Registered Disability Savings Plan

Key Features of RDSPs

A Registered Disability Savings Plan (RDSP) is a means of supporting those who are disabled and in receipt of Disability Tax Credit to save for the future.  Here are some important things to know about these savings plans:

  • The person who is registered as disabled and who will benefit from the savings in the future is known as the beneficiary.
  • The person who opens and manages the plan on an ongoing basis is known as the plan holder. The beneficiary and plan holder can be the same or different people.
  • Payments can be made into the RDSP until the beneficiary is 59 years of age.
  • Holding an RDSP does not mean that a beneficiary is no longer eligible to receive disability benefits.
  • There is a lifetime contribution ceiling of $200,000 into the plan but there isn’t an annual cap on the value of contributions.
  • While there is no tax due on the investment earnings as long as they remain in the plan and are not withdrawn, the contributions are not tax deductible.
  • There are a couple of federal programs i.e.: the Canada Disability Savings Grant and the Canada Disability Savings Bond, in which the beneficiary may be eligible to receive significant government contributions into the RDSP.
  • Regular payments must be taken from the plan by the time the beneficiary reaches the age of 60.
  • The savings held within the plan can be invested in a variety of different ways, depending on which institution the account is held at.

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