Assistance Holdback Amount (AHA) and Repayment Obligation

Disclaimer: RDSP issuers

The information contained on this page is technical in nature and is intended for Registered Disability Savings Plan (RDSP), Canada Disability Savings Grant (grant) and Canada Disability Savings Bond (bond) issuers. For general information, visit the RDSP section.

Official title: Technical and System Development Guide for RDSP Providers | Assistance Holdback Amount (AHA) and Repayment Obligation

Financial Institutions (FIs) are responsible for identifying situations that require the repayment of incentives and for calculating the repayment obligation to be returned to the Government of Canada where required. Incentives must be repaid using electronic transactions submitted to the Canada Disability Savings Program (CDSP) system. This document is intended to guide FIs in the calculation of repayment obligations and the submission of system transactions in this regard by elaborating on the rules guiding the identification of an Assistance Holdback Amount (AHA) event and period and the repayment amount of Canada Disability Savings Grant (grant) and Canada Disability Savings Bond (bond).

This document is to be used in conjunction with the RDSP Provider User Guide, Chapter 3-6 (Repaying the Grant and Bond).

1. Overview

The Canada Disability Savings Regulations outline the issuer’s obligation to repay the Canada Disability Savings Grant (grant) and Canada Disability Savings Bond (bond) to the Government of Canada.

Additional rules impacting the Assistance Holdback Amount (AHA) and the calculation of repayment obligations were introduced to align with the requirements of the Proportional Repayment Rule on withdrawals from a Registered Disability Savings Plan (RDSP) and the Disability Tax Credit (DTC) elections, both applicable as of January 2014.

1.1 Approach

Repayment obligations, as well as AHA periods, vary in relation to the type of event for which a repayment must be made (refer to section 2.1 for a list of events), as well as the DTC eligibility status at the time the event occurs. Section 2 explains the repayment rules and the related trigger events. Sections 3 through 7 contain a series of steps to enable issuers to meet their repayment obligations, consisting of:

  1. determining the AHA period;
  2. identifying grant and bond paid within the AHA period;
  3. attributing amounts repaid to the grant and bond paid in the applicable AHA period;
  4. calculating the AHA; and
  5. calculating the repayment obligation.

2. Repayment rules, trigger events and AHA

This section outlines the rules to determine the various events that require repayment of grant and bond.

2.1 Repayment rules and trigger events

The repayment rules require all or a portion of the grant and bond paid into an RDSP to be repaid. The repayment is triggered by the occurrence of the following DTC, or non-DTC, related events:

  1. a withdrawal from an RDSP (non-DTC event);
  2. an RDSP is deregistered (non-DTC event);
  3. an RDSP is closed for a reason other than a transfer (non-DTC event);
  4. a beneficiary dies (non-DTC event);
  5. a beneficiary is not eligible for the DTC for two full consecutive years after the year of contract signature date and no DTC “election” is made (DTC event) Footnote 1 ; or
  6. where a DTC “election” has been made, the beneficiary is not DTC eligible for five full consecutive years after the year of contract signature date (DTC event) Footnote 2 .

2.2 Assistance holdback amount

In order to meet the requirements of the repayment rule, financial institutions must set aside an amount equivalent to the total of grant and bond paid into an RDSP within a period (normally ten years) before a particular date, less any amount of grant and bond paid into the RDSP during that period that was repaid to the Government of Canada.

2.3 AHA and proportional repayment

The full AHA must be repaid when any of the events listed under section 2.1 occur, with the exception of withdrawals (section 2.1 (i)) dated after December 31, 2013, which are subject to the Proportional Repayment Rule ($3 to be repaid for each $1 withdrawn up to a maximum of the AHA amount). For additional information on the Proportional Repayment Rule, refer to chapter 3-6 of the RDSP user guide.

3. Determining the AHA period

Establishing the AHA start and end dates for a trigger event are fundamental to determining the AHA and the amount to be repaid. These dates are dependent on both the type of event for which the AHA is being calculated and the beneficiary's DTC status prior to and during the event.

