Registered Disability Savings Plan (RDSP) - Overview

A Registered Disability Savings Plan (RDSP) is a registered long-term savings plan to help Canadians with severe and prolonged disabilities and their families save for the future. The plan allows earnings on contributions to grow tax-free while in the plan and is a trust arrangement between a holder and a trust company in Canada.

The RDSP contract includes terms and conditions that the holder must agree to, for the continued registration and operation of the plan, such as:

  • contribution eligibility and limit;
  • minimum withdrawal requirements and maximum withdrawal limits;
  • conditions for requesting elections in the RDSP; and
  • holder eligibility.
The RDSP contract may include terms that determine:

 

  • whether contributions will be intermittent or on a regular basis (at the discretion of the holder);
  • fees;
  • investment options; and
  • whether a Disability Assistance Payment (DAP), which is not a Lifetime Disability Assistance Payment (LDAP) is allowed.
The main parties involved in establishing an RDSP are:
Holder: The person or organization that opens and manages the RDSP and makes or authorizes contributions to the RDSP. The holder does not need to be a resident of Canada.
Beneficiary: The individual who receives money from the plan in the future. The beneficiary must be a resident of Canada at the time the RDSP is opened and meet other RDSP eligibility conditions.
Canada Revenue Agency (CRA): Verifies eligibility for the beneficiary’s Disability Tax Certificate (DTC) and beneficiary’s residency.
Employment and Social Development Canada (ESDC):
  •  Administers the Canada Disability Savings Grant (CDSG) and the Canada Disability Savings Bond (CDSB) programs.
  • Verifies the beneficiary’s social insurance number (SIN) and the holder’s SIN or business number.
An RDSP must be opened to receive payments of the Canada Disability Savings Grant (CDSG) and/or Canada Disability Savings Bond (CDSB).