therefore remain open but will be subject to certain restrictions.

During the period of DTC-ineligibility, the following rules apply:

  • No contributions or education savings rollovers to the RDSP will be permitted; however, a retirement savings rollover is permitted in specific circumstances (see here).
  • No new Canada Disability Savings Grant (grant) or Canada Disability Savings Bond (bond) will be paid into the RDSP; however, if there is an outstanding request when the beneficiary was DTC-eligible, the grant or bond will be paid even if the payment is made during this period.
  • No new entitlements will be generated for the purpose of the carry-forward of grants and bonds for years for which the beneficiary is DTC-ineligible.
  • Withdrawals from the RDSP are permitted but are subject to the Assistance Holdback Amount (AHA). See below for more information.  
  • The plan can also be closed by the holder. This is optional and not required given the new rules. If the plan is closed, all personal contributions and investment earnings will be paid to the beneficiary. All grants and bonds paid into the account in the last 10 years will be returned to the government.


 How do withdrawals work if I lose DTC eligibility?

Under current rules, if a beneficiary loses their DTC eligibility and makes a withdrawal they may have to repay a proportion of the government grants and bonds paid into the RDSP in the last 10 years. The age of the beneficiary at the time of the withdrawal will affect the amount that is needed to be paid back:

  • For beneficiaries who make a withdrawal at age 49 or younger, the beneficiary would have to pay back the lesser of:
    • 3x the amount withdrawn (in grants and bonds)
    • or all the grants and bonds received from the government in the 10 years leading up to the date in which they were DTC-ineligible (10-year repayment rule).
  • For beneficiaries who make a withdrawal aged between 50-60, the above rules apply, except that the 10-year repayment rule reduces by one year every year going forwards. At age 51, it becomes 9 years; at 52, it becomes 8 years etc. The date for calculating the 10 year rule would also begin on January 1 of the year that is 10 years before the year of DTC loss.
  • For beneficiaries aged 60 and older, there is no repayment rule on funds withdrawn and therefore no requirement to pay back government grants and bonds.

Note that in all cases, the maximum amount that can be withdrawn from an RDSP will still depend on the amount of personal contributions made versus government contributions. Please refer to guidance on withdrawals here. 


As of January 1, 2022, Tom is 47 years old and has been a beneficiary of an RDSP account since 2008. Tom has received the maximum annual Canada Disability Savings Grant amount of $3,500 every year since 2008. Due to a new treatment, Tom’s disability was cured and consequently, he lost his DTC eligibility for 2022 onwards. Under the new proposed rules, the RDSP account can remain open, but no further contributions are permitted. 

Scenario 1:

Tom decides to make a withdrawal of $8000 in the year he turns 48. He currently has $35,000 in grants and bonds he received in the 10 years before he lost DTC eligibility ($3500 x 10). Tom would need to repay $24,000 (3×8000) in government contributions.

Scenario 2:

Tom decides to make a withdrawal of $8000 at age 55. Since turning 51, the 10-year rule has been reducing by a year each year. He currently has $17,500 in grants and bonds he received in the past 5 years before he lost DTC eligibility (5 x 3500). His withdrawal of $8000 requires him to repay the maximum of the remaining AHA – $17,500 (5 x 3500) in government contributions.


For more information on withdrawals, the 10-year repayment rule and the Assistance Holdback Amount, visit here.


What happens to my RDSP if I’m over 60?

If you are over 60 and lose DTC eligibility, you will continue to receive payments from your RDSP via LDAP payments. Once you turn 60, all of the money in your RDSP has vested and belongs to the beneficiary. It is not possible to stop LDAP payments.


Regaining DTC Status

If you regain DTC eligibility then the RDSP will become an active account again and contributions can resume. If you regain DTC eligibility for the years your RDSP was inactive, you can retroactively receive grants and bonds that you missed during that time. You will receive a new “Annual Statement of Grant Entitlement” from Employment and Social Development Canada in the first few months of the following year that explains what you will need to deposit into the RDSP to receive the maximum amount of government grants. Any missed bond amounts will automatically be deposited into the account.


Who should I contact?

You can contact the CRA on any questions you have on the DTC including your application status:

From Canada / the United State: 1-800-959-8281

From anywhere else: 613-940-8495.

If you use a teletypewriter, call 1‑800-665-0354 during regular hours of service.


You can also call our Disability Planning Helpline on 1-844-311-7526. We can answer your questions about the Disability Tax Credit, the Registered Disability Savings Plan, trusts & estate planning, advocacy approaches, government benefit programs, social network building and more.