3.1 Type of date

Definitions – type of date

AHA start date
The start of the period for which grant and bond payments and repayments must be calculated for events listed in 2.1.
AHA end date
The end of the period for which grant and bond payments and repayments must be calculated for events listed in 2.1.
Contract signature date
The date the contract was signed with the issuer.
Current date
The present calendar date. It corresponds to the AHA End Date for any of the events listed in 2.1, with the exception of withdrawals. This is since all payments made after RDSP deregistration, termination, death of beneficiary, loss of DTC for 2 full consecutive years without an election or loss of DTC for 5 full consecutive years with an election must be repaid to the Government of Canada.
Disability Assistance Payment (DAP) date
The date on which the DAP was conducted with the issuer as reported to the Government of Canada.
Lifetime Disability Assistance Payment (LDAP) date
The date on which the LDAP was conducted with the issuer as reported to the Government of Canada.
Event date
  • DAP date where the event is a DAP
  • LDAP date where the event is an LDAP
  • Deregistration date reported by the Canada Revenue Agency (CRA), where the event is contract deregistration
  • Date the contract was closed with the issuer, where the event is contract termination
  • Date of death, as reported by the Social Insurance Registry (SIR), where the event is death of beneficiary
  • January 1 of the first year of the consecutive years of DTC ineligibility, where the event is loss of DTC
Payment date
Date found in position 58-65 of the 901 Transaction Processing File corresponding to the date that the grant and/or bond was paid.
Repayment date
Date reported by the issuer in position 67-74 of the 401-10 repayment of grant and/or bond transaction.

3.1.1 AHA End Date

The AHA period end date for events identified in section 2.1 is defined as the current date in all situations except withdrawals where the end date is the date of the withdrawal.

Note: In order to reflect system processing logic, the current date is used as the AHA period end date in many of the examples as information (relating to repayments, contract closures, etc.) may not always be reported or received in a timely fashion. The use of current date ensures that any grant and/or bond paid after an event are considered for the purpose of calculating the repayment obligation. For further information, please refer to chapter 3-6 of the RDSP user guide.

3.1.2 AHA start date

This section explains the AHA start date and provides examples of how to determine the date for different or multiple events.

Determining the AHA start date

Event: Withdrawal from an RDSP
  • Event date: DAP/LDAP date
  • Event source: Reported by the issuer
  • AHA Start Date: Ten years prior to the event date
Event: RDSP is deregistered
  • Event date: Deregistration date reported by the CRA
  • Event source: RPD
  • AHA Start Date: Ten years prior to the event date
Event: RDSP is closed for a reason other than transfer
  • Event date: Date the contract was closed with the issuer
  • Event source: Issuer
  • AHA Start Date: Ten years prior to the event date
Event: Beneficiary dies
  • Event date: Date of death, as reported by SIR
  • Event source: SIR
  • AHA Start Date: Ten years prior to the event date
Event: Beneficiary is not eligible for the DTC for two full consecutive years after the year of contract signature date and no DTC election is made (DTC event)
  • Event date: January 1 of the first year of the consecutive years of DTC ineligibility
  • Event source: DTC information is received from the CRA BPD
  • AHA Start Date: Ten years prior to the event date
Event: A DTC election has been made and the beneficiary is not DTC eligible for five full consecutive years
  • Event date: January 1 of the first year of the consecutive years of DTC ineligibility
  • Event source: DTC information is received from the CRA BPD
  • AHA Start Date: Ten years prior to the event date

3.2 Event occurring during a time of DTC eligibility

When an event occurs during a time of DTC eligibility, the AHA period start date for the event is set to ten years prior to and including the event date. Depending on the type of event, the event date will be one of the following:

  • “DAP Date” or “LDAP Date” reported by the issuer;
  • de-registration date reported by CRA;
  • contract closure date reported by the issuer; or
  • date of beneficiary death reported by SIR.

Example: Withdrawal during a time of DTC eligibility

An RDSP is opened in 2010 and receives grant and bond until 2020. In 2021, the beneficiary is still DTC eligible but no grant or bond is paid in that year. A withdrawal from the plan is made on July 5, 2021.

The AHA period is ten years prior to the withdrawal, i.e. from July 6, 2011, to July 5, 2021.

Figure 1: Withdrawal during a time of DTC eligibility
Text description immediately follows the figure 1

Example: Contract termination during a year of DTC eligibility

An RDSP is opened in 2010 and receives grant and bond until 2020. In 2021, the beneficiary is still DTC eligible but no grant or bond is paid in that year. The plan is closed (or is deregistered or the beneficiary dies) on July 5, 2021.

The AHA period starts ten years prior to the event date, i.e. July 6, 2011 and the end date is the current date.

Example: Withdrawal following a DTC election period

An RDSP is opened in 2010 and receives grant and bond until 2020. During the timeframe of 2021 to 2024, the beneficiary is DTC ineligible; however, an election is made to keep the plan open.

In 2025 the beneficiary becomes DTC eligible once again and a withdrawal from the plan is made on July 5, 2025. The election for the period of DTC-ineligibility allows the RDSP to remain open. However, once DTC eligibility was re-established within the five-year period, the prior loss of DTC eligibility is no longer relevant. The AHA period would be based solely on the withdrawal event date and the AHA period is from July 6, 2015 to July 5, 2025.

3.3 First DTC event

If there is a DTC event, the AHA period start date is set to January 1 of the tenth year preceding the first year the beneficiary became DTC-ineligible.

