The Registered Disability Savings Plan (RDSP) is a savings plan that is intended to help persons with disabilities, family members and others save for the long-term financial security of a person who is eligible for the Disability Tax Credit. For those taking advantage of the plan, the Canadian government will provide yearly financial support in the form of matching grants up to $3,500 per year and bonds up to $1,000 per year.
Who can become a beneficiary of a Registered Disability Savings Plan?
Any individual can be designated as a beneficiary if he or she:
- is eligible for the Disability Tax Credit;
- has a valid social insurance number (SIN);
- is a resident in Canada and at the time the plan is entered into;
- is under the age of 60. This age limit is not applicable when a beneficiary’s RDSP is opened as a result of a transfer from the beneficiary’s prior RDSP.
- Who can contribute to the registered disability savings plan?
Anyone can contribute to an RDSP with the written permission of the plan holder.
Who can set up a Registered Disability Savings Plan?
If the beneficiary has reached the age of majority and is contractually competent, only the beneficiary can open an RDSP and become a holder of the plan. If the beneficiary is a minor, another person can open an RDSP for the minor and become a holder if that person is:
- a legal parent of the beneficiary;
- a guardian, tutor, or curator of the beneficiary, or an individual who is legally authorized to act for the beneficiary; or
- a public department, agency, or institution that is legally authorized to act for the beneficiary.
What is HandyTax’s role in this process?
HandyTax’s role comprises both our core services of Disability Tax Credit and Child Disability Benefit Applications, and value-added services once you are approved for the Disability Tax Credit. Through our RDSP1 initiative, we will:
- Ensure that the client is approved for the Disability Tax Credit;
- Maximize your Disability Tax Credit and Child Disability Benefit claims, which you may use to invest in an RDSP;
- Provide recommendations as to where an RDSP can be opened in your town or city;
- Aid in regards to applying for grants and bonds and ensure the maximum amounts are received.