The RDSP (Registered Disability Savings Plan) was established to help ensure the long-term financial security of a child with a severe disability. Like the RESP, contributions to the RDSP are not deductible but accumulate tax-free and generous government grants are available.
Key features of the RDSP:
- Only one plan per beneficiary is permitted;
- Beneficiaries must be eligible for the disability tax credit;
- 70,000 in grants are available, subject to annual maximums;
- 20,000 in bonds are available, subject to annual maximums;
- Maximum lifetime contributions of $200,000;
- The taxable portion of withdrawals is the responsibility of the beneficiary.