Example: DTC event created by loss of DTC for two full years with no election

An RDSP is opened in 2010. In 2021 and 2022 the beneficiary is no longer DTC eligible and no election is made to keep the plan open. This creates a “DTC event” (the beneficiary is DTC ineligible for two full consecutive years and no DTC election is made).

The AHA period for the loss of DTC event is from January 1, 2011, to the current date.

Figure 2: DTC event created by loss of DTC for two full years with no election
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Example: DTC event created by loss of DTC for five full years

An RDSP is opened in 2010. From 2021 to 2025 the beneficiary is DTC ineligible but submits an election to keep the plan open in 2021. This creates a “DTC event” on January 1, 2026, as the beneficiary is DTC ineligible for five full consecutive years regardless of the election.

The AHA period for the loss of DTC event is from January 1, 2011, to the current date.

3.4 Event following a DTC event

If there is at least one DTC event any additional event on or after the first DTC event date will have a start date that is equal to the start date of the first DTC event.

Example: Death of beneficiary following two years of DTC ineligibility

An RDSP is opened in 2010. In 2021 and 2022 the beneficiary is DTC ineligible and no election is made to keep the plan open (DTC event). The beneficiary returns to DTC eligibility in 2023 and dies on February 1, 2024.

Since the AHA period for the DTC event is from January 1, 2011, to the current date, the AHA period applicable at the time of the beneficiary’s death is also from January 1, 2011 to the current date.

Figure 3: Death of beneficiary following two years of DTC ineligibility
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3.5 Event occurring during a time of DTC ineligibility with no prior DTC event

When there is no prior DTC event from the contract signature date and an event occurs during a time of DTC ineligibility, the AHA period start date for the event is set to January 1 of the tenth year prior to the year the beneficiary became ineligible for the DTC.

Example: Withdrawal during a single year of DTC ineligibility

An RDSP is opened in 2010 and receives grant and bond until 2020. In 2021, the beneficiary is DTC ineligible and no grant or bond is paid in that year.

A withdrawal is made from the plan on July 5, 2021 and, since the withdrawal occurs during a time of DTC ineligibility (and there is no prior DTC event), the AHA period is from January 1, 2011 to July 5, 2021.

Figure 4: Withdrawal during a single year of DTC ineligibility
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Example: Death of beneficiary during a single year of DTC ineligibility

An RDSP is opened in 2010 and receives grant and bond until 2020. In 2021, the beneficiary is DTC ineligible and no grant or bond is paid in that year. The beneficiary dies (or the plan is closed or deregistered) on July 5, 2021.

Since the event occurs during a time of DTC ineligibility (without a prior DTC event), the AHA period is from January 1, 2011 to the current date.

Figure 5: Death of beneficiary during a single year of DTC ineligibility
Text description immediately follows the image 5

Example: Withdrawal during a DTC election period

An RDSP is opened in 2010 and receives grant and bond until 2020. During the timeframe of 2021 to 2024, the beneficiary is DTC ineligible; however, an election is made to keep the plan open. A withdrawal from the plan is made on July 5, 2024.

Since the withdrawal occurs during a time of DTC ineligibility (without a prior DTC event) the AHA period is from January 1, 2011 to July 5, 2024.

3.6 Contract signature date limitation

The AHA period start date cannot be earlier than the contract signature date (of the earliest contract in a transfer situation) therefore, the AHA period start date for an event is the later of:

  • the start date as determined in section 3.2 to 3.5;
    or
  • the contract signature date.

Example: DTC event created by loss of DTC for two full years with no election, with later contract signature date

An RDSP is opened on February 3, 2020. In 2021 and 2022 the beneficiary is DTC ineligible and no election is made to keep the plan open which creates a “DTC event” (the beneficiary is DTC ineligible for two full consecutive years and no DTC election is made).

The AHA period for the DTC event is from February 3, 2020 to the current date.

Figure 6: DTC event created by loss of DTC for two full years with no election, with later contract signature date
Text description immediately follows the image 6

Example: Withdrawal during a single year of DTC ineligibility, with later contract signature date

An RDSP is opened on February 3, 2015 and receives grant and bond until 2020. In 2021, the beneficiary is DTC ineligible and no grant or bond is paid in that year. A withdrawal from the plan is made on July 5, 2021.

The AHA period is from February 3, 2015, to July 5, 2021.

Example: Withdrawal during a time of DTC eligibility, with later contract signature date

An RDSP is opened on February 3, 2015 and receives grant and bond until 2020. In 2021, the beneficiary is still DTC eligible but no grant or bond is paid in that year. A withdrawal from the plan is made on July 5, 2021.

The AHA period is from February 3, 2015 to July 5, 2021.

3.7 AHA periods overlap

The AHA periods for two distinct events are always determined independently. This can result from either DTC or non-DTC events and could cover all or a portion of the same period of time.

