Registered Disability Savings Plan (RDSP)

A Registered Disability Savings Plan (RDSP) is a tax-sheltered savings plan to help provide for the long term fiinancial security of Canadians who are eligible for the Disability Tax Credit (DTC). (To be eligible, the Canada Revenue Agency (CRA) must approve Form T2201).

Contributions to an RDSP are not tax deductible and can be made until the end of the year in which the beneficiary turns 59. All income earned in the plan, including the Canada Disability Savings Grant and the Canada Disability Savings Bond, grows tax sheltered  in the RDSP; when funds are withdrawn, they are taxed as income by the beneficiary in they calendar year they are paid out of the RDSP.

Who Can Open an RDSP?

A parent or legal guardian can open an RDSP for a qualified child beneficiary and act as the plan holder, authorizing all transactions on the benefciary's behalf until they reach the age of majority. At that time, if they are contractually competent, they can enter into the plan and become the holder of the account and the parent/legal guardian may remain as a joint holder. 

An individual who qualifies for the DTC , meets all eligibility requirements and has reached the age of majority can open their own RDSP.  

Beneficiary Criteria:

  • Canadian Resident who has a Social Insurance Number (SIN)
  • Eligible for the Disability Tax Credit (DTC)
  • Under the age of 60 (RDSPs can be opened in the calendar year a beneficiary turns 59. An RDSP can receive government grant or bond funds only until December 31 of the year in which the beneficiary turns 49) 

Contribution Limits:

The RDSP lifetime contribution limit is $200,000 with no annual contribution limit.