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Exciting news!  Yet another province has decided to exempt the RDSP from affecting Disability Benefits.  Saskatchewan put out a news release earlier today from the Ministry of Social Services indicating that the RDSP will not affect the calculations for those receiving social assistance, exempting both the RDSP as an asset and income.

In a statement found in the news release the Minister of Social Services for Saskatchewan Donna Harpauer is quoted as saying, “the exemption of RDSP assets and income from social assistance calculations makes sense for a number of reasons. Most importantly, it will encourage individuals with disabilities and parents of children with disabilities to create RDSPs without having to worry that the assets will be clawed back when withdrawals are made on behalf of the beneficiaries.”

This a a very exciting development for people in Saskatchewan as it now means they, along with BC, Newfoundland, and Yukon, can fully utilize the benefits that the RDSP provides.  The Saskatchewan Government has shown progressive and forward-thinking leadership in this move to exempt the RDSP and should be commended for this exemption of the RDSP.

If you would like to view the official news release as found on the Government of Saskatchewan’s website you can visit http://www.gov.sk.ca/news?newsId=ff7d6467-8e61-4579-8319-651bb0f3b5a7

As well, you can read the Leader-Post (Regina) article written by Pamela Cowan that does a good job of explaining the importance of this move for Saskatchewan.  You can view this article at http://www.canada.com/reginaleaderpost/news/story.html?id=d22ce6ce-3821-4b10-a130-1773ead35f1b

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Not including BC, Newfoundland and Yukon (who have all already exempted the RDSP), many provinces/territories are in the midst of deciding how the RDSP will affect someone who is receiving Disability Benefits. We decided to put together a Top 10 list of why we think it is important these provinces/territories exempt the RDSP as an asset and income. If you have any reasons you would like to include feel free to post a comment and add to our list.

TOP 10

1. Poverty reduction – Governments cannot provide for the future financial security and social well-being of people with a disability on their own. Governments need to begin forging a new relationship with families to enable and encourage their contributions. As many new programs such as SEDI’s Independent Learning Accounts (ILA’s) are demonstrating, the ability to accumulate assets and save for the future has a direct impact on poverty reduction. In fact, when the Newfoundland Government decided to exempt the RDSP from asset and income tests, they made this decision as part of their Provincial Poverty Reduction Strategy (click here).

2. Positive Messaging – Exempting the RDSP as an asset and income would send a strong message to families that Provincial Governments understand their ability and determination to help their family member or friend with a disability. Allowing the full benefits of the RDSP would go a long way towards rebuilding trust between government and communities, and stimulate a positive partnership between the two. Families and friends of people with disabilities need to begin planning beyond their lifetime and need the security of clear public policy that underlines provincial governments’ willingness to help.

3. Establish a New Vision Exempting the RDSP would help establish a new vision that acknowledges the huge contribution that people with disabilities have to make to the community. Allowing people with disabilities and their families the opportunity to contribute towards their own well-being will go a long way towards eradicating the notion that people with disabilities have little to contribute. Increased financial security will encourage people with disabilities to enter into the community and participate in activities, employment, volunteering, education, etc.

4. Equality – British Columbia, Newfoundland, and Yukon have all exempted the RDSP from any asset and income tests. If other provinces/territories do not fully exempt the RDSP from their own asset and income tests it will prove to be a disadvantage and unequal treatment of people with disabilities in other provinces/territories.

5. Family Resiliency – Often there are significant restrictions and penalties around familial support directed towards a person with a disability receiving Disability Benefits. Families and friends who are in a position to help are often unable for fear they will disqualify their loved one from receiving their much-needed supports. Exempting the RDSP would promote the resiliency of families/people to solve some of their own problems, especially for a marginalized disability population that has significantly higher costs for daily living.

6. Future Government Savings and Revenues – The RDSP will generate future government program savings and revenues as people with disabilities become more secure financially. The residual effects of allowing people with disabilities to save for their future will alleviate some of the strain from government supports and programs.

