Cessation of disability or death of a beneficiary

What happens if the beneficiary is no longer eligible for the DTC?

No contributions can be made to the plan unless the contribution is a specified RDSP payment in respect of the beneficiary.

The plan remains open unless the holder request to close the plan. A beneficiary who stops being eligible for the DTC, might, due to the nature of their medical condition, be eligible again for the disability tax credit (DTC) for some later year. Since January 1, 2014, subject to the Election conditions discussed below, an election may be made if the RDSP holder wishes to postpone closing the plan. In these circumstances, contribution room and repaid grants and bonds are not restored.

What happens if the beneficiary dies?

The RDSP must be closed and all amounts remaining in the plan must be paid out to the beneficiary's estate by December 31st of the year following the calendar year in which the beneficiary dies. Any funds remaining in the RDSP, after any required repayment of government grants and bonds, will be paid to the estate. If a DAP had been made and the beneficiary is deceased, the taxable portion of the DAP must be included in the income of the beneficiary's estate in the tax year in which the payment is made.

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