Video for the Registered Disability Savings Plan

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Registered Disability Savings Plan

Visit:

Canada.ca/RDSP

[Voice over, slide 1]

Hello everyone.

My name is Jennifer and I'm here from Employment and Social Development Canada to talk to you about the Registered Disability Savings Plan, or RDSP, and the Canada Disability Savings Grant and Bond.

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Agenda

1. What is the Registered Disability Savings Plan (RDSP)?
2. The Canada Disability Savings Grant
3. The Canada Disability Savings Bond
4. Saving and taking money out of an RDSP
5. Helpful links and resources

[Voice over, slide 2]

I would like to share with you the agenda for today's webinar so you can get an idea of what I am going to cover today:

• I'll start by giving an overview of the RDSP, including what it is, the advantages of having an RDSP, who qualifies for an RDSP, and the process of opening a plan
• Then I'll go over how you can build savings in the plan through the Canada Disability Savings Grant and Bond
• And then I'll talk about what happens once a plan is opened, and when its time, how you may take money out of the RDSP
• Finally, at the end of the webinar, I will share some resources where you can get additional information about the RDSP and the Grant and Bond

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RDSP Advantages

• The RDSP is a long-term savings plan for Canadians with disabilities to help them save for the future
• The Government of Canada will also contribute money to your RDSP to help your savings grow!

[Visual description]

Illustration of three growing plants. The plants are arranged left to right on a blue arrow, with the smaller plant on the left, medium plant in the middle and larger plant on the right, symbolizing financial growth over time.

These plants are labelled:

• Start a plan
• Make it grow
• Take money out

[Voice over, slide 3]

Let's get started. You may be wondering, what exactly is an RDSP?

It is a long-term savings plan that helps persons with disabilities to save for the future.

And for those who are eligible, the Government of Canada can also add money to your RDSP, which will be covered later in the presentation.

But it's important to know that, like any savings plan, especially long-term ones, the earlier you open an RDSP, the more your savings will grow!

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RDSP Advantages

• It does not affect Government of Canada benefits (CPP, OAS/GIS, GST rebate, etc.)
• Most provinces and territories fully exempt the income from the RDSP when determining monthly benefits
• It helps you to save money for the future which can be used for anything
• Anyone can contribute with the plan holder's permission
• A maximum of $200,000 in contributions can ever be put into a plan

[Voice over, slide 4]

There are many advantages of having an RDSP

At the time of recording this video, in all provinces and territories, opening and contributing to a plan will not affect your other federal or provincial/territorial benefits, such as monthly disability income support payments or monthly pension payments.

If you are in Quebec, New Brunswick and Prince Edward Island, making withdrawals from a plan may impact the amount of provincial benefits you receive. Depending on the province that you live in, the RDSP may affect other provincial benefits that you receive. Please contact the provincial supports program of your province to learn more.

The money from an RDSP can be used for anything. When it is time to withdraw the money, there are no rules as to what the money needs to be spent on.

You and anyone that receives permission from the plan holder can deposit money into the plan. There is no maximum per year that you can put into the RDSP, but a maximum of $200,000 can be put in over the lifetime of the person with the disability and you have until the end of the year that the person with the disability turns 59 to contribute.

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RDSP Advantages

• The Government of Canada will help you save by adding money to your RDSP:
  • Canada Disability Savings Bond up to $20,000
  • Canada Disability Savings Grant up to $70,000

*Depends on the family income of the person with the disability

[Voice over, slide 5]

A big advantage of the RDSP is that, if the person with the disability is eligible, the Government may add up to $90,000 in grants and bonds into their RDSP.

The bond can be up to $20,000 and the grant can be up to $70,000.

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Who qualifies for the RDSP

The beneficiary (i.e., the person with the disability) must:

• be resident of Canada
• have a Social Insurance Number (SIN)
• be approved for the Disability Tax Credit
• have their plan opened on or before December 31 of the year they turn 59

[Voice over, slide 6]

• To qualify to open an RDSP, the person with the disability must meet specific conditions. This person must:
  • be resident in Canada for tax purposes
  • have a valid social insurance number, or SIN
  • be approved for the disability tax credit through the Canada Revenue Agency, and
  • the plan needs to be opened on or before December 31st of the year in which the beneficiary turns 59

There can only be one RDSP opened at any given time for the person with the disability. It is possible though to move your RDSP to a different financial institution.

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Who can set up an RDSP?

