InfoCapsule 9: Contributions and rollovers

From: Employment and Social Development Canada

Disclaimer: RDSP issuers

The information contained on this page is technical in nature. The target audience are issuers of the:

  • Registered Disability Savings Plan (RDSP)
  • Canada Disability Savings Grant (CDSG)
  • Canada Disability Savings Bond (CDSB)

For general information, visit the RDSP page.

On this page

Alternate format

A PDF version of the InfoCapsules for RDSP providers is available on the index page.

List of acronyms

CDSG
Canada Disability Savings Grant
CRA
Canada Revenue Agency
DTC
Disability Tax Credit
PGAP
Primarily government assisted plan
PRPP
Pooled Registered Pension Plan
RDSP
Registered Disability Savings Plan
RESP
Registered Education Savings Plan
RRIF
Registered Retirement Income Funds
RPP
Registered Pension Plan
RRSP
Registered Retirement Savings Plan
SDSP
Specified Disability Savings Plan
SPP
Specified Pension Plan

Contributions

Amounts deposited into a Registered Disability Savings Plan (RDSP) by the plan holder(s), or by anyone with the written authorization of the holder(s):

  • can attract the Canada Disability Savings Grant (CDSG)
  • lifetime limit of $200,000
  • the contribution portion of a withdrawal is not taxable
  • belong to the beneficiary or the beneficiary’s estate once deposited into the RDSP
  • not tax deductible
  • beneficiary must be a resident in Canada
  • beneficiary must be eligible for the Disability Tax Credit (DTC)
  • are allowed until December 31 of the calendar year in which the beneficiary turns 59 years of age
  • are not allowed if the beneficiary is deceased

Rollovers

Moving funds from a qualified retirement or education savings product into an RDSP:

  • do not attract grant
  • count towards the $200,000 lifetime contribution limit
  • the rollover portion of a withdrawal is taxable
  • count as a contribution when determining if an RDSP is a primarily government assisted plan (PGAP) or not
  • issuers must use a rollover form that includes the Canada Revenue Agency (CRA) prescribed information
  • beneficiary must be a resident in Canada
  • are allowed until December 31 of the calendar year in which the beneficiary turns 59 years of age
  • are not allowed if the beneficiary is deceased

Conditions specific to an education savings rollover

The relinquishing Registered Education Savings Plan (RESP) must allow accumulated income payments and one of the following 3 conditions must be met:

  1. the beneficiary has a severe and prolonged mental impairment that can reasonably be expected to prevent them from pursuing post‑secondary education
  2. the RESP account has been in existence for at least 10 years and each RESP beneficiary is at least 21 years old and not eligible to receive an educational assistance payment
  3. the RESP has been in existence for more than 35 years (or 40 years in the case of a specified plan)

Note: An education savings rollover is not permitted during a period in which the beneficiary is DTC-ineligible or in a Specified Disability Savings Plan (SDSP).

The following proceeds can be rolled over into an RDSP:

  • the accumulated income (earnings) from a Registered Education Savings Plan (RESP)

Note: Must use the information prescribed on the CRA rollover form number RC435.

Conditions specific to a retirement savings rollover

The following condition must be met:

  • the beneficiary must be considered as financially dependent of their parent or grandparent immediately before that person’s death

A retirement savings rollover is permitted:

  • at any time during which the beneficiary is DTC-eligible
  • up to the end of the fourth calendar year after the year in which the beneficiary becomes DTC-ineligible
  • in an SDSP

Eligible proceeds can be rolled over into an RDSP from:

  • Registered Retirement Savings Plan (RRSP)
  • Registered Retirement Income Funds (RRIF)
  • Registered Pension Plan (RPP)
  • Pooled Registered Pension Plan (PRPP)
  • Specified Pension Plan (SPP)

Note: Must use the information prescribed on the CRA rollover form number RC4625.

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