InfoCapsule 11: Carry forward

From: Employment and Social Development Canada

Preface

Registered Disability Savings Plan (RDSP) holders can access unused Canada Disability Savings Grant (CDSG) and Canada Disability Savings Bond (CDSB) entitlements from the previous 10 years.

To access unused entitlements, the beneficiary must:

• be a resident in Canada at the time an eligible contribution is made and for each year of entitlement
• be eligible for the Disability Tax Credit (DTC)
• have a valid Social Insurance Number (SIN)

The CDSB and CDSG is paid until December 31 of the calendar year in which the beneficiary turns 49 years of age.

CDSG limits

Annual limit of $10,500 with carry forward:

• The matching rate for unused CDSG entitlements is the same as the one that would have applied if the contribution had been made in the year in which the CDSG entitlement is being carried forward
• Amounts are paid based on the entitlements available, using the highest matching rate first, from the oldest year to the newest, followed by those at the lower rates

Annual statement of grant entitlement

Sent annually by Employment and Social Development Canada (ESDC) to all RDSP holders to inform them of the amount of CDSG entitlements available for the beneficiary, as well as the amount of contributions required to maximize the amount of CDSG that can be paid for that calendar year.

CDSB limits

Annual limit of $11,000 with carry forward:

• The CDSB entitlements are the same as the one that would have applied if the request had been made in the year that is being carried forward
• Amounts are paid based on the entitlements available, from oldest to newest. The first payment is upon request and subsequent payments are automated in February of each eligible year

Example of a CDSG carry forward

In 2010, Peter opens an RDSP and is eligible for a CDSG matching rate of 300% and 200%; and continues to be eligible at the same rates onward. In 2008 and 2009, he was eligible for a matching rate of 100%.