Canada Registered Disability Savings Plan

DEFINITION:Canada Registered Disability Savings Plan (RDSP) is a savings plan specifically designed for individuals with disabilities in Canada. It is a long-term savings vehicle that allows individuals and their families to save money for the future needs of the disabled person.


1. What is the purpose of a Registered Disability Savings Plan (RDSP)?
The purpose of an RDSP is to provide individuals with disabilities a means to save for their long-term financial security. It allows them to accumulate funds for future expenses and improve their quality of life.

2. Who can open an RDSP?
An RDSP can be opened by an individual who qualifies for the Disability Tax Credit (DTC) and is under the age of 60. The plan can be established by the person with the disability, their legal representative, or a parent or guardian if the individual is a minor.

3. What are the benefits of having an RDSP?
The benefits of having an RDSP include eligibility for government assistance, such as the Canada Disability Savings Grant (CDSG) and the Canada Disability Savings Bond (CDSB). These programs provide additional contributions to the RDSP, helping to grow the savings even further.

4. How much can be contributed to an RDSP?
The maximum lifetime contribution limit for an RDSP is $200,000. However, the beneficiary may continue to receive government grants and bonds until the end of the year in which they turn 49.

5. Are withdrawals from an RDSP taxable?
Yes, withdrawals from an RDSP are taxable. However, the taxation is based on the beneficiary’s income, which is typically lower due to their disability. As a result, the tax payable on withdrawals is often minimal.

6. Can funds from an RDSP be used for any purpose?
The funds from an RDSP can be used for any purpose, such as education, housing, transportation, healthcare, or any other expenses that improve the life of the individual with the disability. However, it is important to ensure that the funds are used in a manner that complies with the regulations set by the government.

7. Are there any restrictions on when withdrawals can be made from an RDSP?
Withdrawals from an RDSP can be made at any time; however, they are subject to certain taxation and government program rules. Additionally, withdrawals must begin by the end of the year in which the beneficiary turns 60, known as the end of the Beneficiary’s Lifetime Assistance Payments period.