Contributions to a RDSP, Registered Disability Savings Plan, have a lifetime limit of $200,000 but no annual limit amount. Contributions into a RDSP are not limited only to the plan holder. With written permission from the beneficiary, anyone can contribute into an RDSP. Contributions may happen up until the end of the year the beneficiary turns 59. Funds invested in the account accumulate tax-free.
Canada Disability Savings Bond
- Contributions to a RDSP may attract the Canada Disability Savings Bond.
- The bond aims to help families with net income less than $46,605 save for the person diagnosed with a disability.
- If beneficiary is under 18, assessment will be made on his parents/legal guardian family net income
- If the beneficiary is over 18, assessment will be made on their family net income
- The government would pay up to $1,000 yearly with a $20,000 lifetime limit.
- The bond is paid into the plan even if no contributions are made. The only catch is that, income tax must be filed at minimum the past two years and all future years going forward.
- If the beneficiary is under 18, legal guardians would have to file it under their income
- If beneficiary is over 18, they would proceed to file it under their own income
Contributions to a RDSP: Canada Disability Savings Grant
Similar to an Registered Education Savings Plan, contributions to a RDSP, attract government grant and the amount varies based on family income. The government would contribute up to $3,500 yearly maximum and $70,000 lifetime limit. Grants on contributions can be received up until December 31st of the year the beneficiary turns 49.
- If your family Net Income is Less than $93,208
- On the first $500 contribution, you would receive $3 in grant for every $1 in contribution = $1,500
- On the next $1,000 contribution, you would receive $2 in grant for every $1 in contribution = $2,000
- If your family Net Income is More than $93,208
- On the first $1,000 contribution, you would receive $1 in grant for every $1 in contribution = $1,000
For more information visit Government of Canada’s official website on RDSPs.
