How does it work?
For the first $500 contributed into the RDSP the beneficiary will receive $3 for $1 contributed. For the next $1,000 the beneficiary will receive $2 for every $1 contributed.
- If family income is less than $46,065 the RDSP is eligible for a Canada Savings Bond as well
- The maximum grant received for any one year is $3,500. Lifetime maximum grant is $70,000
- Anyone can make a contribution to the RDSP, with written consent from the account holder.
- Assets within the RDSP grow tax-free
- Contrary to popular belief, the RDSP program does not affect an individual's eligibility for other income-based supplement programs such as Guaranteed Income Supplement, OAS or GST credits
How do you qualify?
You have to be under the age of 60 and are eligible or currently receiving the Disability Tax Credit. If you believe you or a loved on may qualify, you simply need your family doctor to complete the Disability Tax Certificate application form, and submit to the government for approval. Parents and Guardians are able to open an RDSP for their child, spouse etc. If the person claiming the disability tax credit it unable to.
What else do you need to know?
From birth to December 31 of the year the beneficiary becomes 18 years of age, 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 becomes 19 years of age until the RDSP is closed, the beneficiary's adjusted family net income is based on their income plus their spouses or common-law partners income if relevant.
Contributions are eligible for grant funds until the end of the year the beneficiary is 49. Similar to an RESP, contributions that are withdrawn are not included as income to the beneficiary. The catch is, the Canada Savings Grant money, and growth/investment income earned in the RDSP is taxable income to the beneficiary. You can only have 1 RDSP plan per individual.
Benefits:
- Anyone can contribute to an RDSP.
- Every $1 is matched up to $3 from the government (if family income is less than $87,123).
- Low income individuals may be eligible for an additional $1,000 a year for 20 years.
- Exempt from most provincial disability and income assistance benefits.
- No restrictions on how RDSP withdrawals are spent.
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