Example: Two events that overlap a period of time

A DAP is made on January 1, 2019, (AHA period is from January 2, 2009 to January 1, 2019). In 2020 and 2021 the beneficiary is DTC ineligible and no election is made to keep the plan open. This creates a “DTC event” (AHA period from January 1, 2010, to the current date) and a January 1, 2010 to January 1, 2019 overlap of the two AHA periods.

Figure 7 : Two events that overlap a period of time
Text description immediately follows the image 7

4. Identifying grant and bond paid within an AHA period

Section 4 highlights the rules used to determine the amount of grant and bond paid within a period.

After determining the start and end dates of the AHA period, the amount of grant and bond that was paid during that period can be calculated. All grant and bond paid with a payment date on or after the start date and on or before the end date must be included.

When a contract is part of a resolved transfer, grant and bond paid to the relinquishing contract are included in the calculation of AHA and repayment obligation for events occurring under the receiving contract.

Example: Grant and bond paid within the AHA period for a withdrawal.

An RDSP is opened in 2010 and receives $17,000 in grant and bond from August 1, 2011until December 31, 2020. In 2021, the beneficiary is still DTC eligible but no grant or bond is paid. A withdrawal from the plan is made on July 5, 2021. The AHA period is from July 6, 2011 to July 5, 2021.

The grant and bond paid within the AHA period is the entire $17,000.

Example: Grant and bond paid within the AHA period for multiple withdrawals.

An RDSP is opened in 2010 and receives $17,000 in grant and bond from August 15, 2011 until February 16, 2020.

Table : Grant and bond paid within the AHA period for multiple withdrawals
Payment Date Grant & Bond Paid
August 15, 2011 $1,000
September 16, 2012 $1,000
October 16, 2013 $1,000
November 15, 2014 $1,000
January 15, 2015 $2,000
March 16, 2016 $2,000
January 17, 2017 $2,000
January 16, 2018 $2,000
February 16, 2019 $2,500
February 16, 2020 $2,500
2021 $0
2022 $0
2023 $0
2024 $0
2025 $0

In 2021 to 2025, the beneficiary is still DTC eligible but no grant or bond is paid. Two withdrawals from the plan are made for $2,000 each on July 5, 2021, and June 20, 2025.

Since the withdrawals occur during a time of DTC eligibility (without a prior DTC event), the applicable overlapping periods and the grant and bond paid within those periods are:

Table: Grant and bond paid within the AHA period for multiple withdrawals
Withdrawal AHA Period Grant and Bond Paid
July 5, 2021 July 6, 2011 – July 5, 2021 $17,000
June 20, 2025 June 21, 2015 – June 20, 2025 Footnote 3 $11,000

5. Attributing of grant and bond repaid

Section 5 highlights the rules used to determine the amount of grant and bond repaid within a period.

5.1 Factors influencing attribution

Similar to the calculation of grant and bond paid, the attribution of grant and bond repaid is dependent on prior events for which a repayment must be made and the AHA period for each event. In addition, repayments are attributed within a period on the basis of:

  • the repayment date;
  • event type (in section 2.1); and
  • sequence of events that occurred under the contract (or contracts in the case of a transfer).

5.2 Attribution

Grant and bond repayments are attributed within AHA periods according to the following set of rules:

  1. calculate the total amount of grant and bond repayments made under the contract (or contracts in a resolved transfer situation);
  2. identify the events under the contract(s) that require grant and bond repayment (section 2.1);
  3. for each event, determine the AHA period (section 3);
  4. for each event, consider the grant and bond paid (section 4);and
  5. attribute the repayments to the grant and bond paid.

Starting from the earliest event and continuing to the later events, determine the event type and:

  • if the event is a withdrawal dated after December 31, 2013, attribute the amounts repaid to the grant and bond paid within the AHA period based on the order in which they were paid, from the earliest date to the latest. The proportional repayment rule is applied and $3 repaid is attributed to the grant and bond paid within the period for each $1 withdrawn;
  • if the event is other than a withdrawal dated after December 31, 2013, attribute the amounts repaid to the grant and bond paid within the AHA period based on the order in which they were paid, from the earliest date to the latest. Repayments are attributed to all grant and bond paid within the period.

Note: The grant and bond paid and repaid may fall within the AHA period of more than one event (i.e. the AHA periods overlap). In this circumstance, the grant and bond paid and repaid are included in the AHA calculation of all overlapping events (refer to section 6); however, the obligation to repay the grant and bond is associated with the earliest of the overlapping events (refer to section 7).

6. Calculating the AHA

This section lays out the rules for the calculation of the AHA applicable to a given event.

6.1 Factors impacting the calculation of the AHA

The following considerations allow the identification of the factors impacting the calculation of AHA:

  • events for which a repayment of grant and bond must be made (section 2.1);
  • AHA period for each event (section 3);
  • grant and bond paid within each AHA period (section 4) and
  • grant and bond which have been repaid (section 5).

