(EN)
A Registered Disability Savings Plan (RDSP) combines flexibility, tax-deferred investment growth and direct government assistance to help you reach your savings goals.
An RDSP beneficiary must have a valid Social Insurance Number (SIN) and be:
- Eligible for the Disability Tax Credit (DTC)—for details on the DTC, visit the Canada Revenue Agency (CRA)
- A Canadian resident when the plan is set up and when each contribution is made
- Under age 60 when the plan is opened, since contributions cannot be accepted after the end of the year the beneficiary turns 59
A beneficiary can only have one RDSP at a given time.
You can open an RDSP and be the plan holder if you are:
- A person with a disability who is the age of majority and has the capacity to manage his or her finances; or
- The legal parent of a child with a disability who has not reached the age of majority; or
- A guardian or other representative who is legally authorized to act on behalf of a person with a disability
When a plan is opened by a beneficiary’s legal parent, the parent may continue to be the plan holder after the beneficiary reaches the age of majority.
The plan holder does not have to be a Canadian resident.
There’s no limit to how much can be contributed in a year, but there is a lifetime limit of $200,000 for total contributions. In addition:
- Contributions are eligible for the Canada Disability Savings Grant (CDSG) until age 49.
- Contributions are not tax deductible, although investment growth is tax-deferred
- Anyone can contribute as a gift for the beneficiary with written consent from the plan holder
There are two types of government benefits available to help support an RDSP beneficiary—the Canada Disability Savings Grant (CDSG) and the Canada Disability Savings Bond (CDSB) for low-income families. See RDSP Grants and Bonds.
RDSP withdrawals, called Disability Assistance Payments (DAPs), can be made to the beneficiary at any time and for any purpose. However, the beneficiary must start receiving regular payments, called Lifetime Disability Assistance Payments (LDAPs) by the end of the year they turn 60. Once LDAPs start, they will continue for the life of the beneficiary.
If the plan holds money from the CDSG or CDSB, there are other rules that can impact withdrawals:
- For each $1 withdrawn, $3 of any CDSG or CDSB paid into the plan in the 10 years prior to the withdrawal must be repaid, up to a specified maximum.
- If the majority of the funds in the RDSP are from the CDSG or CDSB, then there are limits on what can be withdrawn in a year.
The information above is a summary only; for details, please visit the CRA website.
RDSP payments do not affect eligibility for Federal Government benefits such as the Goods and Services Tax/Harmonized Sales Tax (GST/HST) credit and the Canada Child Benefit. However, support payments or means-tested disability pensions received from the province where the beneficiary resides may be reduced or eliminated.
Withdrawals include a blend of taxable and non-taxable amounts. Contributions are not included as taxable income when paid out of an RDSP. However, investment income and capital gains plus any CDSG and CDSB amounts in the plan are included in the beneficiary’s income for tax purposes when paid out of the RDSP. Withdrawals after a specified threshold are subject to withholding tax at source.
An RBC RDSP can hold a variety of investments, including Guaranteed Investment Certificates (GICs), mutual funds, portfolio solutions and savings deposits.
Looking for something else?See our FAQs.
View Legal DisclaimersHide Legal Disclaimers