The Registered Disability Savings Plan - MoneySense

The Registered Disability Savings Plan

Have a child who is disabled? Wondering how to shelter some money so your child has a stash of cash available later? The RDSP lets you grow money – tax-free – until it is needed.

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There’s a $200,000 lifetime contribution limit but no annual limits and anyone can contribute to the plan. There are also no restrictions on when or how the funds are used. To sweeten the deal, the government offers a Disability Savings Grant. If your annual net income is less than $75,769 you can get:

  • $3 for every $1 contributed on the first $500
  • $2 for every $1 contributed on the next $1,000.

If your net income is over $75,769, the grant is $1 for every $1 contributed up to $1000.

There is also a Disability Savings Bond, which provides low-income (under $21,287) families with $1,000 per year without any contributions required, so that’s 100% free money for low-income families.

Note that for individuals under 18, family income would be the combined income of the parents. However, for a person over 18, family income would be the individual’s income (plus their spouse’s income if they are married) even if they live with their parents.

To be eligible for the RDSP, the plan holder must:

  • be eligible for the disability tax credit
  • have a social insurance number
  • have filed a tax return
  • be under 50 years of age.

If you need more information, go to www.rdsp.com or www.plan.ca.