A registered disability savings plan (RDSP) is a savings plan that is intended to help parents and others save for the long-term financial security of a person who is eligible for the Disability Tax Credit. RDSP plans are eligible to receive a matching grant and bond. The matching amounts are income tested on the family income if the beneficiary is under age 18 and on the beneficiary’s income if over age 18. Contact your advisor for more information on the matching grant and bond amounts.
Contributions to an RDSP are not tax deductible and can be made until the end of the year in which the beneficiary turns 59 years of age. Contributions that are withdrawn are not to be included as income for the beneficiary when paid out of an RDSP. However, the Canada disability savings grant, Canada disability savings bond and investment income earned in the plan are included in the beneficiary’s income for tax purposes when paid out of the RDSP. (CRA-ARC)