The Registered Disability Savings Plan seems to be impacting policy outside of Canada. Chris Dodd, the US Senator for Connecticut has introduced legislation for a Disability Savings Accounts, which proposes to help families of Americans with disabilities set aside money for future supports without worrying about losing their current government benefits.

Characteristics of the Disability Savings Account:

  • Funds expended from the DSA for specific services such as education, medical services, employment training and support, transportation, and other related services will be tax-free.
  • Interest on accounts with a balance of $250,000 or less is tax free.
  • Low income earners will receive a refundable matching tax credit of up to $1000 for their contributions to the DSA.
  • Funds from college savings plans and special needs trusts for the same beneficiary can be rolled into the DSA without penalty.

It will be interesting to see whether this bill gets passed and what, if any, alterations are made. If you want to read more you can check out Senator Dodd’s website http://dodd.senate.gov/index.php?q=node/4316/print

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