Before the AHA for an event can be accurately calculated, two additional rules must be considered.

  1. The first qualifies the provision in section 5.2 (i): when attributing grant and bond repayments within an AHA period, only the total amount of repayments made (based on CDSP system processing date) on or before the end date of the AHA period should be considered.
  2. The grant and bond paid and attributed as repaid in overlapping AHA periods are counted for each individual overlapping AHA period (i.e. if an amount was paid and must be repaid on account of two events whose period overlaps, it is counted in the AHA of both events).

6.2 AHA formula

The equation for a given event is:

AHA = grant paid + bond paid - grant repaid – bond repaid is completed by:

  1. determining the AHA period (as in section 3)
  2. calculating the grant and bond paid (as in section 4)
  3. calculating the amount of grant and bond repaid that is applicable to the AHA period (as in section 5 with the additional clauses in section 6.1).

Example: AHA with no repayment

An RDSP is opened in 2008 and, by January 1, 2014, $4,000 in grant and bond is paid into the account. On January 1, 2014, $1,000 is withdrawn from the RDSP and no repayment is made.

In this case, the AHA as of the date of the withdrawal is $4,000.

Figure 8: AHA with no repayment
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Example: AHA with repayment after event date

An RDSP is opened in 2008 and, by January 1, 2014, $4,000 in grant and bond is paid into the account. On January 1, 2014, $1,000 is withdrawn from the RDSP. The required repayment of $3,000 (proportional repayment rule is applied so that $3 is repaid for each $1 withdrawn) is made on January 1, 2015.

The application of the AHA formula, in light of rule #1 in section 6.1 (only repayments made on or before the end date of the event being considered are part of the AHA for that event), leads to the calculation of the AHA as $4,000.

Figure 9: AHA with repayment after event date
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Example: AHA and overlapping periods – withdrawal/loss of DTC

An RDSP is opened on February 5, 2010 and, by January 1, 2014, $4,000 in grant and bond is paid into the plan. On January 1, 2014, $1,000 is withdrawn from the RDSP. The required repayment of $3,000 is made on January 1, 2015, (and attributed to the grant and bond payments made in 2010 to 2012, from the oldest to the latest). The beneficiary is DTC eligible until 2021 and an additional $1,000 is paid on February 15 of every year between 2014 and 2021.

In 2022 and 2023 the beneficiary is DTC ineligible and no election is made to keep the plan open.

Table: AHA and overlapping periods – withdrawal/loss of DTC
Date Grant and Bond Paid Grant and Bond Repaid DTC Eligibility Event Requiring Repayment of Grant and Bond
March 15, 2010 $1,000 $0 Yes n/a
Feb. 15, 2011 $1,000 $0 Yes n/a
Feb. 15, 2012 $1,000 $0 Yes n/a
Feb. 15, 2013 $1,000 $0 Yes n/a
Jan. 1, 2014 $0 $0 Yes $1,000 withdrawal
Feb. 15, 2014 $1,000 $0 Yes n/a
Jan. 1, 2015 $0 $3,000 Yes n/a
Feb. 15, 2015 $1,000 $0 Yes n/a
Feb. 15, 2016 $1,000 $0 Yes n/a
Feb. 15, 2017 $1,000 $0 Yes n/a
Feb. 15, 2018 $1,000 $0 Yes n/a
Feb. 15, 2019 $1,000 $0 Yes n/a
Feb. 15, 2020 $1,000 $0 Yes n/a
Feb. 15, 2021 $1,000 $0 Yes n/a
Feb. 15, 2022 $0 $0 No Loss of DTC
Feb. 15, 2023 $0 $0 No Loss of DTC

The AHA period for the $1,000 withdrawal is from February 5, 2010, (contract signature date) to January 1, 2014 and the AHA is $4,000.

The AHA period applicable to the loss of DTC is from January 1, 2012, (ten years preceding the loss of DTC) to the current date and the AHA is $9,000 ($10,000 paid within the period, minus the $1,000 attributed as having been repaid for 2012. The $1,000 attributed to the oldest debt of $2,000 for 2010 and 2011 is not part of the calculation, as these precede the start of the AHA period for the loss of DTC).

Example: AHA and overlapping periods – withdrawal, loss of DTC and contract closure

An RDSP is opened on February 5, 2010 and, by January 1, 2014, $4,000 in grant and bond is paid into the account. On January 1, 2014, $1,000 is withdrawn from the RDSP. The required repayment of $3,000 is made on January 1, 2015. The beneficiary is DTC eligible until 2021 with an additional $1,000 being paid on February 15 of every year from 2014 to 2021.

In 2022 to 2024 the beneficiary is DTC ineligible and no election is made to keep the plan open.

