Canada disability savings grant and Canada disability savings bond

Canada disability savings grant

The grant is an amount that the Government of Canada pays into an registered disability savings plan (RDSP). The government will pay a matching grant of 300%, 200%, or 100%, depending on the beneficiary’s adjusted family net income and the amount contributed. The beneficiary’s adjusted family net income is calculated as follows:

• from birth to December 31 of the year the beneficiary turns 18, the beneficiary’s adjusted family net income is based on the income information used to determine the Canada child benefit (CCB) for that beneficiary
• beginning the year the beneficiary turns 19 until the RDSP is closed, the beneficiary’s adjusted family net income is based on their income plus their spouse’s, or common-law partner’s income
• if the beneficiary is under the care of a department, agency, or institution for at least one month in the year, the adjusted family net income is based on the allowance payable to the department, agency, or institution under the Children’s Special Allowances Act

An RDSP can get a maximum of $3,500 in matching grants in one year, and up to $70,000 over the beneficiary’s lifetime. A beneficiary's RDSP can receive a grant on contributions made until December 31 of the year in which the beneficiary turns 49.

The amount of the grant is based on the beneficiary’s adjusted family net income as follows:

* The beneficiary adjusted family net income thresholds are indexed each year to inflation. The income thresholds shown are for 2023.

Amount of Canada disability savings grant when the beneficiary’s adjusted family net income is $106,717 or less:

• on the first $500 contribution—$3 grant for every 1 dollar contributed, up to $1,500 a year
• on the next $1,000 contribution—$2 grant for every 1 dollar contributed, up to $2,000 a year

Amount of Canada disability savings grant when the beneficiary’s adjusted family net income is more than $106,717:

• on the first $1,000 contribution—$1 grant for every 1 dollar contributed, up to $1,000 a year

Canada disability savings bond

The bond is an amount paid by the Government of Canada directly into an RDSP. The government will pay a bond of up to $1,000 a year to low-income Canadians with disabilities. No contributions have to be made to get the bond. The lifetime bond limit is $20,000. A bond can be paid into an RDSP until the year in which the beneficiary turns 49.

The amount of the bond is based on the beneficiary’s adjusted family net income as follows:

* The beneficiary adjusted family net income thresholds are indexed each year to inflation. The income thresholds shown are for 2023.

Beneficiary's adjusted family net income:

• $34,863 or less (or if the holder is a public institution)—Bond $1,000
• between $34,863 and $53,359*—Part of the $1,000 is based on the formula in the Canada Disability Savings Act
• more than $53,359*—No bond is paid

To qualify for the bond or to earn a grant, the beneficiary must file income tax and benefit returns for the past two years and all future taxation years when they have an RDSP.

For a beneficiary under the age of 18, their grant and bond amounts are calculated using the combined income of their parents or guardians from filed income tax returns. To continue receiving the correct amount of grants and bonds in the year they turn 19 and for every year after that, the beneficiary must start filing personal income tax returns, every year beginning in the year they turn 17.

Carry forward of unused grant and bond

Before the end of the year you turn 49 years of age, you can carry forward up to 10 years of unused grant and bond entitlements to future years, as long as you met the eligibility requirements during the carry-forward years (for example, if you were approved for the disability tax credit and you were a Canadian resident). If an RDSP was opened: 

• in 2023, the carry forward period would be from 2013 to 2023;
• in 2017, the carry forward period would be from 2017 to 2027.

The grant and bond will be paid on unused entitlements up to an annual maximum of $10,500 for the grant and $11,000 for the bond.

Employment and Social Development Canada (ESDC) administers the grant and the bond programs. ESDC bases the amount of the grant and bond that are available for any particular year on the beneficiary’s family income, as well as on matching rates.

When do grants and bonds have to be repaid

10-Year Repayment Rule

If any of the following events occur, all government grants and bonds paid into the plan during the preceding 10 years before the event must be repaid to the Government of Canada. Repayments are required when any of the following conditions applies:

• the RDSP is terminated
• the plan ceases to be an RDSP
• the beneficiary loses DTC approval before the age of 60 and the holder chooses to close or withdraw amounts from the RDSP
• the beneficiary dies

To ensure the funds in an RDSP are available to meet potential obligations under the 10-year repayment rule, RDSP issuers must set aside an “assistance holdback amount” equal to the total grant and bond paid into the RDSP in the preceding 10 years less any grant and bond already repaid in respect of that 10-year period. When one of the events described above occurs, the required repayment is equal to the amount of the assistance holdback amount immediately preceding the event.

A beneficiary with a life expectancy of five years or less will be allowed annual RDSP withdrawals of up to $10,000 in taxable plan savings, as well as a pro-rated amount of plan contributions, without having to repay the grants or bonds paid into the plan in the preceding 10 years. These rules only apply when an election to consider the specified disability savings plan (SDSP) has been filed with the RDSP issuer by the holder of the RDSP and the issuer has notified ESDC of the election.

A rule applies for withdrawals made from an RDSP after 2013. This rule replaces the 10-year repayment rule only for RDSP withdrawals. The former 10-year repayment rule will continue to apply where the RDSP is terminated or deregistered, or the RDSP beneficiary dies.

This rule may change due to legislation. For the most updated information on the 10-year rule, contact the issuer of your RDSP or go to ESDC.

Proportional repayment rule

As of 2014, the proportional repayment rule applies on the event where an amount is withdrawn from the RDSP. The proportional repayment rule will require that, for each $1 withdrawn from an RDSP, $3 of any grants or bonds paid into the plan in the 10 years preceding the withdrawal be repaid, up to a maximum of the assistance holdback amount. Repayments will be attributed to the grants or bonds that make up the assistance holdback amount based on the order in which they were paid into the RDSP.

The proportional repayment rule does not apply for those beneficiaries that have lost DTC approval before the age of 60 and want to close or withdraw amounts from their RDSP. In this case, the 10-year repayment rule will apply and the entire Assistance Holdback Amount will need to be repaid. The proportional repayment rule also does not apply in the case of the death of a beneficiary. In this case, the full Assistance Holdback Amount must be paid back to the government and the remaining amounts held in the plan goes to the estate of the beneficiary.

The proportional repayment rule may be change due to legislation. For the most updated information on how much the repayment will be, contact the issuer of your RDSP or go to the ESDC website.