What is an RDSP?
Written by: Delia Terpstra | Wealth Management Advisor | Strathroy Admin
An RDSP is a Registered Disability Savings Plan that is intended to help parents, guardians and qualifying participants save money for the welfare and financial well-being of someone with a disability.
How does it work?
An RDSP is a tax-deferred savings vehicle that allows the holder to invest up to $200,000 over the lifetime of the plan. The federal government will match anywhere from 100%- 300% of your investment depending on the investor’s household income, or the income of the beneficiary if they are over 18 to a maximum yearly amount.
Simply opening an RDSP can help to qualify you for $1000 annually paid to your RDSP, depending on your income.
Who can open an RDSP?
To open and RDSP you must qualify for the disability tax credit (DTC).
Other requirements for eligibility include;
- Canadian resident at the time the RDSP is open
- Under the age of 60 (unless transferring from another RDSP)
Am I eligible to receive grants?
In order to be eligible to receive government grants you must meet the following criteria;
- You must be under the age of 49
- You must be a resident of Canada
- You must have a social insurance number
- You must be eligible for the Disability Tax Credit (DTC)
- Up-to-date filing of your tax return. If under the age of 18, parents or guardians must file their income tax returns for the past 2 years and future years
How will an RDSP affect my Ontario Disability Support Program?
At this time the RDSP payments do not affect your eligibility or the amount of money you receive for income support from ODSP.
See website regarding this: Financial eligibility: Treatment of income (gov.on.ca)
How much grant money in available?
The maximum grant you can receive through Canadian Disabilities Service Grant (CDSG) is $70,000 up until the end of the year the beneficiary turns 49.
The maximum Canada Disability Savings Bond (CDSB) you can receive is $20,000.
For more RDSP information visit this website: https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/registered-disability-savings-plan-rdsp/canada-disability-savings-grant-canada-disability-savings-bond.html
How can I set up an RDSP?
To set up a RDSP, you can book an appointment with one of our knowledgeable Credential Asset Management Inc. Wealth Management Advisors at Mainstreet here.
Mutual funds are offered through Credential Asset Management Inc. The information contained in this article was obtained from sources believed to be reliable; however, we cannot guarantee that it is accurate or complete. This material is for informational and educational purposes and it is not intended to provide specific advice including, without limitation, investment, financial, tax or similar matters.