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Big Savings Plans Unlimited Usage

Big savings plans, RDSP is for registered disabled Savings Plan. The RDSP works like a savings plan similar to the Canadian Registered Education Savings Plan (RESP). To be eligible for an RDSP, an individual eligible for the Disability Tax Credit, and be under the age of 60 years. The disabled person who receives the funds invested in the RDSP beneficiary.

RDSP contribution to a disabled individual can be made by someone with the written consent of the plan holder. The plan, the holder of a disabled person (if they are of legal age and are legally able to enter into a contract), a legal parent, a guardian that the recipient has authorized to act on his / her account or a government agency that is legally permitted to act for the beneficiary.

Contributions to the plan can be made to the year in which the beneficiary is 59. There is a lifetime limit of $ 200,000 in contributions that can be done to a plan, but there is no annual limit on the amount that can be inserted.

Government Grants & Bonds

A unique feature of the RDSP, and something it shares with an RESP is that a contribution will be matched by the Government of Canada. This comes in the form of Canada disability savings grant (CDSG) and the Canada disability savings bonds (CDSB). The CDSB CDSG and can receive up to the year in which the beneficiary is 49.

The CDSG has a lifetime limit of $ 70,000. An individual can receive up to $ 3,500 of matching grants, with a contribution of $ 1,500. The timetable for the matching, for the year 2010, CRA can be found online.

The CDSB has a lifetime limit of $ 20,000. The bond is required contributions are made. The schedule for the year 2010, can be found at the previously posted link.

Grants and bonds received in one of the ten previous years of the following events to be repaid to the government:

voluntarily closed the RDSP
The plan is issued
a Disability Assistance Payment (DAP) is made of the plan
the beneficiary is no longer eligible for the Disability Tax Credit
beneficiary dies

RDSP is a better than a TFSA or an RRSP?

In some cases, a Tax-Free savings account (TFSA) or a Registered Retirement Savings Plan (RRSP) more lucrative than an RDSP. This is due to the fact that individuals receive a tax advantage when the revocation of a TFSA and when contributing to an RRSP. There is no such tax break for an RDSP, which takes place the grants and bonds, not the other plans.

RDSPs TFSAs are more restrictive than when and how to withdraw money within the plan. A trusted financial planner would perform calculations based on the grants, bonds and tax considerations, to see which plan is most beneficial.


RDSPs are a great alternative for disabled Canadians, although not the only option. One must weigh the pros and cons of all savings plans, taking into account factors such as efficiency and accessibility of the funds invested.

Still, RDSPs are a good option for families of disabled persons, who would set up a trust for their disabled family member, and the grants and bonds can be lucrative to a low income taxpayer.

HandyTax help disabled Canadians and their families receive additional tax refunds of federal and provincial governments.

The refund usually ranges between $ 1,400 and $ 35,000, depending on the duration of the incapacity, the county of residence and age of the applicant.

By: jewelrycvp

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