• The plan holder is responsible for the operation of the RDSP
• Beneficiaries over the age of majority (adults) are generally the holder of their own plan
• For beneficiaries who are minors, the holder must be a parent or the individual or organization legally responsible for the beneficiary

*All funds in the RDSP belong to the beneficiary

[Voice over, slide 7]

The Holder of an RDSP is the person or organization that opens the plan, and they are responsible for the day-to-day operation of the RDSP. That includes controlling all money deposited into the plan and directing when and how much money comes out of the plan.

If the person with the disability is an adult, they are usually the holder of their own plan, but if the person with the disability is a child, the holder must be the person or the organization legally responsible for them.

When the child with the RDSP becomes an adult, they can be added as a co-holder to the RDSP, or they can become the only holder of their RDSP, as long as they have legal capacity to sign a contract for themselves.

It's important to note that once deposited into the RDSP, all funds belong to the beneficiary.

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The Canada Disability Savings Grant

• The Canada Disability Savings Grant is a matching grant that is payable on contributions made before the end of the year that the beneficiary turns 49
• An RDSP must be open in order to receive the grant

[Voice over, slide 8]

Now, one way the Government can help grow RDSP savings is through the Canada Disability Savings Grant, which I'll just call the grant.

So, with the grant you need to put money into the RDSP to get grant money from the government.

The grant is money that matches the money deposited into the plan. How much money received from the Government depends on the person with the disability's family income and how much money that can be saved in the RDSP.

Grant is paid to match contributions made to the RDSP before the end of the year in which the person with the RDSP turns 49 (forty-nine). After that, the government will not be able to match the money that is put into the plan.

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The Canada Disability Savings Grant

• The maximum yearly grant amount is $3,500, with a lifetime maximum of $70,000
• This means that you can get up to 3X the amount that you are able to save in your RDSP

[Voice over, slide 9]

Depending on the person with the disability's family income, the maximum amount of grant a person with an RDSP may get in a year is $3,500. In this case, $1,500 would need to be deposited into the plan to get $3,500 from the Government.

If the person with the disability was approved for the Disability Tax Credit in past years, they could receive unclaimed grants for those years, up to 10 years ago, if they contribute sufficiently. In that case, they could receive up to $10,500 in a year.

The total amount of money the person with the RDSP can receive in grant over their lifetime is $70,000, depending on their family income and their ability to save money in their RDSP.

Remember, even if you are only able to save a smaller amount of money, the Government may add up to 3 times the amount that you are able to deposit!

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The Canada Disability Savings Grant

• Annual entitlement is based on family income thresholds and the contributions to your RDSP
• The family income thresholds change each year; to find out for the current year please go to the link in the webinar resources section

[Voice over, slide 10]

Grant entitlements are based on family income and the contributions that can be made to the RDSP.

To learn the current income thresholds, please consult the webinar resources section associated with this video.

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The Canada Disability Savings Grant

2025 Grant Income Threshold: $114,750

• Below or equal to the income threshold:
  • $500 at 300% rate = $1,500 grant
  • $1,000 at 200% rate = $2,000 grant
• Above the income threshold:
  • $1,000 at 100% rate = $1,000 grant

[Voice over, slide 11]

When the person with the disability's family income is below or equal to the income threshold, the person with the RDSP is entitled to $3,500 for the year from the Government of Canada.

The first $500 that is deposited into the RDSP will be matched by the Government of Canada at a rate of 300 percent, for $1,500, and the next $1,000 deposited will be matched at a rate of 200 percent, for an additional $2,000.

At this rate, this would mean that $1,500 would need to be deposited into the RDSP to gain the full matching amount of $3,500 this year.

If the person with the RDSP has a family income that is above the threshold, their grant entitlement for the year is $1,000.

So, the first $1,000 contributed into the RDSP will be matched at a 100 percent rate by the Government.

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The Canada Disability Savings Bond

• The Canada Disability Savings Bond is money the government contributes to the RDSPs of beneficiaries with low and modest family income
• It is payable up until the end of the year that the beneficiary turns 49
• You do not need to put any money into your plan to get the bond

[Voice over, slide 12]

Now, I will get into the other way that the Government can help to build savings in an RDSP, which is the Canada Disability Savings Bond, and I will just call this the bond.

The bond is money that the government adds into the RDSPs of persons with disabilities with a low to modest family income. Contributions are not required, and the bond will be automatic if the person with the disability meets the income requirement.

If you meet the income requirement, then you will get the bond simply by having an RDSP open, signing the application form and submitting a bond request with your financial institution.

