BC is the first provincial government to respond to the RDSP. The BC Government has opened the door for people with disabilities and their families to use the RDSP in securing the future and improving their lives.
Minister Claude Richmond and his colleagues have exempted RDSPs as assets for determining eligibility for Disability Benefits. They have also exempted all income from RDSPs, allowing people to use the plan in whatever way they see fit without any penalties.
BC has set the high watermark for other provinces to reach for.
The BC Government’s act represents a new way forward, a huge first step in a new prosperity agenda for people with disabilities. This action begins to turn disability benefits into a floor, encouraging people with disabilities to get ahead, rather than a ceiling, above which people can’t expect to rise.
This move represents a huge improvement on BC’s trust rules, which were already among the best in the country. It also sets the stage for even further improvements.
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July 1, 2009 at 2:47 am
Lillian
In regards to the RDSP being an exempt asset for people in BC on provincial disability benefits…if someone decides to contribute to someone’s RDSP, would the BC government consider that money to be ‘unearned income’ and subsequently claw back their provincial benefits for that month? If that is the case, then the recipient on provincial disability benefits won’t benefit from people putting any money into their RDSP unless it was more than what their disability cheque would be for the month. For example, Charlie receives $906 a month in provincial disability benefits. His brother Bob wants to contribute $1000 into Charlie’s RDSP account. Would the BC government see that $1000 as unearned income for the month and deduct $906 of it, leaving Charlie with only $94 to put into the RDSP account? And if Bob decides to contribute the $1000 over 10 months, ie $100 a month, then Charlie won’t see a single cent of it in his RDSP account as the money will be deducted off his monthly disability cheque. If this is the case, how can people bypass ‘paying the government’ in order to put money into the RDSP account of people on provincial disability benefits? I understand that the RDSP is an exempt asset for them once they have it, but what about the money given to them from other people intended for the RDSP…is that exempt as well or will they be penalized by the income assistance rules and regulations?
Thank you.
July 6, 2009 at 10:18 pm
Doug Brodhead
Hi Lillian,
Very good question. As long as someone contributes directly into the person’s RDSP, the money will not be considered “unearned income” and subsequently clawed back from their provincial government benefits.
So, in the scenario you describe, as long as Bob deposited the $1,000 directly into Charlie’s RDSP, the BC Government would not deduct any of Charlie’s monthly $906 in provincial disability benefits.
This means that Charlie’s friends and family should not deposit into Charlie’s regular bank account, to then be transferred into Charlie’s RDSP (this would cause clawback on his $906 a month), but need to deposit directly into Charlie’s RDSP account.