Registered Disability Savings Plan (RDSP)

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If youalready qualify for the disability tax credit, you can claim this plan

automatically. 

If you have never applied for the credit, you can apply for it, but if you don't

get approved, you cannot open this kind of plan.

 

Families and friends of people with a severe disability got an early Christmas

gift this year.

 

The government has introduced a new program that takes effect as of December 1

to help families and friends to secure a financial future for severely disabled

loved ones.  Under the new Registered Disability Savings Plan (RDSP), you would

contribute $1,500 a year and the government would contribute up to a maximum of

$3,500, depending on the net income of the beneficiary's family.  The government

would also contribute up to $1,000 annually in Canada Disability Savings Bond

depending on the net income of the beneficiary's family.  Contributions are

limited to a lifetime maximum of $200,000, with no annual limit.

 

Changes to  Ontario 's social assistance rules have also been made to make sure

that both RDSP assets and withdrawals are fully exempt.  This means that our

loved ones' social assistance payments will not be affected by RDSP

contributions.

 

There are eligibility criteria for the RDSP, one being that the beneficiary must

be eligible for the Disability Tax Credit.  Do not assume that just because your

relative is receiving a disability pension or allowance that he/she qualifies

for the program.  Canada Revenue Agency has a form (see link below) that needs

to be completed and approved before an individual qualifies for the Disability

Tax Credit; the form includes a self-assessment questionnaire to help you

determine whether your loved one would qualify.

 

If you do qualify for the Registered Disability Savings Plan and wish to take

advantage of it in 2008, hurry to your bank, there's not much time before

December 31 to start building the nest egg.

 

Read more about the RDSP at the following

site:  http://www.mcss.gov.on.ca/mcss/english/news/releases/081130.htm.  At the

end of this press release, there are links for more information on the RDSP, and

to Canada Revenue Agency for the Disability Tax Credit application form.

 

As well, in addition to this new program, the government has increased the

amount that families can help their relative as a gift or payment from a trust

from $5,000 to $6,000 a year.  Wonderful news!

 

All in all, the new RDSP, dubbed the 'peace of mind' plan, offers hope to

families because we can take steps now to secure our loved ones' financial

future, definitely some peace of mind for when we're gone and no longer able to

help them ourselves.