My Writing > ABCs of RDSPs

For the disabled, it's a very small start
12 Nov 2007

Originally Published by The TaxLetter Vol. 25, No. 11, November 2007


For the disabled, it's a very small start

 Eileen Reppenhagen


Coming in 2008 to a financial institution near you — the Registered Disability Savings Plan (RDSP).

Introduced last March in the federal budget, the RDSP is modeled on the Registered Education Savings Plan, and is intended as a savings vehicle for parents with severely disabled children. It includes the Canada Disability Savings Grant (CDSG) and the Canada Disability Savings Bond (CDSB). Anyone eligible for the Disability Tax Credit is eligible for the RDSP.

Like an RESP, contributions to an RDSP will not be taxdeductible, although investment income in the plan will grow tax free. Contributions are limited to a lifetime maximum of $200,000, and there is no annual limit. Tax will be paid on investment income withdrawn from the plan by the beneficiary. Also, there’s no restriction on who can contribute to the plan, so it’s open for anyone from relatives to charitable organizations . . .

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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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