The RDSP is a tax-deferred savings vehicle introduced by the Government of Canada to help parents and others save for the long-term financial security of a person with a severe disability. People with disabilities and their loved ones face a distinct set of financial challenges throughout their lives. To help address these challenges, in 2008 the Government of Canada introduced the Registered Disability Savings Plan (RDSP). Designed to help build long-term financial security for disabled persons, the RDSP makes it easier to accumulate funds by providing assisted savings and tax-deferred investment growth.
To assist in saving, the federal government offers Canada Disability Savings Grants (CDSGs) and Canada Disability Savings Bonds (CDSBs). CDSGs are matching grants that the Government will deposit into a beneficiary’s RDSP to help accumulate savings. The Government provides matching grants of up to 300%, depending on the amount contributed and family net income. In addition to CDSGs, lower income families have access to Canada Disability Savings Bonds (CDSBs). Lower income families may qualify for up to a lifetime maximum of $20,000 from the Canada Disability Savings Bond (CDSB) program.
When withdrawing funds from an RDSP, it is important to be aware of the 10-year rule. CDSGs and CDSBs received in the 10-year period prior to a disability assistance payment must be repaid to the government. This repayment is known as the Assistance Holdback Amount. The purpose of the Assistance Holdback Amount is to ensure that RDSPs are used for long-term savings, and also to ensure that government funds contributed are not withdrawn and used as leverage for matching grants in future years.
To find out if you or a family member qualifies for the RDSP, please contact us or visit this Service Canada link:http://www.servicecanada.gc.ca/eng/goc/rdsp.shtml