REGISTERED DISABILITY SAVINGS PLAN
Contact us today to see how the REGISTERED DISABILITY SAVINGS PLAN can benefit you.
A Registered Disabilities Savings Plan is a Canada wide matched savings plan specifically for people with disabilities. If you have already qualified for the Disability Tax Credit and are under age 60 then you are eligible. If you do not have the Disability Tax Credit yet, you may still be eligible. Click here for more details.
The main reason to open a REGISTERED DISABILITY SAVINGS PLAN is to assist in saving for the future. The federal government will contribute as much as $90,000 to it. While your savings and grant money is within the REGISTERED DISABILITY SAVINGS PLAN, income taxes do not have to be paid and provincial government disability benefits are not lost.
The REGISTERED DISABILITY SAVINGS PLAN is exempt from most provincial disability and income assistance benefits. It doesn’t get clawed back and it doesn’t reduce disability benefits payments. Federal government benefits such as the Canada Pension Plan, Disability Benefits, Old Age Security and Guaranteed Income Supplement are also not affected.
Once withdrawn, there are no restrictions on how the money can be spent or how much can be withdrawn without affecting your benefits. The income that you earn on your savings in a REGISTERED DISABILITY SAVINGS PLAN is tax deferred. You only have to pay tax when you make withdrawals from your REGISTERED DISABILITY SAVINGS PLAN. And you pay tax only on the government contributions and the investment income in your REGISTERED DISABILITY SAVINGS PLAN. You don’t pay tax on the money that you have contributed.
As part of this savings plan, the federal government will put the Canada Disability Savings Bond of $1,000.00 a year for 20 years into the plan for people living on a low-income of less than $23,855. For people living on an income between $23,855 and $40,970, a partial bond can still be received. The federal government will contribute up to $3,500 per year to your REGISTERED DISABILITY SAVINGS PLAN through the Canada Disability Savings Grant program with contribution matching of up to $3 per $1 contributed.
As of January 2011, the Carry Forward Provision has been put in place. If you were unable to open an REGISTERED DISABILITY SAVINGS PLAN or unaware of the program prior to 2011, and would like to make contributions for 2008, 2009, 2010, as well as 2011, the grant and bond which would have been paid in those years will automatically be calculated and paid into the plan. This means people opening a REGISTERED DISABILITY SAVINGS PLAN in 2011 can qualify (based on income) for up to $4,000 in Canada Disability Savings Bond and up to $10,500 in Canada Disability Savings Grant.
As of July 2011, the RRSP/RRIF Rollover Provision also will be put in place. This new provision will permit parents and grandparents to rollover RRSP and RRIFs at death, to the REGISTERED DISABILITY SAVINGS PLANs of financially dependent children and grandchildren, on a tax deferred basis.
Please contact us for specific details on how this valuable program can benefit you and your family.