Registered Disabilities Savings Plan

The Registered Disabilities Savings Plan is now available across Canada.

Canada is the first country in the world to have a Registered Disability Savings Plan (RDSP). The RDSP will present families with a way to provide for the future financial security of their loved ones with disabilities. An estimated 500,000 people across Canada will benefit from this initiative, and future impacts of the RDSP go well beyond a simple planning tool.

From what I understand, the RDSP is similar to the RRSP but designed specifically for families with members with a disability, a market potential of close to $80 billion.

Highlights of the RDSP include:

• Like Registered Education Savings Plans, the plan will allow funds to be invested tax‐free until withdrawal.
• Any individual that is eligible for the Disability Tax Credit may establish an RDSP
• In the case of a minor child, a parent or guardian can establish and direct the RDSP
• $200,000 lifetime contribution limit, but there is no annual limits on contributions
• Contributions permitted by the individual, any family member or friends
• Contributions grow on a tax deferred basis
• No restrictions on when the funds can be used or for what purpose
• Upon withdrawal, the income, the Grant, and the Bond are taxed in the hands of the beneficiary, and are likely to be taxed at a much lower rate.

A two-page fact sheet providing a general overview of the RDSP can be found here.

The PLAN Institute for Caring and Citizenship have been the main proponents of the RDSP.

Media coverage of the RDSP on CTV British Columbia

The PLAN Institute has also been in the news recently, with their Executive Director, Vickie Cammack, named as one of Canada’s Top 100 Women in the Champions category, by the Women’s Executive Network very recently.

Posted via web from Renjie Butalid