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Several reforms important to people with disabilities became law in mid-December when Bill C-47 (the last of the budget Bills) was passed by the Senate and given Royal Assent.

In his budget, Finance Minister Flaherty announced carry forward provisions for the Canada Disability Savings Grant and Bond as well as provisions for the rollover of RRSPs and RRIFs to the RDSPs of sons, daughters and grandchildren.

1.  Carry Forward Provisions for RDSP Grants and Bonds

Effective 2011, people’s Canada Disability Savings Grant and Bond entitlements can be carried forward.

When a person opens an RDSP, Canada Disability Savings Bond entitlements will automatically be calculated and paid into the plan for the preceding 10 years (but not before 2008, when the RDSP was launched).  This means people opening RDSPs in January, 2011 will can qualify (based on income) for up to $4,000 in Canada Disability Savings Bond – $1,000 for each of 2008, 2009, 2010 and 2011.

At the same time, the balances of unused CDSG entitlements will be determined for the same period. If contributions are made to the RDSP, Canada Disability Savings Grants will be paid on unused entitlements, up to an annual maximum of $10,500.  The matching rate on unused entitlements will be the same as if the contribution were made in that year.  In addition, contributions will be used against Grant entitlements at the highest rate first.

That means a contribution of $2,000 into a new RDSP in 2011 will result in a Canada Disability Savings Grant payment of $6,000 ($2,000 x 300%).  Combined with the Canada Disability Savings Bond, the result will be $10,000 from the federal government.

That’s equivalent to turning $2,000 into $12,000!  See table below:

Canada Disability Savings Bond $4,000
Contribution $2,000
Canada Disability Savings Grant $6,000
Total in RDSP $12,000

2.  RRSP/RRIF Rollover to a Registered Disability Savings Plan

The new provisions will permit parents and grandparents to rollover RRSPs and RRIFs, at death, to the RDSPs of financially dependent children and grandchildren, on a tax deferred basis.  A person is generally considered to be financially dependent if their income is below a specific threshold ($17,621 for 2010). A person whose income is above this amount may also be considered to be financially dependent if dependency can be demonstrated.

Normally any assets held in RRSPs and RRIFs become income in the year of the death.  When these assets are passed to the RDSP of a child or grandchild, the tax that would normally be payable is waived.

The amount of the rollover may not exceed the beneficiary’s available RDSP contribution room. That means as much as $200,000 can be rolled into a new RDSP.  If contributions have already been made then the amount will equal $200,000 minus previous contributions (This doesn’t include federal government contributions).

The rollover will count as contributions towards the beneficiary’s lifetime limit but will not be matched by Canada Disability Savings Grants. The rollover will be considered private contributions for the purpose of determining whether private or government contributions are greater. But because the rollover will not have been subject to income tax, it will be considered taxable when withdrawals are made.

The rollover is effective for deaths occurring on or after March 4, 2010. For deaths of an RRSP annuitant after 2007 and before 2011, special transitional rules will apply.


The Honorable James Flaherty, Minister of Finance, has once again taken the initiative to ensure that people  with disabilities are able to access the RDSP.

You are probably aware that the Disability Tax Credit (DTC) is one of the key eligibility requirements to open an RDSP.

You might not be aware that most determinations made by Canada Revenue Agency under the Income Tax Act can be appealed to the Tax Court of Canada.  This includes applications for the Disability Tax Credit.

There is, however, currently a law, that prevents people from making an appeal to the Tax Court of Canada unless it affects their tax payable.   This means that if a person has insufficient income to pay taxes, and has nobody to transfer the Disability Tax Credit to, then a determination on their eligibility for the DTC cannot be appealed to the Tax Court (even if it might affect their ability to open an RDSP).

Minister Flaherty today announced his intent to change this legislation:

“Procedural issues of this nature should not be an impediment for individuals who wish to establish their right to the Disability Tax Credit and, as a result, also their right to open an RDSP.

“To promote the fair and equitable treatment of Canadians, I intend to introduce legislative amendments at the earliest opportunity so that individuals can, in every case, appeal a determination concerning their eligibility for the Disability Tax Credit.” – Minister James Flaherty

Press Release

If you would like easy to understand information on the new Registered Disability Savings Plan please visit

Recently, Vickie Cammack, Co-Founder of PLAN was interviewed for an article on the Samara Blog about the RDSP, and the history behind the new plan.

“Public Service Matters” By Steve Gamester – June 24th, 2009

“I think we’ve been successful because we’ve had a hand in the soil and a hand in the stars at the same time.” With that, Vickie Cammack sums up the winning formula that led to the RDSP, a registered savings tool designed for the long term financial security of people with disabilities.

How did the RDSP happen? According to Vickie, it had all the typical policy development ingredients we know and love: multiple consultations, independent research and an expert panel. The original idea, however, was born in the community. This is the other half of the formula: the hand in the soil.

Since it was founded in 1989, PLAN has talked to thousands of individuals with disabilities and their families about what they want in life. Their approach, while simple, was revolutionary. “Traditionally, the attitude towards people with disabilities has been, let’s get them services,” said Vickie, but she and co-founder Al Etmanski found that one-dimensional.