7. Maximizing Federal Contributions – The RDSP provides no cost to provincial governments and has the potential to leverage huge amounts from the federal government. By accommodating the RDSP provincial governments can inject a significant amount of money into their respective disability community without raising their costs for programs and supports.

8. Encourage Home Ownership – For many people with a disability the likelihood of ever owning a home is pretty remote. With many of the current provincial welfare systems discouraging the accumulation of savings or employment, many people with disabilities will have to remain in institutions or group homes. This is worrying considering the majority of Canadians view owning their own home as one of the essential determinants of their social and financial well-being. The RDSP provides people with disabilities the opportunity and incentive to save for a home, and in realizing this dream, become more active and involved in the community.

9. Financial Literacy – In most provinces the legislation and regulations surrounding those receiving disability benefits is convoluted and complicated. Simply trying to understand all the rules and regulations associated with supports and programs is arduous, time-consuming, and often impossible to manage. Providing a full exemption of the RDSP will simplify the process of understanding the plan and will ensure everyone who is eligible for the RDSP can benefit from it. If provinces fail to exempt the RDSP many individuals and families will simply refrain from setting one up as they do not want to be disqualified from receiving disability benefits.

10. Community Support – The support for a full exemption of the RDSP is immense and spans across the country. Any province that takes this monumental step will receive widespread support for their position and will solidify themselves as an example of a forward-thinking government which understands the needs for new solutions in an ever-changing societal and political environment. As we have seen in BC, Newfoundland, and Yukon, provincial governments who exempt the RDSP are receiving well-deserved praise and support for their efforts to move the disability agenda in a positive and progressive direction.

Yukon is the first Territory in Canada to exempt the RDSP . They recently published a new version of the Yukon Social Assistance Regulations. In these regulations they have exempted the RDSP as an asset and indicated that it will not be included in the calculation of liquid assets for someone receiving social assistance.

Notwithstanding subsection (1), the following shall not be included in the calculation of liquid assets: (c) accumulated savings in a person’s Registered Disability Savings Plan;”

To read the regulations visit: http://www.hss.gov.yk.ca/downloads/252_Social%20Assistance%20Regulation%20Final%2008.pdf

The Department of Health and Social Services has also indicated that they will not count the income from the RDSP when they determine benefit levels for someone on social assistance.

“Federal Registered Disability Savings Plan and the Working Income Tax Benefit For persons on social assistance who receive the above Savings Plan or Tax Benefit, it will not be counted as income for the purpose of determining benefit levels.”

To visit website go to: http://www.hss.gov.yk.ca/programs/social_services/assistance/changes_to_social_assistance/

This is a very encouraging development as Yukon has now joined British Columbia and Newfoundland in exempting the RDSP. These provinces and territory have made it clear that they understand that people with disabilities face barriers that others don’t, and that they are willing to assist people and their families achieve financial security. As the launch of the RDSP in December draws near we are optimistic that the other provinces and territories will decide to exempt the RDSP as well.

Congratulations to the Government of Yukon on taking this monumental step towards improving the lives of people with disabilities in Canada!

Many people have been asking us who they should contact in their provinces if they have more questions on the Registered Disability Savings Plan (RDSP). If you are unsure of your provincial government’s plans for the Registered Disability Savings Plan, we encourage you to contact your provincial government representative or your Minister responsible for disability income assistance.

You can download the following list of provincial government ministers with links to their contact information: Provincial Ministers responsible for Disability Income Assistance – Contact List

This list was compiled in July of 2008.

Currently BC, Alberta, Newfoundland, Saskatchewan, Manitoba, Ontario, Nova Scotia, NWT and Yukon have exempted the RDSP as an asset and/or income. Quebec and New Brunswick have exempted the RDSP as an asset but are capping the amount of income that you are allowed to withdraw from the plan (QB $305 exempt monhtly and NB $800 exempt monthly). Prince Edward Island has announced that they will exempt the RDSP as an asset and income up until the low income threshold (see http://www.rdsp.com for more details), and Nunavut has currently not indicated how they will treat the RDSP.

We will be updating this blog consistently and letting you know as soon as the provinces announce their intentions.

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