Registered Disability Savings Plan
Budget 2007 proposed the creation of the Registered Disability Savings Plan (RDSP), including the Canada Disability Savings Grant and the Canada Disability Savings Bond as a way to help eligible individuals with disabilities and their families save for long-term financial security. On December 14, 2007, legislation to amend the Income Tax Act and create the Canada Disability Savings Act received Royal Assent.
The Canada Disability Savings Grant is a matching grant from the Government of Canada paid directly into an RDSP. The Canada Disability Savings Bond is money paid directly into an RDSP to help low- and modest-income families save for long-term financial security. The bond is paid regardless of whether contributions are made to an RDSP.
On December 23, 2008, the Honourable Diane Finley, Minister of Human Resources and Skills Development, and the Honourable Jim Flaherty, Minister of Finance, launched the national availability of RDSPs.
An RDSP is a savings plan intended to help people with disabilities and their families save for the future. In general, any person under the age of 60 who is eligible for the Disability Tax Credit (Disability Amount) and is a Canadian resident is eligible for an RDSP. Earnings accumulate tax-free until money is withdrawn from the RDSP. Parents or guardians may open an RDSP for a minor. With written permission from the holder, anyone can contribute to the RDSP. There is no annual contribution limit, but there is a lifetime contribution limit of $200,000.
Canada Disability Savings Grant
The Government of Canada will pay a matching grant of up to $3,500 a year, depending on the amount contributed and the beneficiary’s family income, with a lifetime limit of $70,000. Grants will be paid into the RDSP until the year the beneficiary turns 49 years old.
Canada Disability Savings Bond
The Government will also pay a bond of up to $1,000 a year into the RDSPs of low- and modest-income Canadians. No contributions are necessary to receive the bond. There is a limit of $20,000 over the beneficiary’s lifetime. Bonds will be paid into the RDSP until the year the beneficiary turns 49 years old.
Canada’s Economic Action Plan
Over the past few years, the Government of Canada has committed to breaking down barriers that prevent Canadians from reaching their full potential. The Government invests annually to help address the needs of people with disabilities. Canada’s Economic Action Plan, introduced as part of Budget 2009, included:
- $1 billion over two years for renovations and energy retrofits of social housing, including renovations that support people with disabilities
- An additional $75 million over two years for the construction of new social housing units for people with disabilities
- $20 million for each of two years to improve the accessibility of federally-owned buildings
- Effective doubling of the tax relief provided by the Working Income Tax Benefit, which includes a supplement for persons with disabilities
- Extending the increase in the Home Buyers’ Plan limit and the First-Time Home Buyers’ Tax Credit to people with disabilities who are not first-time home buyers but are buying a more accessible or functional home
Budget 2008 introduced new measures that will increase access to post-secondary education for students with permanent disabilities, including a new Repayment Assistance Plan for Borrowers with a Permanent Disability.
To learn more about Canada’s Economic Action Plan, visit www.actionplan.gc.ca.
For further information on federal programs for people with disabilities, visit www.hrsdc.gc.ca/disability or contact 1 800-O-Canada (1-800-622-6232). For people using a teletypewriter device (TTY), call 1-800-926-9105.
For further information on the RDSP, the grant and the bond, visit www.disabilitysavings.gc.ca.
