My Writing > Good News for Persons with Disabilities

You don't have to hide your money in a sock ... at least in BC
3 Dec 2007


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Federal Legislation on November 21, 2007 created a Registered Disability Savings Plan (RDSP).  The RDSP provides a bond of up to $1,000 a year, lifetime maximum of $20,000 for persons with a disability with low income.  Save up to age 49 and start withdrawals at age 60.  There will be matching grants of up to $3,500 a year, lifetime maximum $70,000.  Save up to $200,000 for a person with a disability in an RDSP.  See Bill C-28 November 21, 2007 and Explanatory Notes for details.    This is good news for persons with disabilities.  About 800,000 Canadians currently qualify for the federal Disability Tax Credit.  Over 3 Million Canadians had some form of infirmity per Statistics Canada surveys in 2001. 

In a press release dated November 28 2007, the Province of British Columbia announced they are exempting RDSP from calculations of assistance, both the savings and withdrawals.  This is a huge step towards making disability programs more about compassion and less about policing.  Congratulations to BC for taking this step. 

Who will be pressured?

The final words in the BC Press Release above provide encouragement for qualified British Columbian’s to apply for the federal Disability Tax Credit.  You must have the Disability Tax Credit to qualify for the RDSP.  There will be increased requests for certification of disability due to the significant financial incentives provided by the RDSP program. 

Qualified medical practitioners (see the T2201 for a list) will feel the pressure of this announcement.  Support and education will be essential for qualified medical practitioners and social workers who must complete T2201 Disability Tax Credit Certificates for persons with a disability.  Those persons may qualify to save in an RDSP and to obtain their matching grants and/or bonds of as much as $90,000. 

Former members of the Disability Advisory Committee requested this summer that the Federal Minister of Revenue create a task force to study and make recommendations about the challenges faced by qualified practitioners about certification of disability and medical expense claims. 

What’s next?

    1. Will the Federal Minister of Revenue create a task force to study the challenges faced by qualified medical practitioners about documentation of disability and medical expenses required to be ‘certified in writing’? 
    2. Will provinces and territories provide matching grant and low income bond to match the federal program in the next budget as suggested in the federal documents? 
    3. Will other provinces/territories to follow BC’s lead by exempting RDSP savings and withdrawals from assistance calculations?

What should be done about dignity?

Monthly income, means and needs testing should be permanently suspended for persons on provincial disability income assistance whose disabilities are severe and prolonged enough to qualify for the federal Disability Tax Credit.  The provinces and territories suspend dignity for persons with a disability when we scrutinize bank accounts and assets every month for persons whose disability is severe and prolonged.  The administrative cost and invasive nature of that monthly scrutiny far outweighs any benefits.  We don’t treat seniors this way.  It would be acceptable to test annual income and to adjust assistance the following year, similar to other federal benefit programs like GIS for seniors.  If a person with a disability on social assistance lives to age 65, their cash flow increases by $4,000 per year ($10.96/day).

Compare the treatment of persons with a disability on provincial benefit programs with seniors on federal benefit programs.  I wonder if there is potential for a class action lawsuit about discrimination about the treatment of persons with disability versus seniors when you compare: 

q     $11,000 per year for provincial disability assistance

q     $15,000 per year for OAS and GIS if you live to age 65

Could you live on $11,000 per year? 

In either case, yes Pharmacare pays your medical costs and BC Medical premiums are waived. 

Rent $4,200 ($350/month or $11.51/day)

Remainder for food, clothing, incidentals $6,800 ($18.68/day)

Now transport yourself to dialysis or chemotherapy or get your wheelchair repaired …


Eileen Reppenhagen, Certified QuickBooks ProAdvisor writes and speaks about accounting and tax.  She is a regular contributor to Canadian MoneySaver, The TaxLetter and Intuit’s award winning online publications for accountants and QuickBooks ProAdvisors, ProConnection Newsletter and Advisor Advantage.  

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