“We asked people to talk about the elements they considered critical to have a good life. Most people talked about close connections with friends and family and the freedom and ability to pursue their interests,” she said. From these consultations, PLAN quickly recognized that financial security was a big part of that equation so began to look for ways to help families achieve it. Eventually that led to the RDSP.

“The original idea was for a tax credit, but it never caught on,” explained Vickie. “Everything changed as soon as we started calling it a Disability Savings Plan.” That concept clicked with people, reminding them of the familiar RRSP and RESP.”

To view the article in its entirety please visit the Samara Blog by clicking on the following link:

If you would like easy to understand information on the new Registered Disability Savings Plan please visit

Now that the Registered Disability Savings Plan has been available for almost half a year, it would be interesting to hear what type of experience people have had:

  • Accessing information about the RDSP
  • Trying to get the Disability Tax Credit
  • Figuring out who can manage the plan
  • Applying through the financial institutions
  • Setting up the plan
  • Contributing to the plan
  • Telling others about the plan

Over the past few months I have heard some really interesting stories about people setting up RDSPs, or trying to set up RDSPs.  Some of these stories have been wonderful and uplifting, while others have been frustrating.  As the first plan of its kind in the world, there are still many things that need to be done in order to ensure everyone who can benefit from the plan is able too.

With the limited amount of information currently available for someone looking to set up an RDSP, and much confusion as to how the plan actually works, telling your story may really help someone who is in the same situation you are.  

If you have a spare moment in your day, post a story here about your experience with the RDSP.  By doing this you can help us understand how the plan is working for people, and what are the key issues that need to be addressed.

To start off, I will tell a story about a friend of mine who wants to set up an RDSP.  

Beth (not her real name) had been planning to set up an RDSP on December 1st, 2008, the first day the RDSP became available.  I had run through the plan with her and explained how she might be able to benefit from it, and Beth was clearly looking forward to “cashing in” (her words) on this opportunity.  She came on to my RDSP telephone seminar a few times and got to know the plan so well that a few times I had to go back to my notes in order to give her an answer to her questions.

Unfortunately for Beth, her eligibility for the Disability Tax Credit was in question.  Beth had been seeing the same doctor she had since she was young, until she moved, at which point she had to find a new doctor.  As a result, her new doctor was not aware of her history as well as her old one.  This meant filling out the Disability Tax Credit was quite the ordeal for her.  We had to go back several times and explain to her new doctor why she was eligible.

Eventually, we were able to get everything filled out and sent off to CRA, but we are still unsure of her status and whether she will receive it.  From a lot of the e-mails I get, I hear that others have had this problem as well.  I’m hoping that Beth gets the credit, as she could receive it retroactive for the last few years, which would hopefully give her some money towards her RDSP.

December 23, 2008


Minister Flaherty announces extension for 2008 contributions


At an event to mark the national availability of the RDSP through BMO, Federal Finance Minister Jim Flaherty today announced that any contributions made by March 2nd, 2009 will be considered 2008 contributions, and will be matched by 2008 Grants.  This is great news for people and their families who have been desperate to get their plans open and contributions made to access the 2008 Grant and Bond.


Federal Government Update


Minister Flaherty was joined by Diane Finley, Minister of Human Resources and Social Development Canada, Tom Flynn, Executive Vice President at BMO and Jack Styan, Executive Director of PLAN.


Federal Government News Release


Listen to the statements made at the December 23rd press conference:

            Honorable Jim Flaherty, Minister of Finance

            Honorable Diane Finley, Minister of Human Resources and Social Development

            Jack Styan, Executive Director of Planned Lifetime Advocacy Network.

Yesterday the Regulations for the Registered Disability Savings Plan were published in Part 2 of the Canada Gazette (p.16-20). As expected there were not a lot of changes following the consultations held by the federal government in Ottawa, Montreal, Toronto and Vancouver. The one substantial change that came out of the original draft regulations was the earnings from the Grant and Bond have been removed from the assistance holdback amount.

Originally, if people withdrew early from the plan and had received a Canada Disability Savings Grant or Bond from the government, the total amount of the Grant and Bond including earnings, would be clawed back. In the final Regulations published yesterday, this need to include earnings in the assistance holdback amount has been withdrawn. The passage below is an excerpt from the Gazette which outlines this change.

“Some representatives from financial institutions expressed concern about the administrative complexity surrounding the assistance holdback amount. The Government originally proposed that the assistance holdback amount be comprised of the CDSG, CDSB and any earnings they generate. In response to concerns
raised by financial institutions regarding the difficulty in tracking earnings generated from the CDSG and CDSB, the Government removed earnings from the assistance holdback amount. In the Regulations, the assistance holdback amount will only be comprised of the CDSG and CDSB. This change is expected to ease
the administrative burden and cost for financial institutions while being less punitive for people with severe and prolonged disabilities who hold an RDSP.”

The federal government has committed to conducting a review of the RDSP in 3 years, so this isn’t the last opportunity we will have to request amendments to the Regulations.

To access the final Regulations you can click on the following link:

Minister Flaherty tabled legislation to create the Registered Disability Savings Plan on November 21st. The text of the “first reading version” of the bill can be accessed from this site: Note that the RDSP is only part of a larger Bill. You can also see the status of the Bill from this site.

The explanitory notes that accompany the bill were also released. They can be accessed from the Finance Canada website: Note that only pages 26 to 48 pertain to the RDSP.

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