Registered Disability Savings Plan Solutions

After first being announced in the 2007 federal budget the RDSP has been described as the most important development in 25 years for families with a disabled child. It is estimated that approximately 400,000 Canadian families will be eligible for the plan. Like RESPs the plan will allow funds to be invested tax-free until withdrawn and is available to any individual that is under age 60 and eligible for the Disability Tax Credit. Contributions are limited to a life time limit of $200,000 and there is no annual limit.

Contributions to an RDSP may qualify for payments from the Canada Disability Savings Grant (CDSG), up to a lifetime maximum of $70,000 per beneficiary. The grant is available to beneficiaries under age 50 and is income tested to a maximum of $3,500/year. When annual net income is $21,287 or less, the Canada Disability Savings Bond will provide $1,000 per year without any contribution. The Bond can provide for up to $20,000 until the year the beneficiary turns 50. Canada Disability Savings Bond payments are prorated for families with higher incomes. This applies to net incomes greater than $21,287, but less than $37,885.