The Registered Disability Savings Plan (RDSP) is a savings program from Human Resources and Development Canada to enhance the long term financial security of people with disabilities, and provide “peace of mind” to parents and other contributions, that their loved ones will be provided for in their later years.
Beneficiaries of a plan must have a Social Insurance Number and obtain a Disability Tax Credit Certificate (form T2201 from the Canada Revenue Agency) signed by their physician before applying to open an RDSP.
The biggest benefit of an RDSP plan is the Government Bond. Even if you make no contributions to your plan, the government will pay up to $1,000 per year for a maximum of 20 years, depending on the income level of the contributor.
Another benefit of an RDSP is that all withdrawals, while taxable, do not contribute towards the ODSP calculation of assets rule of $5,000. Nor does it impact a family’s net income calculation for any government tax credits, such as HST Credit.
To find out more information about opening an RDSP, please contact HRDC directly at 1-800-622-6232. Or visit the HRDC website at www.disabilitysavings.gc.ca
Another great resource is from PLAN. Please refer to their website www.rdsp.com for more information, including a tutorial, step-by-step guide and a tool to calculate the amount of grants and bonds available to people.