InfoCapsule 12: Carry forward of grant and bond entitlements
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.
Consult this page frequently for newer versions. The following laws and regulations take precedence over information contained in InfoCapsules in the event of discrepancies:
- Income Tax Act
- Canada Disability Savings Act
- Canada Disability Savings Regulations
As of January 2011, Registered Disability Savings Plan (RDSP) holders can claim unused grant and bond entitlements from the past 10 years (going back no farther than 2008). Any grant entitlement that the beneficiary has accrued is paid to the beneficiary's RDSP upon receipt of a contribution. Carry forward applies to all RDSP, regardless of when the plan was registered. The maximum annual amounts are $10,500 in Canada Disability Savings Grant (grant) entitlements and $11,000 in Canada Disability Savings Bond (bond) entitlements.
To access unused entitlements
The beneficiary must:
- be a Canadian resident at the time the eligible contribution is made and for each year of entitlement;
- have a valid Social Insurance Number;
- be eligible for the Disability Tax Credit at the time the contribution is made and for each year of entitlement; and
- apply for the bond and/or make a contribution on or before December 31 of the calendar year in which the beneficiary turns 49 years old.
The lifetime limit of $200,000 in contributions must be respected when carry forward amounts are being accessed.
Grant and bond entitlements
Since January 1, 2011, balances of available unused grant and bond entitlements are determined and maintained by Employment and Social Development Canada (ESDC).
Carry forward entitlement for grant
The matching rate on unused grant entitlements is the same as that which would have applied had the contribution been made in the year that is being carried forward. Matching grant rates Footnote 1 of 300%, 200% and 100% are based on the beneficiary's family income, starting no earlier than 2008.
Entitlements are paid in descending order, using the highest available matching rate first, from oldest to newest, followed by those at lower rates.
Carry forward entitlement for bond
As of 2011, the bond carry forward amount will be paid in February of the same calendar year as entitlement or when the bond is requested (whichever comes first), starting no earlier than 2008.
Statement of entitlement
A statement of entitlement is sent to all RDSP holders at the beginning of the calendar year to inform them of the amount of grant and/or bond entitlements available for the beneficiary, as well as the amount of contributions required to maximize the amount of grant that can be paid for that calendar year.
Example of grant entitlement calculation
In 2010, Peter opens an RDSP. In 2008 and 2009, he was eligible for a matching rate of 100%. Since 2010, he is eligible for a grant matching rate of 300% and 200%.
Each year, grant entitlements accumulate. In 2013, Peter made a contribution of $4,000.The first $2,000 of the contribution attracted all accumulated entitlements at 300% (2010, 2011, 2012 and 2013); the next $2,000 attracted the two oldest entitlements at 200% (2010 and 2011). Peter's $4,000 contribution attracted a total of $10,000.
In 2014, the first $500 of a $4,500 contribution attracted the 300% grant entitlement (for 2014), the next $3,000 of the contribution attracted three entitlements at 200% (2012, 2013 and 2014), and finally, the last $1,000 of the contribution attracted the oldest entitlement at 100% (2008).
|Year||Contribution||Entitlement at 300%||Entitlement at 200%||Entitlement at 100%||Paid|
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