It is important to note that the bond can only be paid into an RDSP until the end of the year in which the beneficiary turns 49. After that, the government will no longer add bond to the RDSP.

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The Canada Disability Savings Bond

2025 Bond Income Thresholds

• Full bond: ≤ $37,487
• Partial bond: between $37,487 and $57,375

The maximum yearly bond amount is $1,000 until you reach the lifetime limit of $20,000.

If your family income is less than or equal to the full bond income threshold, you will receive $1,000.

If your family income is between the two thresholds, you will receive a partial bond

[Voice over, slide 13]

If the person with a disability has a low to modest family income, they will be able to receive up to $1,000 of bond each year, to a maximum of $20,000.

If the person with the disability was approved for the Disability Tax Credit in past years, they could receive more money from the Government when opening a plan, up to $11,000 in a year in bond entitlements for the past 10 years plus the current year.

And this is without having to put any money into the plan! This means that even if you're not able to put money in the RDSP, the government will still add money to it, if the family income is low to modest.

If the person with the disability's family income is under the income threshold, they will get $1,000 in bond added to the RDSP.

Depending on family income, the person with the disability may also be eligible to receive a portion of the bond amount. To learn the family income bond thresholds for the current year, please consult the webinar resources associated with this video.

And it is possible for a beneficiary to get both the bond and the grant.

Your family income is calculated each year to determine if you will get bond or not.

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How much you could get

Estimate your grants and bonds payments for the year

What is your annual family income?

$32,000

How much are you contributing to the plan this year?

$1,000

Estimate grants and bonds

With a family income of $32,000 and contributions of $1,000, you would get:

• Grant amount: $2,500
• Bond amount: + $1,000
• Total in grants and bonds: = $3,500

A link to the grant and bond calculator can be found in the resource section of the webinar

[Visual description]

A screenshot of a calculator tool showing how grant and bond amounts are estimated based on family income and contributions.

[Voice over, slide 14]

On our website, there is a grant and bond calculator that will show you how much you could get in grant and bond amounts from the Government of Canada into your RDSP. You will need to provide your annual family income and how much you plan to contribute to the RDSP to learn how much in grant and bond you may receive.

A link to the grant and bond calculator can be found in the resource section of the webinar.

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Opening an RDSP

• Decide which financial organization best suits the beneficiary's needs
• Make an appointment to open an RDSP
• Ask about what type of identification and paperwork to bring
• Make sure that the advisor provides the paperwork to apply for the grant and bond
• Please refer to the webinar resources to find a list of financial institutions that offer RDSPs

[Voice over, slide 15]

There are a number of financial organizations that currently offer RDSPs. You can find a link to the list of financial institutions that offer RDSPs in the webinar resources associated with this video.

If you like, you can stay with your own financial institution if it happens to be on the list, or you can choose a different one from the list if you prefer. The choice is yours! If your preferred institution is not on the list, you can still ask your bank if they can help you to open a RDSP.

Some financial planners and credit unions may not be on the list provided but they may still be able to help you to open a plan.

We suggest that you call to make an appointment to open an RDSP before visiting a branch. Some institutions will only open an RDSP centrally and you may not be able to go in person to sign the papers. For those that open RDSP's at a branch, you can find out what they'll require you to bring, and the advisor can be prepared for your visit.

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Importance of Filing Income Tax

• The amount of grants and bonds you receive in a year is based on family income
• We use the family income reported on your tax returns from 2 years before (for 2025, we look at your 2023 tax return)
• For beneficiaries under the age of 19, calculations are based on parents'/guardian's income
• Once the child turns 19, it is their own income that is used

[Voice over, slide 16]

Filing personal income taxes is important for everyone and often gives access to many Government of Canada benefits.

The RDSP program uses the person with the disability's family income to calculate how much grant and bond is paid into an RDSP. Family income is checked with information held by the Canada Revenue Agency based on filed income tax returns.

We use the person with the disability's family income that is reported on their tax returns from 2 years before to calculate how much grant and bond will be paid into your RDSP. For example, in 2025, our system will look at tax return information for 2023 to figure out how much the person with the RDSP should get in grant and bond for that year.

If income information is not available because taxes were not filed, the person with the RDSP would only be eligible to receive up to $1,000 a year in matching grant and they would not receive any bond.

For children with RDSPs, grant and bond amounts are based on the parents' or guardians' income.

When the person with the RDSP becomes an adult, their own family income is used, no matter who they live with or who supports them financially.

It's also important to understand that this change in calculation does not happen automatically and will require that when the child becomes an adult, they revisit their financial institution to resign permission with the grant and bond application.

