Contributions to an RDSP are not tax-deductible, but they grow tax-free until withdrawn from the plan. Contributions are not taxable, but income growth, bonds and grants are taxable in the hands of the RDSP beneficiary.
One of the benefits of opening an RDSP is matching grants from the Canadian government. It will pay matching Canada Disability Savings Grants (CDSGs) to a maximum of $3,500 a year and $70,000 in a lifetime, depending on the beneficiary’s adjusted family net income and the amount contributed. For low-income beneficiaries, the government will also pay Canada Disability Savings Bonds (CDSB), up to $20,000.
Learn more about RDSPs and how to open a plan. PLAN Institute, a non-profit organization in Vancouver, offers a free support program to help Canadians access RDSPs.
Example: “While many families start an RDSP for a child with a disability, Rohan started one for himself once he reached the age of majority in his province.”
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