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Yes, starting after 2013. For more details, see: http://rdsp.com/2012/07/11/federal-government-releases-qa-sheet-on-rdsp-changes/

jcrocker July 12, 2012 11:56 am Reply |

The maximum lifetime amount you can put in is $200,000 (grants and bonds and interest growth can go above this), so the maximum in a year is 200,000 minus whatever you have already put in.

jcrocker July 12, 2012 11:58 am Reply |

Hi Nellie, If you accept government grants and bonds, you need to leave the money in the RDSP for ten years or there will be a penalty. If you do not take any grants or bonds, you can withdraw whenever you like (however, after you turn 60, there is a yearly minimum you will have to withdraw.)

jcrocker July 12, 2012 12:00 pm Reply |

The government will only contribute up until the end of a person’s 49th year. But even without any grants or bonds, the big benefit to having an RDSP is that one can save a large amount of money for later years without it affecting other government disability benefits.

jcrocker July 12, 2012 12:04 pm Reply |

In your example, Jim, the maximum would be 1k for that year’s contribution. However if you have any previous year’s grants not yet used, your 20k would trigger the carry forward of any unused amounts (up to a max of 10.5k per year).

jcrocker July 12, 2012 12:08 pm Reply |

Hi Harald, After 2013, the government is replacing the RDSP 10-Year Rule with a new Proportional Repayment Rule. So instead of all grant and bond money being paid back if any withdrawal took place for the 10-year period after a government contribution—now, within that same 10 years, for each $1 taken from an RDSP, only $3 of any grants or bonds paid into the plan would need to be repaid, up to a maximum of the grants and bonds contributed. For the maximum annual amounts, well, the maximum lifetime amount you can put in is $200,000 (grants and bonds and interest growth can go above this), so the maximum annual amount would be 200,000 minus whatever you have already put in.

jcrocker July 12, 2012 12:18 pm Reply |

Hi Laura, Eligibility for an RDSP is all about having eligibility for the Disability Tax Credit (DTC). If your daughter’s condition ever improves such that she does not qualify for the DTC for a taxation year (i.e. she is DTC ineligible throughout a full calendar year), the RDSP must be terminated by the end of the following year. The previous 10 years worth of grants and bonds must be returned to the government and any assets remaining in the RDSP (including all interest growth) will be paid back to her. Any grants and bonds older than 10 years are always hers to keep. You should know however that the government is currently making a helpful adjustment for those that might again be eligible for the DTC: Basically, if you have written certification from a medical practitioner that the beneficiary will likely, because of their condition, be eligible for the DTC in the foreseeable future—an RDSP can remain open after the beneficiary ceases to qualify for the Disability Tax Credit, up to 4 years in length.

jcrocker August 14, 2012 1:46 pm Reply |

Hi David, Staggered contributions are the way to maximize the grant as the money you put in today will not trigger future years’ grants. Now grants will be paid for previous years (for up to ten years but not before 2008 when the RDSP began), so if you contributed your lifetime personal contribution maximum of $200,000 now, it could earn you grant amounts from 2008 up to this year, but you could never get any more grants in the future. The most optimal way to leverage the grant—if your and any spouse’s income is below $85,414—is to deposit $1,500 per year. That is the lowest personal contribution amount that triggers the highest government grant; $3,500 per year. Do this for 20 years to earn the maximum lifetime grant amount of $70,000 in the shortest amount of time. Keep in mind that you need to leave the RDSP untouched for an additional ten years to avoid any early withdrawal penalties.

jcrocker August 21, 2012 2:39 pm Reply |

Hi Alex, There is no maximum family income limit to receive the one to one grant. So yes, your son would be eligible for the grant of $1 for every $1 contributed, up to a total of $1,000.

jcrocker October 9, 2012 10:33 am Reply |

Hi Colleen—Yes, if someone loses their DTC status, the RDSP would be collapsed and all government grants and bonds given in the previous ten years would need to be paid back. You would not, however, lose your personal contributions or any interest growth. Keep in mind that an RDSP will be allowed to remain open, but “dormant” for a period of up to five years if there is a likelihood that the person will again qualify for the DTC. To prove this likelihood, the holder must have a medical practitioner, like a doctor, certify in writing that the “nature of the beneficiary’s condition will make the beneficiary eligible for the DTC in the foreseeable future”. During this dormant period, the RDSP remains open but no new contributions can be made, and no grant or bond will be paid to the plan or accumulated. This new measure will take effect after 2013.

jcrocker October 9, 2012 10:28 am Reply |

Hi Shannon, Not two “owners” per se, as in RDSP beneficiaries, but there can be two account holders. So only one person owns the money, but more than one person can help manage the RDSP.

jcrocker December 18, 2012 12:18 pm Reply |

Hi Laura, The government’s contributions always have to remain untouched for a full ten years, otherwise you repay some as a penalty. The only exception is if the RDSP owner can prove—by a statement from a medical practitioner—a “shortened Life expectancy” of 5 years or less. Then the person can withdraw up to $10,000 per year without it triggering the ten-year rule.

jcrocker December 18, 2012 12:27 pm Reply |

Hi Judy, At this point all the money is donated to the person with the disability at the time it is put into their RDSP. Have you looked into using a Will to possibly redirect funds back to contributors? There’s more info on disability estate planning here: http://plan.ca/2012/02/03/estate-planning-for-your-relative-with-a-disability/

jcrocker February 8, 2013 2:21 pm Reply |

Hi Kathy, When the person dies, any Grant or Bond received within the previous ten years must be repaid to the federal government. Government contributions OLDER than ten years as well as all personal contributions and all interest growth become part of the beneficiary’s estate and will be distributed according to his/her will. If there is no will, the assets in the RDSP (and all other assets) will be distributed according to provincial law.

jcrocker February 8, 2013 2:34 pm Reply |

Hi Linda, The RDSP beneficiary or his or her legal representative will be required to make an election in prescribed form to transfer the RRSP proceeds to the RDSP on a rollover basis. The election would be made at the time of the RDSP contribution and filed with both the Canada Revenue Agency and Human Resources and Skills Development Canada by the RDSP issuer. For more of an explanation, see pages 342 to 343 of Federal Budget 2010: http://www.budget.gc.ca/2010/home-accueil-eng.html Your personal tax accountant should also know how to arrange this. If not, try Ability Tax Group (http://abilitytax.ca/).

jcrocker February 8, 2013 2:59 pm Reply |