The contract is closed on March 1, 2024 and a repayment of $9,000 is processed on May 15, 2024.

Table: AHA and overlapping periods – withdrawal, loss of DTC and contract closure
Date Grant and Bond Paid Grant and Bond Repaid DTC Eligibility Event Requiring Repayment of Grant and Bond
March 15, 2010 $1,000 $0 Yes n/a
Feb. 15, 2011 $1,000 $0 Yes n/a
Feb. 15, 2012 $1,000 $0 Yes n/a
Feb. 15, 2013 $1,000 $0 Yes n/a
Jan. 1, 2014 $0 $0 Yes $1,000 withdrawal
Feb. 15, 2014 $1,000 $0 Yes n/a
Feb. 15, 2015 $1,000 $0 Yes n/a
Feb. 15, 2015 $0 $3,000 Yes n/a
Feb. 15, 2016 $1,000 $0 Yes n/a
Feb. 15, 2017 $1,000 $0 Yes n/a
Feb. 15, 2018 $1,000 $0 Yes n/a
Feb. 15, 2019 $1,000 $0 Yes n/a
Feb. 15, 2020 $1,000 $0 Yes n/a
Feb. 15, 2021 $1,000 $0 Yes n/a
2022 $0 $0 No Loss of DTC
2023 $0 $0 No n/a
March 1, 2024 $0 $0 No Close Contract
May 15, 2024 $0 $9,000 No n/a

The AHA period for the withdrawal is from February 5, 2010 (contract signature date) to January 1, 2014 and the AHA is $4,000.

The AHA period applicable to the loss of DTC is from January 1, 2012 (ten years preceding the loss of DTC) to the current date and the AHA is $9,000 ($10,000 paid within the period, minus the $1,000 repaid).

The AHA period relating to the termination of the contract is from January 1, 2012 (same as that for the loss of DTC) to the current date and the AHA is $9,000 (also the same as for the loss of DTC since the $9,000 repayment for the event is processed at a later date than the closing of the contract).

Example: AHA and repayment followed by re-adjudication

An RDSP is opened on February 5, 2010, and, by January 1, 2014, $4,000 in grant and bond is paid into the account. On January 1, 2014, $1,000 is withdrawn from the RDSP.

Table: AHA and repayment followed by re-adjudication
Date Grant and Bond paid Grant and Bond Repaid DTC Eligibility Event Requiring Repayment of Grant and Bond
March 15, 2010 $1,000 $0 Yes n/a
Feb. 15, 2011 $1,000 $0 Yes n/a
Feb. 15, 2012 $1,000 $0 Yes n/a
Feb. 15, 2013 $1,000 $0 Yes n/a
Jan. 1, 2014 $0 $0 Yes $1,000 withdrawal

The AHA period for the withdrawal is from February 5, 2010, (contract signature date) to January 1, 2014, and the AHA is $4,000.

A “no residency” update for 2012 and 2013 is received from CRA after 2015 resulting in the automatic re-adjudication of the January 1, 2012, and January 1, 2013, payments of $2,000, which are reclaimed. The AHA applicable to the withdrawal is, as a consequence, automatically updated to $2,000.

7. Calculating the repayment obligation

This section lays out the rules for the calculation of the grant and bond that must be repaid for an event, as well as the amount of the obligation that has been repaid to date.

While the AHA constitutes the amount of grant and bond that the issuers must set aside to meet potential repayment obligations, when one of the events listed in section 2.1 occurs, a portion or the entire amount must be repaid to the Government of Canada. For each event in a contract (or contracts if in a transfer situation), four repayment obligation amounts may be calculated:

  • repayment obligation;
  • amount of obligation that has already been repaid;
  • outstanding repayment obligation; and
  • repayment surplus (if any).

7.1 Repayment obligation

A repayment obligation (what must be repaid to the Government of Canada) is calculated as:

  1. If the event is other than a withdrawal dated after December 31, 2013,
    Grant and bond paid within the AHA period, minus the amount of that grant and bond that is also a repayment obligation under an earlier event; or
  2. If the event is a withdrawal dated after December 31, 2013,
    The lesser of
    • $3 for each $1 withdrawn
    • Grant and bond paid within the AHA period, minus the amount of that grant and bond that is also a repayment obligation under an earlier event.
    • FMV - If a repayment obligation is greater than the Fair Market Value of the contract, losses are reported as termination adjustments on the repayment.

7.2 Amount of obligation already repaid

This is equal to the amount of the current repayment obligation that has already been repaid to the Government of Canada. Repayments that have been remitted up to the current date on the contract (or contracts in a transfer situation) must be considered.

7.3 Outstanding repayment obligation

The outstanding repayment obligation for a given event is equal to the repayment obligation, calculated as per the rules in section 7.1, minus the amount of that obligation that has already been repaid, as determined in accordance with the rules in section 7.2.

