One of my favourite topics to write about is the Registered Disability Savings Plan (RDSP) offered to parents of mentally or physically disabled children to help start saving for their children’s future. The RDSP is important to me because I have a son diagnosed as being on the Autism Spectrum, but I also know many families that need help, and if anything I write here helps them, I will be thrilled.
This is the Real RDSP page you should check out as well. What follows here are some of the posts that I have written about this program and other articles from other authors on Tax Issues and different ways to save for your loved ones’ future.
As a note to those who know, no one knows how the system works. I have met the Zen Master for the RDSP. He works for the Government (at ESDC who runs the program), but he talks in the Ottawa area to help folks understand the RDSP program. He has said I could ask him questions, too!
Note: This page was getting a bit large and unruly, so I am breaking things down into subpages for now.
Your Journey To an RDSP
RDSP : Laying the Ground Work (first things first)
What needs to be done BEFORE you can apply for a Registered Disability Savings Plan? A significant aspect of this is the Disability Tax Credit (DTC). Make sure you click on this page to get started.
Click Here to see RDSP: Laying the Ground Work.
RDSP : Working with The Account
Now that you have succeeded in getting your Disability Tax Credit (DTC), you need to open an RDSP account with a bank or such, but how is that done? It is not as easy as you might think. This page outlines many of the issues that have arisen for my family working with an RDSP account.
Click here to see RSDP: Working with the RDSP Account
Disability Tax Related Topics
Thanks to my RDSP and DTC work, I learned a great deal about the tax implications of having a disabled child.
Click here to see Disability Tax-Related Topics
Autism Specific Articles
Being the proud father of a child on the Autism Spectrum, I also ended up writing a great deal about Autism specific things.
Click here to see Autism Specific Articles.
RDSP Frequently Asked Questions
Matching grants are paid into the RDSP on contributions made up to, and including December 31 of the year, the beneficiary turns 49 years of age. (see this link for details).
No, they are not. They are after-tax funds. Growth, Bonds and Grants will be taxed on withdrawal from RDSP.
Yes, any time you wish. However, severe penalties must be paid if the withdrawal is before the beneficiary turns 60 unless this is an SDSP.
An RDSP is a trust arrangement between a holder and a trust company in Canada. (see here for more details)
Is there any way to set up an RDSP with two different primary caregivers reflected (for different periods of life)? Our children were adopted from foster care and their diagnoses are retroactive to their time in care. They should get max grants from their time in care but we cannot find any financial institution that will set up an RDSP that reflects their caregiving situation.
Sounds like a very good question for the ESD. Most of the financial institutions that offer a usable RDSP program aren’t really too keen on going the extra mile in these situations.
Hi,
Is there a follow up to the idea of waiting until your child is 19 to maximize grants? My family just crossed over the income threshold and our grant will reduce to $1000 this year and my daughter is 13.
I can’t find anything explicit to say that she won’t be eligible for the maximum of $70,000 grants, so I am interpreting this to mean that she will again be eligible for $3500 grants and maybe the $1000 a year when her income is the reference. Which leads me to continue the contribution and benefit from the growth if we are not losing out on total grant.
TL:DR; Deposit in RDSP no matter what the grant levels are.
I have seen some folks theorize that you should wait until 19 to maximize the grant level, but as you pointed out given the grants have a maximum, I just kept depositing in, even when it was only a $1000 grant. My view is the $1000 has longer to build as an investment. My statement that the RDSP is a VERY long term savings plan fits this plan too. Hope that helps.