Additional rules if the RDSP is a primarily government-assisted plan (PGAP) in the year
An RDSP becomes a PGAP in a year when the total of all government grant and bond payments made into any of the beneficiary’s RDSPs in the previous years is more than the total of all private contributions made to any of the beneficiary’s RDSPs in the previous years.
Generally, in a PGAP year, (other than a specified year), the DAPs (including LDAPs) must not exceed the greater of the LDAP formula and 10% of the fair market value (FMV) of the plan assets at the beginning of the year. Certain DAPs made following, and as a consequence of, a transfer of property from another RDSP of the beneficiary do not count toward this limit on DAPs.
If the beneficiary is no longer DTC-eligible and the holder requests the termination of the plan, there is no limit in the amount withdrawn.
In any year where the beneficiary is over the age of 59, the LDAP will not be more than the LDAP formula. In a PGAP year, the combination of LDAPs and DAPs must not exceed the greater of the LDAP formula and 10% of the FMV of the plan assets at the beginning of the year.
When the beneficiary turns 28 years (or any later age up to, and including, the age of 58) during the calendar year, the beneficiary has the right to direct that DAPs be paid to them at any time in that year if, after payment, the FMV of the property in the RDSP is not less than the assistance holdback amount for the RDSP. The DAP that can be paid under these circumstances cannot be more than the calculated allowable amount. With the exception of plans where the beneficiary is over the age of 59, a DAP made in any other year may require that the assistance holdback amount be repaid to Employment and Social Development Canada (ESDC).
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