The Government Wants to Give You $90,000. Why You Are Missing Out on the 'RDSP'
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| The Government Wants to Give You $90,000. |
If I told you there is a savings account that guarantees a 300% return on investment instantly, you would think it is a scam.
It is not. It is the Registered Disability Savings Plan (RDSP), a federal program designed to help Canadians with disabilities save for the future.
The problem? Thousands of eligible Canadians (with Type 1 diabetes, ADHD, autism, or mental health issues) don't open one because they think "I'm not disabled enough." They are leaving up to $90,000 of free money on the table.
The Golden Key: Disability Tax Credit (DTC)
You cannot walk into a bank and open an RDSP. First, you need the "Golden Key": The Disability Tax Credit (Form T2201).
This is a certificate approved by the CRA. It is NOT just for people in wheelchairs. It covers anyone with a "severe and prolonged impairment" in physical or mental functions. If your doctor signs Form T2201 and the CRA approves it, the door to the RDSP opens.
Part 1: The Grant (Free Money for Contributors)
The Canada Disability Savings Grant (CDSG) is the magic sauce. Depending on your family income, the government matches your contributions aggressively.
💰 The 300% Match Example
If your family income is under ~$111,000 (2026 estimate):
- You contribute: $500.
- Government adds: $1,500 (300% match!).
- You contribute next: $1,000.
- Government adds: $2,000 (200% match).
Result: You put in $1,500, and you have $5,000 in your account. The lifetime limit for Grants is $70,000.
Part 2: The Bond (Free Money for Low Income)
What if you have no money to contribute? The government still helps through the Canada Disability Savings Bond (CDSB).
If your family income is modest (under ~$37,000), the government will deposit $1,000 per year into your RDSP automatically—even if you contribute $0.
- Lifetime Limit: Up to $20,000 totally free.
The Catch: The "10-Year Rule" & Age Limit
There are strict rules you must know:
- The Age Limit (49): The government ONLY pays Grants and Bonds until the end of the year you turn 49. If you are 50, you can open an RDSP, but you get no free money.
- The Proportional Repayment Rule: If you withdraw money, you must repay $3 of grants/bonds for every $1 you take out (looking back 10 years). It is no longer an "all or nothing" penalty, but early withdrawals are still costly.
Therefore, the RDSP is best used for long-term retirement savings (age 60+), not for short-term needs.
Conclusion
The RDSP is arguably the most generous savings vehicle in the world.
Do not assume you don't qualify. If you or your child has a condition that affects daily living, talk to your doctor about Form T2201 today. Once approved, go to the bank and collect your $90,000.
Disclaimer: This article is for informational purposes only. Income thresholds (indexed annually) and grant limits are subject to change by the CRA. Eligibility for the DTC is determined solely by the Canada Revenue Agency based on medical certification. Consult a financial advisor specialized in disabilities for personalized advice.
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