InfoCapsule 1: Overview of a Registered Disability Savings Plan

Disclaimer: RDSP issuers

The information contained on this page is technical in nature. The target audience are issuers of the:

• Registered Disability Savings Plan (RDSP)
• Canada Disability Savings Grant (CDSG)
• Canada Disability Savings Bond (CDSB)

For general information, visit the RDSP page.

On this page

• List of acronyms
• Income matching rate definitions
• Preface
• Opening an RDSP
• Contributions
• Canada Disability Savings Grant
• Canada Disability Savings Bond

Alternate format

A PDF version of the InfoCapsules for RDSP providers is available on the index page.

List of acronyms

CDSA

Canada Disability Savings Act

CDSB

Canada Disability Savings Bond

CDSG

Canada Disability Savings Grant

CRA

Canada Revenue Agency

DTC

Disability Tax Credit

RDSP

Registered Disability Savings Plan

SIN

Social Insurance Number

Income matching rate definitions

Phase out income

The income level above which the annual amount of Canada Disability Savings Bond payable begins to decrease.

First threshold

The income level that, when reached or exceeded, the annual amount of Canada Disability Savings Bond payable is nil.

Second threshold

The income level that, when below or equal to, the matching grant will be:

• 300% of the first $500 in contributions
• 200% of the next $1,000 in contributions

 When the income is above this level, the matching grant will be 100% of the first $1,000 in contributions.

Preface

Registered Disability Savings Plans (RDSP) were introduced in 2008 and are long-term savings plans intended to help persons with severe and prolonged disabilities save for the future. To help savings grow, the Government of Canada will deposit the Canada Disability Savings Grant (CDSG) and the Canada Disability Savings Bond (CDSB) into the RDSP of eligible beneficiaries.

Opening an RDSP

To open an RDSP, the beneficiary must:

• be a resident of Canada
• have a valid Social Insurance Number (SIN)
• be approved for the Disability Tax Credit (DTC)

The opening of an RDSP can be done up until December 31 of the calendar year in which the beneficiary turns 59 years old.

Contributions

To make contributions to the RDSP, the beneficiary must:

• be a resident of Canada
• have a valid SIN
• be approved for the DTC

Contributions can be made to the RDSP until December 31 of the calendar year in which the beneficiary turns 59 years old.

Canada Disability Savings Grant

To receive the CDSG, the beneficiary must:

• be a resident of Canada
• have a valid SIN
• be approved for the DTC

The CDSG may be paid to the RDSP until December 31 of the calendar year in which the beneficiary turns 49 years old.

The CDSG is based on the family income and the contribution amounts made to the plan in a calendar year.

• If the family income is less than or equal to the amount of the second threshold as defined in the Canada Disability Savings Act (CDSA) and published annually in the RDSP income rates - InfoBulletins^{Footnote 1}, or a Children’s Special Allowance payment has been made in respect of the beneficiary:
  • 300% matching rate is paid on the first $500 or less of annual contributions made to the RDSP, and
  • 200% matching rate is paid on the next $1,000
• If the family income is greater than the amount of the second threshold as defined in the CDSA and published annually in the RDSP income rates - InfoBulletins^{Footnote 1}:
  • 100% matching rate is paid on the first $1,000 or less of annual contributions made to the RDSP

Canada Disability Savings Bond

To receive the CDSB, the beneficiary must:

• be a resident of Canada
• have a valid SIN
• be approved for the DTC

The CDSB may be paid until December 31 of the calendar year in which the beneficiary turns 49 years old.

The CDSB is based on the family income.

A contribution is not required to receive the CDSB if:

• the family income is less than or equal to the phase out income as defined in the CDSA and published annually in the RDSP income rates - InfoBulletins^{Footnote 1}, or a Children’s Special Allowance payment has been made in respect of the beneficiary:
  • $1,000 in CDSB will be paid to the RDSP
• the family income is greater than the phase out income as defined in the CDSA and published annually in the RDSP income rates - InfoBulletins^{Footnote 1}:
  • the amount of CDSB paid to the RDSP will be the result of the formula found at 7(4) of the CDSA
• the family income is greater or equal to the amount of the first threshold as defined in the CDSA and published annually in RDSP income rates - InfoBulletins^{Footnote 1}:
  • the CDSB will not be paid