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The RDSP is exempt from most provincial disability and income assistance benefits. It does not get clawed back and it does not reduce disability benefits payments.
So how does your province treat the RDSP for someone receiving Disability Benefits?
British Columbia
Both money held in an RDSP (asset) and money taken out of an RDSP (income) are fully exempt from determining eligibility for Disability Benefits.
Regulations: Asset and Income
Alberta
Both money held in an RDSP (asset) and money taken out of an RDSP (income) are fully exempt from determining eligibility for Disability Benefits.
Regulations: Asset and Income
Saskatchewan
Both money held in an RDSP (asset) and money taken out of an RDSP (income) are fully exempt from determining eligibility for Disability Benefits.
Regulations: Asset and Income
Manitoba
Both money held in an RDSP (asset) and money taken out of an RDSP (income) are fully exempt from determining eligibility for Disability Benefits.
Regulations: Asset and Income
Ontario
Both money held in an RDSP (asset) and money taken out of an RDSP (income) are fully exempt from determining eligibility for Disability Benefits.
Regulations: Asset and Income
Nova Scotia
Both money held in an RDSP (asset) and money taken out of an RDSP (income) are fully exempt from determining eligibility for Disability Benefits.
Regulations: Asset and Income
Newfoundland and Labrador
Both money held in an RDSP (asset) and money taken out of an RDSP (income) are fully exempt from determining eligibility for Disability Benefits.
Regulations: Asset and Income
Yukon
Both money held in an RDSP (asset) and money taken out of an RDSP (income) are fully exempt from determining eligibility for Disability Benefits.
Regulations: Asset and Income
Northwest Territories
Both money held in an RDSP (asset) and money taken out of an RDSP (income) are fully exempt from determining eligibility for Disability Benefits.
Regulations: Asset and Income
Quebec
Exempts money held in an RDSP (asset) and partially exempts money taken out of an RDSP (income).
“Lifetime payments made for the benefit of an independent adult from a registered disability savings plan, up to a maximum of $950 per month for an adult benefitting from such a plan.”
Regulations: Asset and Income
New Brunswick
Exempts money held in an RDSP (asset) and partially exempts money taken out of an RDSP (income).
“Funds in a Registered Disability Savings Plan (RDSP) for disabled person is exempt. Income generated from a RDSP up to $800 a month in addition to a person social assistance.”
Regulations: Asset and Income
Prince Edward Island
Exempts money held in an RDSP (asset) and partially exempts money taken out of an RDSP (income).
“There is an exemption on RDSP income up to the point that combined RDSP income and Departmental benefits meet the provincial low income rates. There is also complete exemption of RDSP assets, until they are converted into income to the disabled person.”
Regulations: Asset and Income
1. Poverty Reduction
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.
2. Positive Messaging
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.
3. Establish a new Vision
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.
4. Equality
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
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.
6. Future Government Savings and Revenues
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
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
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.
9. Financial Literacy
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.
10. Community Support
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.