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Registered Disability Savings Plans

Mar 27, 2019

People with disabilities and their loved ones face a distinct set of financial challenges throughout their lives. To help address these challenges, in 2008 the Government of Canada introduced the Registered Disability Savings Plan (RDSP). Designed to help build long-term financial security for disabled persons, the RDSP helps make it easier to accumulate funds by providing assisted savings and tax-deferred investment growth.

The RDSP is a tax-deferred savings vehicle introduced by the Government of Canada  to help parents and others save for the long-term financial security of a person with  a severe disability.

To assist in saving, the federal government offers Canada Disability Savings Grants (CDSGs) and Canada Disability Savings Bonds (CDSBs).

The RDSP is eligible for CDSGs and CDSBs until December 31 of the year the beneficiary turns 49.

Canada Disability Savings Grants (CDSGs)

CDSGs are matching grants that the Government will deposit into a beneficiary’s RDSP to help accumulate savings.  The Government provides matching grants of up to 300%, depending on the amount contributed and family net income. 

For family net income - up to or equal to $95,259:

300% on first $500

200% on next $1,000

For a maximum of $3,500 annually

For family net income over $95,259

100% on first $1,000

In addition to grants, lower income families also have access to Canada Disability Savings Bonds (CDSBs).  The Government may deposit up to $1,000 a year to the RDSP of a low-income beneficiary, even if no contributions are made into the RDSP.

* 2019 rates.

For a minor beneficiary, the family net income is that of his or her parents. Where the beneficiary is over the age of majority, the family net income is that of the beneficiary and his or her spouse, if applicable. The income threshold is indexed annually to inflation.

Planning for your family member with a disability is important, and you deserve to be confident of the advice you receive.  Contact your financial security advisor today!

Source: Mackenzie RDSP Investor Guide