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SECURING THE FINANCIAL FUTURE OF A LOVED ONE
From a very early age, families have long feared for the future well-being of their children with disabilities and they have long been lobbying for a new, easier tool to assist them in planning for their loved ones. The federal government, with Minister Flaherty's leadership, listened and created the RDSP.
The power of the RDSP arises from combining the contributions of individuals and families with those of the federal government and the magic of compunding interest.
A contribution of as little as $1,500 per year for 20 years can trigger as much as $90,000 from the federal governement and create income of $15,000 per year or more. Plug your numbers into the RDSP calculator and see how it will work for your family.
For an experienced and knowledgeable RDSP financial advisor in Montreal please contact ayalac@yaldei.org
RDSP Frequently Asked Questions
What is the Registered Disability Savings Plan (RDSP)?
RDSPs are a new type of registered savings plans that are designed to allow families to save for the financial security of a loved one living with a disability. The plan allows contributed funds to grow tax-free until withdrawal.
Who is eligible for the Registered Disability Savings Plan?
To be eligible for the RDSP, a person must be a Canadian resident who is eligible for the Disability Tax Credit. Alternatively, a parent or legal representative of a Canadian resident who is eligible for the Disability Tax Credit can also open a RDSP.
Who can contribute to a Registered Disability Savings Plan and how much can be contributed?
Anyone can contribute to an RDSP, with no maximum annual contribution restrictions. The Federal Government has, however, placed a lifetime contribution limit on the plans. A total of $200,000 may be contributed into an RDSP over the life of the plan.
Who is eligible to contribute to the RDSP?
There are two available sources of government contributions: (1) the Canadian Disability Savings Grant; and (2) the Canadian Disability Savings Bond. Everyone with an RDSP, regardless of income level, is eligible for the Disability Savings Grant, provided contributions are made to the plan. The contribution amount received from the Government for the Disability Savings Grant is based on annual income. Depending on income level, families may also be eligible for the Disability Savings Bond. Families may receive both the Disability Savings Grant and the Disability Savings Bond.
How much will the Government contribute to my RDSP?
The provisions for the Disability Savings Bond and Disability Savings Grant are based on income and contribution levels. It is the income level of the family that is calculated if the beneficiary is under the age of 18, and the income level of the beneficiary if they are over the age of 18. The maximum contribution a plan can receive from the Government of Canada is $4,500 per year. This is based on receiving $3,500 from the Disability Savings Grant (requires a $1,500 personal contribution) plus $1,000 from the Disability Savings Bond. For families that fall into the highest income level, plans can still receive $1,000 per year from the Government, based on an equal contribution to the plan.
An RDSP calculator available for download helps Canadian families project the estimated future value of an RDSP, and helps to determine how it can enhance the quality of life for a family member with a disability. By answering a few simple questions, the calculator will determine the amount of Grant and Bond a person is eligible for, and the approximate value of future payments.
RDSP Resources
 www.rdsp.com
Human Resources and Social Development Canada
Canada Revenue Agency
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