Withdraw money from your plan
On this page
- When you withdraw money may impact the amount in your plan
- Types of withdrawals from your plan
- Withdrawing from your plan may impact provincial benefits
- Alternative – Watch a video on this topic
Withdrawing money may impact the amount of grants and bonds in your plan
The RDSP is a long-term savings plan. The purpose of this plan is to support people with disabilities to have savings as they age.
Regular withdrawals from a plan must begin by December 31 of the year you turn 60.
In some cases, you may want to withdraw savings sooner. In this case, you may need to pay back some grant and bond amounts when you make a withdrawal.
You do not need to repay grants and bonds when you make a withdrawal if:
You turned 60
By December 31 of the year the beneficiary turns 60, withdrawals from the plan must begin. To start these withdrawals, you should discuss them with your financial organization.
None of the grants and bonds paid into the plan are subject to repayment in the event of plan closure, the beneficiary’s death, or a withdrawal.
The last time you received a grant or bond in your account was more than 10 years ago
In most cases, you should be able to withdraw money without having to repay. You must discuss this with your financial organization.
You have a reduced life expectancy of 5 years or less
The government offers flexibility to people with a life expectancy of 5 years or less when making withdrawals from their plan.
If this situation applies to you, you must provide medical attestation to your financial organization to begin the withdrawal process.
Beneficiaries with a life expectancy of 5 years or less can withdraw up to $10,000 per year subject to certain conditions. This amount includes grants, bonds, contributions, and interest earned on investments.
When a beneficiary dies, grant and bond amounts deposited into their plan within the last 10 years before their death must be repaid.
Contact your financial organization to discuss this further.
You will need to repay grants and bonds when you make a withdrawal if:
You have received grants and bonds in the last 10 years
You will need to pay back all or a portion of the grant and bond amount received in the last 10 years. The amount you have to pay back depends on how much you withdraw from your account.
The amount you need to pay back is $3 of grant and/or bond for every $1 withdrawn, up to the total amount of grant and bond paid in the last 10 years.
You are not DTC approved and are under the age of 60
The amount you have to repay when you make a withdrawal is determined based on your age and when you lost DTC approval. To determine exactly how much you may have to repay when you make a withdrawal, please discuss this with your financial organization.
49 years of age or younger by the end of the calendar year
If you have not been DTC approved for a single year
The grants and bonds paid in the 10 years before January 1st of the year of the withdrawal are subject to repayment.
If you have not been DTC approved for consecutive years.
The grants and bonds paid in the 10 years before January 1st of the first year you lost DTC approval are subject to repayment.
Between 50 and 59 years of age by the end of the calendar year
If you have not been DTC approved since before the year you turned 50
The grants and bonds paid in the 10 years before January 1 of the first year you lost DTC approval are subject to repayment. For each year that the beneficiary is over the age of 50, this 10-year period decreases by a year.
For example, in the year the beneficiary turns 51, the grants and bonds paid into the plan in the 9 years before they lost DTC approval are subject to repayment.
If you lost DTC approval in or after the year you turned 50
The grants and bonds paid in the 10 years before January 1 of the year of the withdrawal are subject to repayment.
In each of these instances, the amount you have to pay back depends on how much you withdraw from your account.
The amount you need to pay back is $3 of grant and/or bond for every $1 withdrawn, up to the total amount of grant and bond paid in the periods as described above.
The same periods are used to determine how much grant and bond are subject to repayment in the event of plan closure or the beneficiary’s death while they are not DTC approved. In these cases, all grants and bonds paid in the periods described above are repaid to the government.
Types of withdrawals from your plan
You can request that withdrawals be made from your plan at any time if your financial organization allows single payments. If you make a withdrawal and have received a grant or bond within the last 10 years, you will have to repay some or all of that grant and bond. Recurring payments must begin by the end of the calendar year that the beneficiary turns 60 and must continue at least annually until no funds remain or the beneficiary dies.
You must contact your financial organization to determine how much you can withdraw and to start receiving payments.
There are 2 types of withdrawals
Recurring withdrawals
A lifetime disability assistance payment (LDAP) is a recurring payment paid directly to the beneficiary.
LDAP payments must begin by the end of the calendar year that the beneficiary turns 60.
If you would like to begin LDAP payments, please contact your financial organization. You may make this request with your financial organization before you turn 60. You will have to repay a portion of the grants and bonds if they were deposited in your plan less than 10 years ago.
If you don’t contact your financial organization, they will contact you to let you know that payments must begin.
Once your payments begin, the beneficiary will continue to receive them until either:
- the beneficiary dies, or
- the money in the plan runs out
When one of these situations occurs, the plan is closed.
Single withdrawal
A disability assistance payment (DAP) is a single payment requested by the holder that is paid directly to the beneficiary or their estate. A request must be made for every DAP payment. You must contact your financial organization to request a DAP.
Note: Each financial organization has different rules around DAPs. Please contact your financial organization to discuss DAP options.
What is included in each payment
Payments include a proportion of each of the following amounts available for payment:
- contributions (including rollovers, if applicable)
- grant amounts
- bond amounts
- interest earned on investments
Note: Only grant and bond amounts paid into a plan longer than 10 years ago will be included in payments.
Only a portion of a withdrawal will be taxed by the CRA
RDSPs are tax-sheltered which means you do not pay tax on the money in the plan until it is withdrawn.
When you withdraw money from your plan, certain portions of the withdrawal will be taxed:
- Taxable amounts
- Grants, bonds, and interest earned on investments will be taxed.
- Non-taxable amounts
- Your original contributions won't be taxed.
Withdrawing from your plan may impact provincial benefits
In all provinces and territories, opening and contributing to a plan will not affect your other federal or provincial/territorial benefits, such as monthly disability income support payments or monthly pension payments. If you are in one of these provinces, making withdrawals from a plan may impact the amount of provincial benefits you receive:
- Quebec
- New Brunswick
- Prince Edward Island
You should contact your provincial government to know how your other benefits may be impacted.
Alternative – Watch videos on this topic
Taking money out (video)
An RDSP is a long-term savings plan which has specific conditions about taking money out. This video explains who can withdraw funds and when they can be withdrawn. It also tells you what happens when there are changes regarding a beneficiary.
Transcript
Dan: The Registered Disability Savings Plan, the RDSP, is a long-term savings plan created by the federal government that helps Canadians with disabilities…
Jessie: … and their families…
Dan: … to prepare for the future.
Here are a few things to remember when it’s time to start taking money out of an RDSP.
Only the person who manages the RDSP is allowed to take money out of the plan.
Jessie: And all withdrawals must be used only for the beneficiary—the person eligible to receive money from the plan.
Dan: You can take money out at any time, but you can’t wait indefinitely. Withdrawals must begin before December 31…
Jessie: … of the year that the beneficiary turns 60.
Dan: Remember: the plan is for long-term savings. If you take money out when any of the grants and the bonds have been in for less than 10 years, you will have to pay some, or all, of the grant and the bond money back to the Government.
For instance, all grants and bonds that have been in the plan for less than 10 years must be paid back to the Government if:
- the plan is closed, or
- the beneficiary dies
Jessie: To learn more about the Registered Disability Savings Plan, watch the full series of RDSP online videos.
Dan: For detailed information, such as a list of participating financial institutions or eligibility criteria, visit www.esdc.gc.ca/disabilitysavings.
Jessie: Or call 1 800 O-Canada, that’s 1-800-622-6232.
Dan: If you use a teletypewriter, call 1-800-926-9105.
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