What is a Registered Disability Savings Plan (RDSP)?
The RDSP is a tax-sheltered savings tool that can be used by disabled persons themselves, through their parents or legal guardians. Similar to an RESP, contributions to the RDSP are not tax deductible but attract matching grants in the form of a Canadian Disability Savings Grant (CDSG). The growth of investments within the RDSP is not taxed. The grants and investment gains within the plan are taxed in the hands of the beneficiary when withdrawn. RDSP are available to ages 59 or younger and who are eligible to receive the Federal disability tax credit. The maximum CDSG grant through Ottawa is $3500.00 in an RDSP per year provided that the beneficiary's family income is $75,769.00 or less. If the family income is over that amount, one dollar for every one dollar contributed to a maximum of $1000.00 per year is granted. The lifetime contribution limit on putting money in an RDSP is $200,000.00 and the lifetime maximum grant money available is $70,000.00. Where you are disabled from a car accident or have an illness like MS or Parkinson's and are in receipt of the disability tax credit through the Federal Government, the RDSP can be used as a way to save up for adaptive technology, home care or future financial security. NOTE: Before investing in a RDSP or any other investment, proper investment advice should be obtained as to whether it can benefit you in your particular circumstances, as it may not be applicable in all circumstances, and other rules, regulations and conditions may apply.
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