The Registered Disability Savings Plan (RDSP)

1. The Registered Disability Savings Plan (RDSP)

2. Agenda • The Registered Disability Savings Plan • Understanding RDSP 3) RDSP Eligibility Requirements 4) Disability Tax Credit 5) Apply for Disability Tax Credit 6) Applying for RDSP 7) Resources 8) Questions

3. Legal Information not Legal Advice • This presentation contains general legal information • The law, programs/policies can vary • This presentation is not a substitute for legal advice • If you have a question or problem, please contact us, your local legal clinic or a lawyer

4. The Registered Disability Savings Plan The Registered Disability Savings Plan (RDSP) helps Canadians with disabilities and their families save for the future.

5. Understanding RDSP • The RDSP is a long-term savings plan to help Canadians with disabilities and their families save for the future. • The "beneficiary” of the RDSP is the person who will receive the money in the future. • Anyone can contribute to an RDSP if they get the written permission of the RDSP holder (the person or organization that opens and manages the RDSP). • There is no annual contribution limit to the RDSP, but there is a lifetime contribution limit of $200,000.

6. Understanding RDSP • The deadline for contributions each year to an RDSP is December 31 of that year. • As of July 2011, the proceeds from a deceased parent’s or grandparent’s Registered Retirement Savings Plan, Registered Retirement Income Fund and Registered Pension Plan can be rolled over into the RDSP of a financially dependent child or grandchild with a disability. • Earnings accumulate tax-free, until money is taken out of the RDSP. • To encourage savings, grants and bonds must remain in the RDSP for at least 10 years.

7. Understanding RDSP • There is no impact on federal benefits, such as the Canada Child Tax Benefit, the Goods and Services Tax Credit, Old Age Security, and Employment Insurance. • In all provinces and territories, RDSPs will have little or no impact on social assistance payments (see RDSP and Provincial and Territorial Benefits). • To open an RDSP and apply for the grant and bond, contact one of the participating Financial Organizations.

8. Understanding RDSP • To help you save, the Government pays a matching grant of up to $3,500, depending on the amount contributed and your family income. • The Government also pays a bond of up to $1,000 a year into the RDSPs of low-income and modest-income Canadians. • Grants and bonds are paid until the year the beneficiary turns 49. • As of January 2011, you are allowed to carry forward unused grant and bond entitlements for a 10-year period preceeding the opening of the plan (starting from 2008, the year RDSPs became available).

9. RDSP Eligibility You should consider opening a Registered Disability Savings Plan (RDSP) if you have a long-term disability and are: * under age 60, * a Canadian resident with a Social Insurance Number (SIN), * eligible for the Disability Tax Credit (Disability Amount) and * looking for a long-term savings plan.

10. Disability Tax Credit (DTC) • The disability amount is a non-refundable tax credit that a person with a severe and prolonged impairment in physical or mental functions can claim to reduce the amount of income tax he or she has to pay in a year. This amount includes a supplement for persons under 18 years of age at the end of the year. If you are eligible for the disability tax credit (DTC), you may be able to claim the disability amount on your income tax and benefit return. To be eligible for the DTC, you need to be approved for: Form T2201, Disability Tax Credit Certificate

11. How to apply for the Disability Tax Credit (DTC) • First, complete Part A of Form T2201, Disability Tax Credit Certificate. Then, take the form to a qualified practitioner. • When the qualified practitioner has completed and signed Part B of Form T2201, send it to the appropriate tax centre.

12. Opening an RDSP • To open a Registered Disability Savings Plan (RDSP) you need to: * Step 1: Identify the beneficiary * Step 2: Identify the RDSP holder * Step 3: Contact a financial organization

13. Step 1: Identify the beneficiary • The beneficiary of the RDSP is the person who will receive the money in the future. The beneficiary must: * be under 60 years old, * be a Canadian resident, * be eligible for the Disability Tax Credit (Disability Amount), and * have a Social Insurance Number (SIN) • There can only be one beneficiary per RDSP, and only one RDSP per beneficiary.

14. Step 2: Identify the RDSP holder • The holder of the RDSP is the person or organization that opens and manages the RDSP. * For beneficiaries under the age of majority, the holder can be a legal parent, legal representative or public department. * For beneficiaries over the age of majority, the holder is generally the beneficiary. In certain circumstances, a guardian, legal representative or public department may be eligible to become the holder. • Note: The age of majority varies across provinces and territories.

15. Step 3: Contact a financial organization • Several financial organizations offer the RDSP, grant and bond. To open an RDSP and apply for the grant and bond, complete a registration form at one of the participating Financial Organizations.

16. Government Resources Legislation: The ODSP & OW Acts and Regulations are located on-line (click on “+” sign beside the Act to access the regulations) http://www.e-laws.gov.on.ca/navigation?file=home&lang=en OW and ODSP Policy Directives: http://www.mcss.gov.on.ca/en/mcss/programs/social/directives/index.aspx OW and ODSP Overviews: http://www.mcss.gov.on.ca/en/mcss/programs/social/index.aspx

17. Government Resources Human Resources and Skills Development Canada (RDSP): http://www.hrsdc.gc.ca/eng/disability_issues/disability_savings/index.shtml Canada Revenue Agency (RDSP): http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/rdsp-reei/menu-eng.html

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