FAQ

The RDSP is a savings vehicle introduced by the Canadian federal government to help families plan for the long-term financial wellbeing of individuals living with severe disabilities. It includes government matching grants and income-based bonds to boost savings. While personal contributions aren’t tax-deductible, any investment earnings within the plan are allowed to grow on a tax-deferred basis.
Who is the account holder?
This is the person responsible for opening the RDSP. They handle contributions (including allowing others to contribute) and manage the plan on the beneficiary's behalf.

Who is the beneficiary?
The beneficiary is the person with the disability who will receive the financial benefits from the RDSP.

Eligibility

To be eligible as an RDSP beneficiary, a person must:

Qualify for the Disability Tax Credit (DTC)

Be under the age of 60

Reside in Canada

Have a valid Social Insurance Number (SIN)
A person may qualify for the DTC if they have a significant and long-lasting physical or mental impairment. A medical practitioner must complete Form T2201 (Disability Tax Credit Certificate), which must then be reviewed and approved by the Canada Revenue Agency (CRA). The review typically takes up to 8 weeks. See the CRA website for current processing times.

If someone wants to set up an RDSP but hasn’t yet applied for the DTC, they’ll need to wait for approval before receiving any government grants or bonds. The plan can be opened in the meantime, but no funding from the government will be issued until DTC eligibility is confirmed.
No. A beneficiary is only allowed to hold one RDSP at any time. That said, it’s possible to transfer the RDSP from one financial institution to another. The new RDSP will remain inactive until the original account is closed.
No. An RDSP can only name one beneficiary, who remains the same for the life of the plan.

RDSP Account Holder Information

The following individuals or entities can be account holders:

A beneficiary who is the age of majority and legally competent

A legal parent, guardian, or someone authorized to act for the beneficiary

A government body with legal authority to act on behalf of the beneficiary

A qualifying family member (parent, sibling, spouse, or common-law partner), if the beneficiary’s legal capacity is in question – this provision remains in effect until the end of 2026
Yes. An RDSP can be opened up until December 31st of the year in which the beneficiary turns 59. Government matching ends at age 49.
Yes. If the beneficiary is a minor, both parents can jointly hold the plan. Once the beneficiary becomes an adult, they can be added as a joint holder alongside a parent.
Yes, provided the parent has legal authority (e.g., guardianship). Budget 2012 introduced a provision allowing a "qualifying family member" to open an RDSP for a beneficiary with questionable capacity. This rule is in place until the end of 2026, though the holder can continue beyond that if already established.
Yes. One parent can act alone as the holder or in partnership with the other parent or the beneficiary. If the beneficiary is a minor and the holder isn't the recipient of the Canada Child Benefit (CCB), the CCB recipient must still be listed as the primary caregiver.
Yes. A legally authorized representative, such as a guardian, can manage the RDSP. Qualifying family members may also act as holders when the beneficiary’s mental capacity is in question.

Special Situations

It refers to the year a medical professional certifies in writing that the beneficiary has a life expectancy of five years or less.
Withdrawals can either be made as a lump sum or distributed over five years. However, any withdrawals will trigger a clawback of the Assistance Holdback Amount (AHA).
An SDSP is a special designation for RDSPs where the beneficiary is expected to live five years or less, as confirmed by a physician. Withdrawals from an SDSP are exempt from AHA repayments if annual taxable withdrawals stay under $10,000. Once designated, no new contributions, grants, or bonds can be added.

Contributions & Investment Options

Anyone may contribute with the written consent of the account holder.
A lifetime cap of $200,000 applies to all RDSP contributions for a beneficiary. There is no annual limit, but contributions must stop by the end of the year the beneficiary turns 59.
Contributions can be made until the earliest of the following:

The beneficiary’s death

December 31 of the year the beneficiary turns 59

When $200,000 in total contributions has been reached

Loss of DTC eligibility

When the beneficiary is no longer a Canadian tax resident
Yes, if the account holder consents in writing, RDSP Connect allows pre-authorized contributions (PACs) and third-party cheques. The holder is responsible for tracking contributions to stay within the limit and maximize matching grants.
No. However, the investments grow tax-deferred while inside the plan.
Yes, since July 1, 2011, such transfers are permitted if the beneficiary was financially dependent on the deceased. These contributions do not attract grants or bonds and are taxed upon withdrawal.
RDSPs can hold the same types of qualified investments as RRSPs or RESPs, such as mutual funds, stocks, bonds, GICs, and more. Mackenzie RDSPs can invest in Mackenzie mutual funds.
As of January 1, 2014, RESP accumulated income can be rolled over into an RDSP if eligible under the Accumulated Income Payment (AIP) rules. The original contributions are returned to the subscriber and can be contributed to the RDSP to access new grants. The AIP amount transferred is not eligible for matching grants.
Yes. RDSP Connect allows in-kind transfers of its mutual funds from non-registered accounts into RDSPs. However, this is considered a taxable event.
Yes. Transfers are allowed, though the new RDSP will be on hold until the original one is fully closed. Grants and bonds can only be requested after the transfer is complete.

Withdrawals & Taxation

Lifetime Disability Assistance Payments (LDAPs): These are recurring annual payments that start no later than the year the beneficiary turns 60 and continue until the plan is depleted or the beneficiary passes away.

Disability Assistance Payments (DAPs): These are one-time lump sum withdrawals and can occur at any time after the RDSP is opened.
Withdrawals contain a mix of contributions, investment earnings, and government grants/bonds. Only the non-contribution portions (e.g., grants, bonds, earnings) are taxable to the beneficiary. Special tax rules apply to RRSP, RRIF, RPP, or RESP rollovers.
If any grant or bond was received in the last 10 years, withdrawing from the RDSP will require repayment at a 3:1 ratio—$3 back to the government for every $1 withdrawn.
No. Only the grant and bond amounts are reclaimed. Investment gains remain in the RDSP.
At age 60, the beneficiary must begin receiving LDAPs. The amount is calculated using a standard formula.
For plans where most funds came from the government (Primarily Government-Assisted Plans or PGAPs), the maximum is the greater of 10% of the plan’s fair market value at year-start or the LDAP formula amount.

Impact on Other Benefits and Special Circumstances

No. Payments made from an RDSP do not impact eligibility for income-tested federal benefits, including:

Old Age Security (OAS)

Guaranteed Income Supplement (GIS)

GST/HST Credit

Federal and provincial social assistance programs

Most provinces and territories also exclude RDSP income and assets when assessing eligibility for provincial benefits. However, a few may apply income or asset limits, so it’s advisable to verify based on local regulations.
If the beneficiary dies, the RDSP must be closed by December 31st of the following year. Any grant or bond received in the 10 years prior to the beneficiary’s death must be repaid to the government. While contributions are not taxed, any income, grants, and bonds remaining in the plan are taxable to the beneficiary’s estate. The final distribution of the RDSP assets follows the instructions in the beneficiary’s will or, if no will exists, according to provincial intestacy laws.
If someone other than the beneficiary is the account holder and passes away, control of the RDSP typically shifts to their executor, who manages the account until a new qualified person—such as a legal guardian or qualifying family member—is assigned. In cases with joint holders, the surviving holder retains control.
Since Budget 2019, an RDSP no longer needs to be closed if the beneficiary loses eligibility for the Disability Tax Credit. The account can remain open, but no new contributions, grants, or bonds will be permitted, nor will any carry-forward amounts apply. This change helps protect savings and avoids forced repayments of previously received benefits.
If the holder (and not the beneficiary) becomes mentally incapable of managing the RDSP, then control of the account may pass to a Power of Attorney or legal representative acting on their behalf.