Avoiding RDSP Pitfalls: The 10-Year Rule and Other Key Considerations

- Trish Makes It Simple

If you’ve got an RDSP—or you’re thinking about opening one—there’s a key detail you don’t want to miss: The 10-Year Rule. It’s one of the most misunderstood parts of the Registered Disability Savings Plan, and if you’re not careful, it could cost you thousands in government grants and bonds.

But don’t worry—I’ve got you covered. Let’s break it down in plain English.

What Is the 10-Year Rule?

The 10-Year Rule is part of the RDSP’s Assistance Holdback Amount (AHA) policy. It means that when you take money out of your RDSP, you may have to pay back some (or all) of the government contributions made over the last 10 years.

Yep—any Canada Disability Savings Grant (CDSG) or Canada Disability Savings Bond (CDSB) deposited within the previous 10 years before a withdrawal may have to be returned to the government. This is the AHA, and it’s the “repayable” portion if you withdraw too early.

Think of it like this: the government wants to support long-term savings. So if you take out money too soon, they’ll take back their recent contributions.

Example: If you take out money in 2025, any grants or bonds deposited from 2015–2025 could be repayable.

When Does the 10-Year Rule Matter?

The 10-Year Rule kicks in when:

• You withdraw funds from the RDSP,

• The beneficiary dies, or

• The plan is closed.

If the withdrawal happens after the 10-year window has passed, then the AHA won’t apply—and you keep all the grants and bonds.

This is especially important for Lifetime Disability Assistance Payments (LDAPs), which begin automatically by age 60 and are subject to strict withdrawal rules.

More on the official rules here:

CRA: RDSP Withdrawals

How to Avoid Repayments

Here are my top tips to protect those hard-earned grants and bonds:

1. Plan Ahead: Try to avoid any withdrawals within 10 years of receiving new grants or bonds. Track your deposit years—it matters!

2. Start Early: Open the RDSP as soon as the Disability Tax Credit (DTC) is approved. That way, the 10-year countdown starts sooner.

3. Watch the AHA: Know your Assistance Holdback Amount. Your financial institution can give you a breakdown of what’s repayable.

4. Withdraw Strategically: If a withdrawal is necessary, try to take out only what’s needed. You may be able to reduce the repayment amount.

Use LDAPs Wisely: Once LDAPs begin, they follow a formula that minimizes clawbacks. These are safer than one-time lump-sum withdrawals.

Why Understanding RDSP Rules Is So Important

The RDSP is one of Canada’s most generous financial tools—but it’s not a “set it and forget it” plan. It rewards planning, patience, and knowing how the rules work. The more you know, the more you get to keep—and the better your long-term financial picture looks.

If you’re not sure how this applies to your family’s situation, don’t be afraid to reach out. You deserve clear answers—and a strategy that protects every dollar you’ve invested.

Here’s a great government resource that explains the AHA and more:

ESDC: Grants & Bonds

Bottom Line?

The 10-Year Rule isn’t meant to trip you up—it’s just the government’s way of saying, “We’re in this for the long haul.” So let’s play the long game. A little knowledge goes a long way in making sure your RDSP works for you, not against you.

And as I always say: The RDSP isn’t just a savings plan—it’s a launchpad for long-term security and independence.

Let’s build that future, together.