The Registered Disability Savings Plan
The Registered Disability Savings Plan (RDSP), is a unique savings program that allows savings to grow in a tax-deferred environment and provides matching federal contributions of up to 300% annually. Canada is the first country in the world to have a RDSP, which helps those living with a disability and their families save for the future. An estimated 50,000 people across Canada will benefit from this initiative, and future impacts of the RDSP go well beyond a simple planning tool.
Although the RDSP is the most powerful financial tool for Canadians with disabilities and their families to secure stability for the future, the biggest challenge has been getting the information about to RDSP to the families that need it the most; it is Ascend Financial’s goal to inform families with disabilities about the RDSP in order to help create a good life and a strong financial future.
The Registered Disability Savings Plan (RDSP) is a long-term savings plan to help Canadians with disabilities and their families save for the future.
Contributions to RDSPs may be supplemented by a Canada Disability Savings Grant and a Canada Disability Savings Bond.
The beneficiary of the RDSP is the person who will receive the money in the future.
The RDSP is delivered by: Canada Revenue Agency (CRA)
The Grant and Bond are delivered by: Employment and Social Development Canada (ESDC)
Any person who:
•is eligible for the Disability Tax Credit (disability amount);
•is a Canadian resident;
•is under 60 years of age (if 59, the individual must apply before the end of the calendar year in which he/she turns 59); and
•has a social insurance number.
If the person is a minor, their parent or legal representative may establish the RDSP for their benefit.
The lifetime contribution limit for an RDSP is $200,000, with no annual limit. Anyone can contribute to the RDSP with the written permission of the plan holder.
Contributions are not tax-deductible and are not included in income when paid out of an RDSP.
Investment income earned in the plan accumulates tax-free. However, grants, bonds, and investment income earned in the plan are included in the beneficiary's income for tax purposes when paid out of the RDSP.