Registered Disability Savings Plan (RDSP)
The RDSP is a powerful savings tool designed to provide long-term financial security for people living with disabilities — with government grants and bonds that can reach tens of thousands of dollars.
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What is an RDSP?
The Registered Disability Savings Plan (RDSP) is a savings account specifically designed for people with disabilities who are eligible for the Disability Tax Credit (DTC). It offers tax advantages and access to government grants and bonds to help build long-term financial security.
Living with a disability can lead to significant additional costs—medical care, mobility aids, home modifications, and support services. The RDSP is a proactive way to save for these future needs, with significant support from the federal government.
Free money
Government grants and bonds that can total up to $90,000 over a lifetime
Protected growth
Investments grow tax-free as long as they remain within the scheme
Open to everyone
Anyone can contribute — parents, family, friends, or the recipient
Eligibility for the RESP
To open an RDSP, the beneficiary must meet three criteria: be eligible for the Disability Tax Credit (DTC), be a Canadian resident with a valid social insurance number, and be under 59 years of age at the time of opening the account.
The RESP is established in the name of the beneficiary, but a plan holder (often a parent or legal guardian) can open and manage the account on their behalf.
Government subsidies and bonds
Canada Disability Savings Grant (CDSG): The federal government provides a matching grant of up to 300% of annual contributions, to a maximum of $3,500 per year. The matching rate depends on family income and the amount contributed. The lifetime limit for these grants is $70,000.
Canadian Disability Savings Bond (CDSB): For low- and middle-income families, the government contributes up to $1,000 per year directly into the RDSP — with no contributions required from the beneficiary or their family. The lifetime limit for the bonds is $20,000.
Tips
Unused grant and bond entitlements can be carried forward for up to 10 years. Even if you open an RDSP later, you can still access eligible amounts from previous years—one more reason to act quickly.
Contributions
There is no annual limit on contributions — the only limit is the lifetime contribution limit of $200,000. Anyone can contribute to the RDSP: the beneficiary, their parents, family, friends, or any charitable organization.
Contributions are not tax-deductible (like a TFSA), but they trigger government grants, making them extremely advantageous. It is possible to contribute until the end of the year the beneficiary turns 59.
Withdrawals
Withdrawals from an RDSP are called "disability assistance payments" (DAPs). The original contributions are not taxed upon withdrawal, but any grants, bonds, and accumulated gains are taxable for the beneficiary.
Lifetime disability payments (LDPs) must begin no later than December 31 of the year the beneficiary turns 60. The "10-year rule" must also be observed: any withdrawal made within 10 years of the last contribution or grant received may result in the repayment of grants and bonds to the government.
10-year rule
If you withdraw funds within 10 years of receiving your last grant or voucher, you will have to repay $3 in grants/vouchers for every dollar withdrawn. That's why it's important to plan withdrawals carefully and consult an advisor.
Types of investments
Investment options for an RDSP are similar to those for other registered accounts: mutual funds, segregated funds, stocks, bonds, GICs, and other financial instruments. The choice depends on the investment horizon, risk tolerance, and objectives of the beneficiary.
Transfers upon death
Since 2014, it has been possible to transfer, tax-free, the proceeds of a deceased parent's or grandparent's RRSP or RRIF to a financially dependent child or grandchild's RDSP. This transfer does not count toward the $200,000 contribution limit, but it is not eligible for government grants.
Everything you need to know about the RDSP
An RDSP is a registered savings account specifically designed to help people eligible for the Disability Tax Credit (DTC) save for their long-term financial security.
Any person eligible for the Disability Tax Credit (DTC), who is a Canadian resident and has a valid Social Insurance Number (SIN), can benefit from an RDSP. The account must be opened before the end of the year in which the beneficiary turns 59.
There is no annual limit. The lifetime contribution limit is $200,000. Contributions can be made until the end of the year the beneficiary turns 59.
The government provides a matching grant of 100% to 300% depending on family income, up to a maximum of $3,500 per year and $70,000 for life.
The Canada Child Benefit (CCB) is an amount paid directly by the government (up to $1,000/year, $20,000 lifetime) for low- and middle-income families — with no contribution required.
Disability assistance payments (DAPs) can be made at any time, but lifetime payments (LLPs) must begin no later than age 60. Be aware of the 10-year rule, which may result in the repayment of benefits.
Original contributions are not taxed upon withdrawal. Grants, bonds, and accumulated earnings are taxable for the beneficiary upon withdrawal.
No, assets in an RDSP and withdrawals generally do not affect eligibility for provincial or federal income-based social assistance benefits.
Yes, the RDSP is a separate plan. You can hold an RDSP in addition to a TFSA, RRSP, RESP, or any other registered account.
The RDSP can remain open, but any grants and bonds received in the last 10 years will need to be repaid. It is essential to consult an advisor to understand the implications.
Yes, the proceeds of a deceased parent's or grandparent's RRSP or RRIF can be transferred tax-free to the RDSP of a financially dependent child or grandchild.
The RDSP must be closed before the end of the year following the death. Grants and bonds received in the last 10 years are repaid to the government, and the remaining balance is paid to the estate.
The options include mutual funds, segregated funds, stocks, bonds, GICs and other eligible financial instruments — similar to other registered accounts.
Maximize your RESP grants
The Registered Disability Savings Plan (RDSP) is one of the most advantageous plans in Canada thanks to government grants and bonds. Our advisors can help you open an RDSP and get the most out of it.
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