Canada Disability Savings Plan

DEFINITION:Canada Disability Savings Plan (CDSP): The Canada Disability Savings Plan is a federal program designed to help individuals with disabilities save for their long-term financial needs.


1. What is the Canada Disability Savings Plan?
The Canada Disability Savings Plan (CDSP) is a government-assisted savings plan for individuals with disabilities to help them save for the future without affecting their government benefits.

2. Who is eligible for the CDSP?
To be eligible for the CDSP, an individual must be a Canadian resident, have a valid Social Insurance Number (SIN), be under the age of 60, and be eligible for the Disability Tax Credit (DTC).

3. What are the benefits of participating in the CDSP?
Participating in the CDSP offers several benefits, including eligibility for government grants and bonds, tax-deferred growth of investments within the plan, and the ability to save for long-term financial needs without affecting government benefits.

4. What are the government grants and bonds available through the CDSP?
The CDSP offers the Canada Disability Savings Grant (CDSG) and the Canada Disability Savings Bond (CDSB). The CDSG matches a portion of contributions made to the plan based on the beneficiary’s family income, while the CDSB provides additional funds for low-income individuals.

5. How much can I contribute to the CDSP?
There is no annual contribution limit for the CDSP. However, there is a lifetime contribution limit of $200,000 per beneficiary. Contributions can be made by the beneficiary, their family, friends, or through certain government programs.

6. Are there any tax implications associated with the CDSP?
While contributions to the CDSP are not tax-deductible, the investments grow on a tax-deferred basis, meaning that income earned within the plan is not taxable until funds are withdrawn.

7. Can I withdraw funds from the CDSP?
Funds in the CDSP can be withdrawn by the beneficiary when needed, but they must be used for the purpose of supporting the beneficiary’s long-term financial needs. A portion of the grants and bonds received may have to be repaid if funds are withdrawn before a specified period.