Planning for the future when having limited earning capabilities can be difficult and a cause of concern for those affected. The Canadian Government introduced a program in 2008 to help those individuals that qualify for the Disability Tax Credit. The Registered Disability Savings Plan is a tax deferred savings vehicle that assists in planning for the long-term financial security of family members with a disability.
The Canada Disability Savings Grant and Bond
- Contributions to the RDSP can be eligible for matching through the Disability Savings Grant.
- For example, a $1500 contribution will be matched with $3500 contribution for a total contribution of $5000 (for “low income” individuals).
- Individuals with higher income levels are still eligible for 1 to 1 matching.
- For example, $1500 will be matched with $1500 for a total contribution of $3000.
- The maximum eligibility for the grant is $3500 per year and the lifetime limit is $70,000.
For those individuals earning less then $26,364 (2016) are entitled to $1000 a year contribution to RDSP without making any contributions of their own. The lifetime limit is $20,000 and the bond is not eligible for matching.
- Beneficiary must be DTC eligible
- Beneficiary must be resident in Canada
- Beneficiary must be under the age of 60
- Get approved for Disability Tax Credit (See previous post on how)
- Register an RDSP with your financial institution (You will need proof that your eligible for the DTC in the form of a Notice of Determination from the CRA)
- Start Contributing through your financial institution
There are many complex aspects of the RDSP so do not consider this post to be a complete source of information. Contact us for further details.