7.4 Repayment surplus

Should outstanding repayments be a negative amount, the grant and bond amount allocated as having been repaid on account of an event (section 7.2) is in excess of the repayment obligation for the same event (section 7.1).

Action would be taken to return the excess repayments to issuers.

7.5 Calculating the repayment obligation - examples

Example: Repayment obligation with no repayment

An RDSP is opened on February 5, 2010, and, by January 1, 2014, $4,000 in grant and bond is paid into the account. On January 1, 2014, $1,000 is withdrawn from the RDSP and no repayment is made.

In this case, the amount that must be repaid for the withdrawal is $3,000. The amount that has been repaid is $0 and the outstanding obligation is $3,000.

Figure 10: Repayment obligation with no repayment
Text description immediately follows the image 10

Example: Overlapping AHA periods; Repayment obligation for withdrawal and loss of DTC events and; Repayment after event date of withdrawal

An RDSP is opened on February 5, 2010, and, by January 1, 2014, $4,000 in grant and bond is paid into the account. On January 1, 2014, $1,000 is withdrawn from the RDSP. The required repayment of $3,000 is made on February 15, 2015, (and attributed to the payments made in 2010 to 2012, from the oldest to the latest debt). The beneficiary is DTC eligible until 2021 with an additional $1,000 being paid on February 15 of every year between 2014 and 2021.

In 2022 and 2023 the beneficiary is DTC ineligible and no election is made to keep the plan open.

Table: Overlapping AHA periods; Repayment obligation for withdrawal and loss of DTC events and; Repayment after event date of withdrawal
Date Grant and Bond Paid Grant and Bond Repaid DTC Eligibility Event Requiring Repayment of Grant and Bond
March 15, 2010 $1,000 $0 Yes n/a
Feb. 15, 2011 $1,000 $0 Yes n/a
Feb. 15, 2012 $1,000 $0 Yes n/a
Feb. 15, 2013 $1,000 $0 Yes n/a
Jan. 1, 2014 $0 $0 Yes $1,000 withdrawal
Feb. 15, 2014 $1,000 $0 Yes n/a
Feb. 15, 2015 $1,000 $3,000 Yes n/a
Feb. 15, 2016 $1,000 $0 Yes n/a
Feb. 15, 2017 $1,000 $0 Yes n/a
Feb. 15, 2018 $1,000 $0 Yes n/a
Feb. 15, 2019 $1,000 $0 Yes n/a
Feb. 15, 2020 $1,000 $0 Yes n/a
Feb. 15, 2021 $1,000 $0 Yes n/a
2022 $0 $0 No Loss of DTC
2023 $0 $0 No n/a

Repayment obligations:

1. Withdrawal

The AHA period for the withdrawal is February 5, 2010, (contract signature date) to January 1, 2014, and the AHA is $4,000. The amount that must be repaid is $3,000. The amount that has been repaid is $3,000 and the outstanding obligation is $0.

2. Loss of DTC

The AHA period applicable to the loss of DTC is from January 1, 2012, (ten years preceding the loss of DTC) to the current date. However, the grant and bond paid and repaid for the year 2012 is already accounted for in the repayment obligation for the withdrawal (periods overlap). Therefore, only the payments of grant and bond from February 15, 2013, to February 15, 2021, are included in the calculation of the repayment obligation for the loss of DTC event. The amount that must be repaid for the loss of DTC event is $9,000. The amount that has been repaid is $0 and thus the outstanding obligation is $9,000.

Figure 11: Loss of DTC
Text description immediately follows the image 11

Example: Overlapping AHA periods; Repayment obligation for withdrawal and loss of DTC events and; Repayment after event date of withdrawal, with the addition of a second repayment

An RDSP is opened on February 5, 2010, and, by January 1, 2014, $4,000 in grant and bond is paid into the account. On January 1, 2014, $1,000 is withdrawn from the RDSP. The required repayment of $3,000 is made on February 15, 2015. The beneficiary is DTC eligible until 2021 with an additional $1,000 being paid on February 15 of every year between 2014 and 2021.

From 2022 to 2024 the beneficiary is DTC ineligible and no election is made to keep the plan open.

The contract is closed on March 1, 2024, and a repayment of $9,000 is processed on May 15, 2024.

