Government Welcomes National Availability of Registered Disability Savings Plans and Extends Deadline for Establishing a Plan and Applying for the 2008 Grant and Bond
The deadline for opening an RDSP, making contributions and applying for the matching Grant and the income-tested Bond for the 2008 contribution year has been extended to March 2, 2009 from December 31, 2008. The 2009 RDSP contribution year will begin March 3, 2009.
Individuals who qualify for the disability tax credit, their families and others may save for the long-term financial security of a person with a severe disability by contributing to an RDSP. These contributions may be supplemented by matching Canada Disability Savings Grants from the Government of Canada. The Canada Disability Savings Bond is also available for low- and middle-income families even if no contributions are made.
The RDSP is a tax-assisted savings plan. Contributions to an RDSP will not be deductible, nor will they be included in income when withdrawn. Investment income, grants and bonds are included in the income of the beneficiary when withdrawn from an RDSP.
To maximize the effectiveness of RDSPs and ensure that payments from the plan supplement rather than reduce income and benefits from other sources, amounts paid out of RDSPs will not affect federal income-tested benefits and credits such as the Canada Child Tax Benefit, the Goods and Services Tax Credit and Old Age Security.
The Government of Canada has also worked with the provinces and territories to ensure that RDSPs are as effective as possible. To date, Newfoundland and Labrador, Ontario, Manitoba, Saskatchewan, Alberta, British Columbia and the Yukon have announced that RDSP income and assets will not affect calculations for income support benefits. Quebec, New Brunswick and Prince Edward Island have announced that RDSP payments will be exempt from income support reductions up to certain limits.
Additional information on the grant and bond can be found on the Human Resources and Skills Development Canada website at: www.hrsdc.gc.ca/disability.