A few quick facts about Registered Disability Savings Plans:

Registered Disability Savings Plans
These are savings programs that parents and individuals can set up for adults and children that are similar to Registered Education Savings Plans – the biggest benefit is that the income grows inside the plan and is taxed to the beneficiary only when it comes out (the capital is neither deductible to anyone nor taxable on withdrawal).

Canada Disability Savings Grant
This is a grant available on a sliding scale depending on the family’s or individual’s net income to either match or better the contributions to the plan. It can be as high as $ 3,500 for twenty years.

Canada Disability Savings Bond
The government will pay up to $ 1,000 per year, up to a total of $ 20,000 for families with net incomes of less than $ 37,885. There is no requirement to make contributions to be eligible for the bond. All the families have to do is set up an RDSP and fill out an application for the bond. For an individual over 18, only his or her net income is considered as family income. For those under 18, the parents’ combined net income is family income.

Eligibility
To be eligible for the grant or bond, the beneficiary of the plan must be under 49 years of age. To set up an RDSP, the beneficiary must be eligible for the disability amount – this means that Form T2201- Disability Tax Credit Certificate- must have been certified by a qualified practitioner and submitted to and approved by Canada Revenue Agency.

Deadline for 2008 Grant and Bond
The deadline has been extended to March 2, 2009. Because of the 49 year age cap and 20 year maximum, those eligible individuals who are now 29 or over should make a special effort to set up a plan as soon as possible to avoid losing a year of eligibility.

Where to Get Them
The Bank of Montreal and Royal Bank are the only financial institutions we contacted that have Registered Disability Savings Plans available.

Withdrawals
The plans are intended to be long term savings plans. Anybody considering setting one up should ensure they understand that the grants and bonds may be required to be repaid if they are withdrawn within ten years of the last grant or bond received.

Who to contact for more information:

Click here for full PDF document on RDSP
http://www.carp.ca/pdf/RDSP’s.pdf

Human Resources and Skills development website:

http://www.hrsdc.gc.ca/eng/disability_issues/disability_savings/index.shtml

Bank of Montreal website: (or call 1-800-665-7700)
http://www4.bmo.com/investments/0,4629,35649_62330610,00.html

Royal Bank – Call any branch to make an appointment – they will start taking applications February 16. (or call 1-800-463-3863)

Canada Revenue Agency for information on Disability Savings Plans: http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/rdsp-reei/menu-eng.html

Canada Revenue Agency for Form T2201 Disability Tax Credit Certificate: http://www.cra-arc.gc.ca/E/pbg/tf/t2201/t2201-08e.pdf
Your financial or tax advisor