Table: Overlapping AHA periods; Repayment obligation for withdrawal and loss of DTC events and; Repayment after event date of withdrawal, with the addition of a second repayment
Date Grant and Bond Paid Grant and Bond Repaid DTC Eligibility Event Requiring Repayment of Grant and Bond
March 15, 2010 $1,000 $0 Yes n/a
Feb. 15, 2011 $1,000 $0 Yes n/a
Feb. 15, 2012 $1,000 $0 Yes n/a
Feb. 15, 2013 $1,000 $0 Yes n/a
Jan. 1, 2014 $0 $0 Yes $1,000 withdrawal
Feb. 15, 2014 $1,000 $0 Yes n/a
Feb. 15, 2015 $1,000 $0 Yes n/a
Feb. 15, 2015 $0 $3,000 Yes n/a
Feb. 15, 2016 $1,000 $0 Yes n/a
Feb. 15, 2017 $1,000 $0 Yes n/a
Feb. 15, 2018 $1,000 $0 Yes n/a
Feb. 15, 2019 $1,000 $0 Yes n/a
Feb. 15, 2020 $1,000 $0 Yes n/a
Feb. 15, 2021 $1,000 $0 Yes n/a
2022 $0 $0 No Loss of DTC
2023 $0 $0 No n/a
March 1, 2024 $0 $0 No Close Contract
May 15, 2024 $0 $9,000 No n/a

Repayment obligations:

1. Withdrawal

The AHA period for the withdrawal is from February 5, 2010, (contract signature date) to January 1, 2014, and the AHA is $4,000. The amount that must be repaid is $3,000. The amount that has been repaid is $3,000 and the outstanding obligation is $0.

2. Loss of DTC

The AHA period applicable to the loss of DTC is from January 1, 2012, (ten years preceding the loss of DTC) to the current date. The grant and bond paid and repaid for the year 2012 is already accounted for in the repayment obligation for the withdrawal (AHA periods overlap). Therefore, only the payments of grant and bond from February 15, 2013, to February 15, 2021, are used to calculate the repayment obligation for the loss of DTC event. The amount that must be repaid for the event is $9,000. The amount that has been repaid is $9,000 (repayment dated May 15, 2024 is attributed to the grant and bond paid from February 15, 2013 to February 15, 2021), thus the outstanding obligation is $0.

3. Contract closure

The AHA period relating to the contract closure is from January 1, 2012, (same as that for the loss of DTC) to the current date. Since the grant and bond paid during that time has been attributed as having been repaid on account of the previous event (i.e. the AHA period for the closing of the contract overlaps entirely with the period for the loss of DTC), the amounts that must be repaid and have been repaid are $0. Thus the outstanding obligation is $0.

Example: Repayment surplus due to excessive repayment

An RDSP is opened on February 5, 2010, and, by January 1, 2014, $4,000 in grant and bond is paid into the account. On January 1, 2014, $1,000 is withdrawn from the RDSP. A $4,000 repayment is processed on February 15, 2014.

Table: Repayment surplus due to excessive repayment
Date Grant and Bond Paid Grant and Bond Repaid DTC Eligibility Event Requiring Repayment of Grant and Bond
March 15, 2010 $1,000 $0 Yes n/a
Feb. 15, 2011 $1,000 $0 Yes n/a
Feb. 15, 2012 $1,000 $0 Yes n/a
Feb. 15, 2013 $1,000 $0 Yes n/a
Jan. 1, 2014 $0 $0 Yes $1,000 withdrawal
Feb. 15, 2014 $0 $4,000 No n/a

The AHA period for the withdrawal is from February 5, 2010, (contract signature date) to January 1, 2014. The repayment, at $4,000, is $1,000 in excess of the amount that must be repaid for the withdrawal (proportionate repayment rule requiring $3 be repaid for each $1 withdrawn), resulting in a repayment surplus.

In this situation, it is recommended to contact the CDSP to determine any necessary corrective action.

Example: Repayment surplus due to re-adjudication

An RDSP is opened on February 5, 2010 and, by January 1, 2014, $4,000 in grant and bond is paid into the account. On January 1, 2014, $1,000 is withdrawn from the RDSP and the required $3,000 repayment due to the proportionate repayment rule is processed on February 15, 2014.

Table: Repayment surplus due to re-adjudication
Date Grant and Bond Paid Grant and Bond Repaid DTC Eligibility Event Requiring Repayment of Grant and Bond
March 15, 2010 $1,000 $0 Yes n/a
Feb. 15, 2011 $1,000 $0 Yes n/a
Feb. 15, 2012 $1,000 $0 Yes n/a
Feb. 15, 2013 $1,000 $0 Yes n/a
Jan. 1, 2014 $0 $0 Yes $1,000 withdrawal
Feb. 15, 2014 $0 $3,000 No n/a

The AHA period for the withdrawal is from February 5, 2010, (contract signature date) to January 1, 2014.

A “no residency” update for 2012 and 2013 is received from CRA after February 15, 2014, resulting in the automatic re-adjudication of the February 15, 2012, and February 15, 2013, payments of $2,000, which are reclaimed. As a consequence, the amount that must be repaid for the withdrawal event is automatically updated to $2,000. However, the amounts paid for 2012 and 2013 that has been repaid is $3,000, resulting in a repayment surplus of $1,000.

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