Registered Disability Savings Plans are created to help people with a disability to save money for the future. Any person eligible for the disability tax credit can open an RDSP. Contributions are not tax deductible but will be matched by the government at 300%, 200% or 100% depending on the family income of the disabled party until December 31 of the year they turn 18. After that the government grants are based on the individual’s own income until age 49. The beneficiary can receive a maximum 1 year grant of $3,500 and a lifetime maximum of $70,000 in grants. There may be an additional savings bond component of $1,000 a year for those of low income.
This is truly a powerful savings tool for those who need it.
These plans are not easy to understand, CRA’s guide is 55 pages long and not an easy read. As outlined above they are well worth the effort to setup and depending on when disability was first granted you may be able to claim for past years after 2007 making the setup all the more worthwhile.
