|  Français Advanced Search | Text size: + - R 

About the AMF Register Media Centre A Career at the AMF Contact us
RSS Feeds Follow l'Autorité on Twitter Follow l'Autorité on Facebook Follow l'Autorité on LinkedIn
Follow us
  •  | Print

RDSP (Registered Disability Savings Plan)

What is an RDSP?

The RDSP is a savings vehicle designed to ensure the long-term financial security of a person with disabilities*. It can be used for the person with disabilities or for another beneficiary, such as a child or a spouse.

Several types of contributions can be made to an RDSP: cash, shares, bonds and mutual funds.

The RDSP beneficiary can use the funds in the plan prior to the age of retirement to meet his financial needs; for example, to pay for healthcare costs or home help.

Who can become a beneficiary of an RDSP?

An individual can be designated as beneficiary if he:

  • is eligible for the disability amount under the Income Tax Act (Canada);
  • has a valid social insurance number (SIN);
  • resides in Canada when the plan is entered into;
  • is under the age of 60 (The age limit does not apply when a beneficiary’s RDSP is opened as a result of a transfer from the beneficiary’s former RDSP).

Who can contribute to an RDSP?

The holder** of the RDSP, or anyone who has written permission from the plan holder, can contribute to the RDSP. Contributions made to the plan belong to the beneficiary, even if he is not the one who contributed to the plan. Therefore, if you contribute to another person’s RDSP, you are making a gift to that person.

Therefore, a person with disabilities who opens an RDSP for himself will be both the beneficiary and the plan holder.

If the beneficiary reaches age 18 and is legally able to enter into a contract, he must become the RDSP holder. If however a beneficiary has reached the age of majority but is not legally able to enter into a contract, his parents can remain holders of the plan.

Government assistance

RDSPs are eligible to receive two types of government assistance: the Canada Disability Savings Grant (“CDSG”) and the Canada Disability Savings Bond (“CDSB”).

The CDSG can be as much as 300% of the amount contributed, depending on the amount and the beneficiary’s family income***. The maximum matching grant is $3,500 per year. The lifetime bond limit is $70,000.

The CDSB is offered solely to low-income and modest-income*** Canadians. The maximum matching bond is $1,000 per year, with a lifetime maximum of $20,000. No contribution is required to receive this bond. You simply need to open an RDSP.

Government disability plan grants and bonds are paid until the year in which the beneficiary turns 49. They are intended to encourage long-term savings. The amounts invested in the RDSP must therefore stay in the plan for at least 10 years. If funds are withdrawn, the matching grants and bonds must be paid back to the Government. Note that a beneficiary may be eligible to receive one or both types of assistance.

How does an RDSP work?

There is no annual RDSP contribution limit, but the maximum contribution that can be made over the beneficiary’s lifetime is $200,000.

RDSP contributions are not tax-deductible. However, amounts invested in the plan grow tax-free for as long as they remain in the plan.

You can contribute to an RDSP until the end of the year in which the beneficiary turns 59. Contributions withdrawn from the plan are not included in the beneficiary’s income. However, the CDSG, the CDSB and any investment income accrued in the plan are included in the beneficiary’s income when withdrawals are made. Consequently, the beneficiary will be taxed on these amounts when he withdraws them from the plan.

Amounts withdrawn from an RDSP do not affect the amounts receivable under other government programs, such as the Old Age Security, Guaranteed Income Supplement and Québec Pension Plan.

Example

A couple has a child with disabilities. The couple’s annual income is $80,000. The parents invest an initial $1,500 in their child’s RDSP as soon as he is one year old. Each year, they invest the same amount until their child is 20 years old. In total, they will have invested $30,000. The parents will not be entitled to the CDSB, but their child can likely access it as of 19 years of age if his income is low. Therefore, he will be eligible for the CDSB when he turns 19. He will receive the lifetime grant limit of $70,000 and the lifetime bond limit of $20,000. Assuming the plan has an annual return of 3%, he will have $364,418 in his RDSP because of the grants and bonds paid into the plan.

