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The Registered Disability Savings Plan (RDSP) is a registered savings tool that is designed specifically for people living with a disability who are planning for better financial stability.
This short profile is part of a recurring series on Ontario’s best practices in social innovation and entrepreneurship.
Canada’s Registered Disability Savings Plan (RDSP) is now available in every province and territory and is the first of its kind, so it is no surprise that it is piquing interest around the world. While the basic idea would be easy for other countries to adopt, pioneering it here in Canada took a lot of thought and work.
The brainchild of the Planned Lifetime Advocacy Network (PLAN), the RDSP is a savings tool that is similar to an RESP or an RRSP, but is specifically designed for people living with a disability. The financial plan allows anyone already eligible for the Disability Tax Credit to invest up to $200,000 in savings tax-free until withdrawal, and to spend the money in whatever way would benefit them most. The plan also allows family members and loved ones to contribute to a member’s RDSP, and the federal government matches contributions through Canada Disability Savings Grants and Bonds.
Many Canadians who have a disability receive less than $10,000 a year in provincial disability support payments. The RDSP addresses the crucial issue of poverty and financial stability among some of Canada’s most vulnerable citizens, and has inspired government to re-evaluate legislation and programs that address the financial situation of those living with disability across the country.
Read the in-depth SiG profile of the Registered Disability Savings Plan.
Why is the RDSP a best practice? Not only does it address a massive need and have sweeping economic, political and social ramifications— RDSP savings could amount to a billion dollars over 10 years—but its implementation demonstrates the tenacity required to amend legislative and bureaucratic frameworks in order to create much-needed change.
PLAN, a non-profit social enterprise established in 1989 by and for families planning for the lives of family members living with a disability, took eight years to plan, develop, campaign for and obtain legislative approval for the RDSP. During that time, it worked with provincial and federal governments to adapt their legislation, with banks to tailor their existing savings plans and with people with disabilities to ensure that the proposal reflected their needs.
Along the way, PLAN had to transform the mindset of the government and the public from one of welfare (where income support frameworks were key) to one where asset-accumulation was the central driver toward poverty reduction. It also had to help raise the financial literacy of those in the plan to ensure that they could make the right decisions about their assets in the RDSP.
The RDSP stands out as an example because it did more than just provide a quick solution to a pressing social need. It was an impetus to reframe the issue and it opened up new ways of thinking about how to support those living with disability in Canada. It helped ensure our structures are set up to help people lift themselves out of poverty.