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Taking money out of an RDSP

There are 2 ways to take money out of an RDSP:

• regular payments must begin by the end of the year in which the beneficiary turns 60 years
• single payments can be requested but there are limits to how much can be taken out at once

*For additional information about withdrawals, please consult the webinar resources

[Voice over, slide 17]

When it's time to withdraw money, there are two different ways to get the money out of your RDSP:

• the first is regular payments from the RDSP, and these payments must start by the end of the year that the person with the disability turns 60 years
• once these payments are started, they must continue every year until all the money is gone or the person with the disability dies
• the second way to get the money out of your RDSP is through one-time payments
• these can come out of the RDSP at any time if these payments are allowed by the financial organization

With either type of payment, there may be minimum or maximum amounts that can be withdrawn, but these will depend on various factors including how long it has been since grant and bond were paid into the RDSP, and the amount of personal contributions in the plan vs grants and bonds that have been received.

For additional questions about withdrawals, please refer to the link provided in the webinar resources associated with this video. I also recommend that you communicate with the financial institution that you have opened the plan with to discuss the savings within an RDSP and how to plan for withdrawals.

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Taking money out of your RDSP

• It is important to wait 10 years since the last time any grant and/or bond was paid before taking money out of the RDSP
• If you decide to take money out of your RDSP before the 10 years are up, you will need to pay back some of the money received from the Government of Canada at that time

[Voice over, slide 18]

The RDSP is not meant to help with immediate financial need, but instead the money needs to stay in the plan over time to help build savings for the future.

To help you save money over time, all the money in the plan needs to stay in the RDSP for 10 years, every time you get money in grant and bond from the Government.

If you decide to not wait for the 10 years and you need to take money out of your RDSP sooner, then you will need to pay back some of the money you received from the government out of your RDSP.

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Taking money out of your RDSP

When taking money out of the RDSP:

• if you wait 10 years since you last got grant or bond money, you will not need to repay any money back to the Government
• if the beneficiary is 60 years old, you will not need to pay back any money when you take money out

[Voice over, slide 19]

So just to repeat from the previous slide, when you decide to take money out, if you wait 10 years since you last got grant or bond money, you will not need to pay any money back to the Government.

If you are 60 years old, you will not need to pay back any money from your RDSP when you take money out.

If you have a shortened life expectancy certified by a doctor, the plan can be changed to a Specified Disability Savings Plan allowing you to access funds in your plan without needing to pay any money back to the government.

If you decide to start your payments early or to take a lump sum of money out of your RDSP before the 10 years is up, you will need to repay money to the government out of your RDSP.

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Helpful Resources

• You can call 1-800-O-Canada (1-800-622-6232) to get more general information about the RDSP, grant and bond
• For questions about withdrawals contact CRA Registered Plans Directorate at 1-800-267-3100
• For information about an existing RDSP, you can contact the ESDC Client Services Centre at 1-866-204-0357 (Mon-Fri, 8am-5pm EST)

[Voice over, slide 20]

Finally, here are some resources where you can get additional information about the RDSP, the grant and the bond.

For general information about the RDSP and the grant and bond, you can call 1-800-O-Canada or 1-800-622-6232.

For questions specifically about the RDSP and withdrawals, please call the Canada Revenue Agency at the Registered Plans Directorate at 1-800-267-3100.

If you have questions about an existing plan or if you are in the process of opening a plan, please call the Client services centre at 1-866-204-0357.

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Navigation Supports

• Since October 2024, ESDC funds organizations to provide one-on-one assistance to individuals and their families navigate the process of obtaining the Disability Tax Credit (DTC)
• The link to the list of organizations can be found in the webinar resources associated with the video

[Voice over, slide 21]

Another very helpful resource that I would like to share is where you can turn to, to receive free support to access the Disability Tax Credit.

Employment and Social Development Canada is funding national and community-based, not-for-profit organizations to provide disability benefits navigation services to provide support to persons with disabilities and their families to access federal, provincial and territorial disability benefits.

This funding allows these organizations to remove barriers for persons with disabilities and their families and navigate the process of applying for and accessing the DTC, which is needed to be able to open a RDSP.

The list of organizations can be found in the webinar resources associated with the video.

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Thank You

Registered Disability Savings Plan

Visit:

Canada.ca/RDSP

[Voice over, slide 22]

I've come to the end of the webinar today. Thank you for taking the time to learn more about the Registered Disability Savings Plan and the Canada Disability Savings Grant and Bond.