Accumulation of contributions in an RDSP

 
 
 
 
Amount accumulated based on an annual return of...
Age
Contributions
Grants
Bonds
2%
3%
4%
1 year
$1 500
$3 500
$0
$5 100
$5 150
$5 200
2 years
$1 500
$3 500
$0
$10 302
$10 455
$10 608
3 years
$1 500
$3 500
$0
$15 608
$15 918
$16 232
4 years
$1 500
$3 500
$0
$21 020
$21 546
$22 082
5 years
$1 500
$3 500
$0
$26 541
$27 342
$28 165
6 years
$1 500
$3 500
$0
$32 171
$33 312
$34 491
7 years
$1 500
$3 500
$0
$37 915
$39 462
$41 071
8 years
$1 500
$3 500
$0
$43 773
$45 796
$47 914
9 years
$1 500
$3 500
$0
$49 749
$52 319
$55 031
10 years
$1 500
$3 500
$0
$55 844
$59 039
$62 432
11 years
$1 500
$3 500
$0
$62 060
$65 960
$70 129
12 years
$1 500
$3 500
$0
$68 402
$73 089
$78 134
13 years
$1 500
$3 500
$0
$74 870
$80 432
$86 460
14 years
$1 500
$3 500
$0
$81 467
$87 995
$95 118
15 years
$1 500
$3 500
$0
$88 196
$95 784
$104 123
16 years
$1 500
$3 500
$0
$95 060
$103 808
$113 488
17 years
$1 500
$3 500
$0
$102 062
$112 072
$123 227
18 years
$1 500
$3 500
$0
$109 203
$120 584
$133 356
19 years
$1 500
$3 500
$1 000
$117 507
$130 382
$144 930
20 years
$1 500
$3 500
$1 000
$125 977
$140 473
$156 968
21 years
 
 
$1 000
$129 517
$145 718
$164 286
22 years
 
 
$1 000
$133 127
$151 119
$171 898
23 years
 
 
$1 000
$136 809
$156 683
$179 814
24 years
 
 
$1 000
$140 566
$162 413
$188 046
25 years
 
 
$1 000
$144 397
$168 315
$196 608
26 years
 
 
$1 000
$148 305
$174 395
$205 512
27 years
 
 
$1 000
$152 291
$180 657
$214 773
28 years
 
 
$1 000
$156 357
$187 107
$224 404
29 years
 
 
$1 000
$160 504
$193 750
$234 420
30 years
 
 
$1 000
$164 734
$200 592
$244 837
31 years
 
 
$1 000
$169 049
$207 640
$255 670
32 years
 
 
$1 000
$173 450
$214 899
$266 937
33 years
 
 
$1 000
$177 939
$222 376
$278 655
34 years
 
 
$1 000
$182 517
$230 077
$290 841
35 years
 
 
$1 000
$187 188
$238 010
$303 514
36 years
 
 
$1 000
$191 951
$246 180
$316 695
37 years
 
 
$1 000
$196 811
$254 595
$330 403
38 years
 
 
$1 000
$201 767
$263 263
$344 659
39 years
 
 
 
$205 802
$271 161
$358 445
40 years
 
 
 
$209 918
$279 296
$372 783
41 years
 
 
 
$214 116
$287 675
$387 694
42 years
 
 
 
$218 399
$296 305
$403 202
43 years
 
 
 
$222 767
$305 194
$419 330
44 years
 
 
 
$227 222
$314 350
$436 103
45 years
 
 
 
$231 767
$323 781
$453 547
46 years
 
 
 
$236 402
$333 494
$471 689
47 years
 
 
 
$241 130
$343 499
$490 557
48 years
 
 
 
$245 953
$353 804
$510 179
49 years
 
 
 
$250 872
$364 418
$530 586

Total

$30 000

$70 000

 $20 000

$250 872

$364 418

$530 586

What happens should the beneficiary die?

On the death of the beneficiary, the total amount of grants and bonds received in the preceding ten years must be returned to the Government. The remaining plan proceeds pass to the beneficiary’s estate, namely:

  • all investment income, including income generated by all grants and bonds received.
  • grants and bonds received more than 10 years prior to the beneficiary’s death.
  • all contributions by the plan holder.

Who offers RDSPs?

Consult the following list for the financial organizations that offer RDSPs.

Speak with an authorized representative to help you make the right investment choices. To ensure that you are dealing with an authorized representative, consult the register of firms and individuals authorized to practise, or call the AMF Information Centre.

The information on this page is a summary of RDSPs. The following sources provide more details on these plans:

 


* For purposes of the RDSP, a “person with disabilities” means a person who is eligible for the disability tax credit.

** The plan holder can be:

  • the person who opened the RDSP,
  • or the beneficiary, provided that he is at least 18 years of age and is legally able to enter into the contract.

*** From birth to December 31 of the year the beneficiary turns 18, the beneficiary’s family income is based on his parents’ income. After that, family income is the income of the beneficiary and his spouse.