If you or a family member qualifies for the Disability Tax Credit, then you should probably also be taking advantage of the RDSP - the Registered Disability Savings Plan.
This new plan was designed to offer a way to provide long-term private funding to people with disabilities. It was initially conceived by Canadian parents of special needs children who wanted to be able to put money aside for their children's adult years, in addition to an education savings account.
After a LOT of lobbying to the federal government, and after several years in planning, the Registered Disability Savings Plan was finally introduced by the Canadian government in 2008.
The next lobbying efforts have been aimed at provincial governments. Typically, provincial governments treat disability payments as a type of welfare - meaning that recipients can only receive money if they prove they're truly destitute.
In the case of people with disabilities, recipients often qualify for benefits and special funding for equipment, but only if certain conditions are met.
The hope is that provincial disability payments and benefits would not be clawed back by amounts that are received from the disability savings plan - otherwise what would be the point? Losing the ability to have a motorized wheelchair, for instance, could mean the difference between being mobile or being stuck at home or in an institution.
Luckily, provincial governments are slowly coming on board, and a number of provinces have already decreed that the RDSP payments won't result in a clawback of other payment.
The RDSP is an ambitious project, and long overdue. But, the way it was designed is fairly complex. So, I'm gathering together information to try and help you sort things out, as well as giving you the links to the 'official' information of the Registered Disability Savings Plan.
You'll also see ongoing news as it evolves and even have a chance to share stories of your experiences too - so stay tuned. Be sure to bookmark this page, or subscribe to this site to stay on top of the RDSP developments. To start you off, here are the key official sites for the RDSP:
From the folks in the tax department, here's the official RDSP information from the Canada Revenue Agency. They are responsible for all aspects of the plan that relate to income tax, as well as determining who qualifies for the RDSP in the first place.
To do that, the person has to have qualified for the all-important Disability Tax Credit. It generally takes months to apply and receive this credit, so be sure to leave yourself lots of time to apply and also to renew every 6 years or so (they'll send you a notice to renew).
The other important federal agency you need to know about is the department that actually administers the plan details for the government and hands out the money to plan holders - Human Resources and Skills Development Canada. They are the department that approves the financial institutions that want to offer the RDSP and they also are responsible for making sure that everybody involved is following the Canada Disability Savings Plan Act.
It's also a good idea to have the official information guide from the Canada Revenue Agency for the RDSP. It's the best way to understand the official legalese about what the plan is all about.
But, if you want to see the official legalese too, you can. The CANADA DISABILITY SAVINGS ACT was published officially in the Canada Gazette,but recent updates to their website have made it inaccessible.
Now, you can see the official original legislation (Canada Disability Savings Act, S.C. 2007, c. 35, s. 136) from the Canadian Legal Information Institute as well as the last update (SOR/2008-186), which includes additional clarification of terms.
Lastly, and importantly, the official reference to the RDSP for tax purposes is in theIncome Tax Act, Section 146.4. If you have any questions about the tax side of things, this is the ultimate destination for answers.
As I write this, in February 2009, the RDSP is only officially available to actually open in two institutions. You can open a Bank of Montreal RDSP and the Les Fonds d'investissement FMOQ inc. is offering the RDSP to Quebec residents.
That doesn't make it easy however.
We were told today that the process takes about two weeks for new customers, so don't delay.
In Quebec, the RDSP is referred to in French: régime enregistré d'épargne-invalidité (REEI), but the FMOQ did an even better job of hiding information about it, other than their press release, which says:
For more information on the RDSP, it is possible to contact an advisor of the Company Investment Fund FMOQ inc. Montreal [514 868-2081 or toll free 1 888 542-8597] or Quebec [418 657-5777 or toll free 1 877 323-5777].
I'd love to hear about your thoughts and experiencesyour experiences in trying to set up an RDSP at any financial institution.
Over the course of 2009, other financial institutions are likely to get on board with offering the RDSP as well, so be sure to check our RDSP news page for the latest information. You'll be able to add news tips too, or comment on any news item you see, so join the conversation!
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