A Registered Disability Savings Plan (RDSP) is a tax-advantaged way to build long-term savings for a person with a disability. Investment growth is tax-deferred. Private contributions are not tax-deductible. Only one RDSP can exist per beneficiary at a time, but transfers between institutions are allowed.

Eligibility generally requires Disability Tax Credit (DTC) approval, Canadian residency, and a valid Social Insurance Number. An RDSP can usually be opened until December 31 of the year the beneficiary turns 59. Contributions are allowed until that same deadline; government incentives typically stop at the end of the year the beneficiary turns 49.

• Lifetime private contribution cap: $200,000; no annual cap
• Canada Disability Savings Grant (CDSG): income-based matching up to $3,500 per year; lifetime max $70,000
• Canada Disability Savings Bond (CDSB): for lower-income families up to $1,000 per year; lifetime max $20,000; no contribution required
• Carry-forward: up to 10 years of unused grant/bond entitlements; annual catch-up commonly up to $10,500 (grant) and $11,000 (bond)
  Simple example: a $1,500 contribution in an eligible income range can attract the full $3,500 grant in a year (300% on first $500 and 200% on next $1,000). Income thresholds adjust annually; confirm current figures before planning catch-up deposits.

• Disability Assistance Payments (DAPs) can be taken as needed
• Lifetime Disability Assistance Payments (LDAPs) must start by December 31 of the year the beneficiary turns 60 and continue annually
• Tax applies only to grants, bonds, and investment growth; private contributions come out tax-free
• Repayment rule: grants and bonds paid in the previous 10 years may need to be repaid after certain withdrawals, plan closure, loss of DTC eligibility, or death

• If at age of majority and contractually able, the beneficiary may be the plan holder
• For minors or capacity concerns, a parent, legal representative, or authorized person may act
• Temporary rule allowing “qualifying family members” to open RDSPs for adults lacking capacity is currently extended to 2026 (definitions vary by province/territory)

• RDSP-to-RDSP transfers are permitted
• Eligible RRSP/RRIF/RPP amounts of a deceased parent/grandparent may roll to an RDSP if financial dependency rules are met (counts toward $200,000 limit; taxed on withdrawal, not at rollover)
• RESP accumulated income amounts may roll to an RDSP for the same beneficiary if conditions are met, waiving RESP AIP penalty tax

• Specified Disability Savings Plan (SDSP) election for shortened life expectancy enables more flexible withdrawals and modified repayment rules (physician certification required)
• Temporary DTC loss relief can allow the RDSP to remain open for a period without immediate closure
• What planning points help maximize value?
  • Open early to capture up to 10 years of carry-forward grants/bonds before age cut-offs
  • Align investments with time to age 60, expected withdrawals, and risk tolerance; diversified portfolios or insurance-based segregated funds may suit capital protection needs
  • Confirm how provincial/territorial disability programs treat RDSP assets and withdrawals; many provide exemptions, preserving income supports
  • Monitor annually indexed income thresholds for grants/bonds and coordinate contributions across family income changes

An RDSP builds long-term financial security for eligible Canadians with disabilities through tax-deferred growth and powerful government grants and bonds. Early setup, strategic catch-up contributions, careful withdrawal timing, and suitable investments can significantly increase outcomes. Always confirm current income thresholds, provincial program interactions, and documentation requirements, and consider professional advice for complex situations such as rollovers, SDSP elections, and capacity rules.