RDSP

RDSP is the new Registered Disabiity Savings Plan which has been set up as a tax-free plan to help parents save for the long-term needs of their children who have severe disabilities.

The children have to be under the age of 18 and the federal contributions are scaled to the income of the family. For a family earning less then $75,769 year year the Canadian Disability Savings Grant will contribute $3 for every $1 contributed on the first $500. It then puts in $2 for every $1 on the next $1,000.

If the family earns more then $75,769 then the grant is a matching $1 for every $1 that the family puts in up to $1,000.

For the lower income earning families with income less then $21,287 the Canadian Disability Saving Bond puts $1,000 into the plan each year without the family having to contribute from their own funds.

Once the child reaches 18 eligibility for the grants is determined by that person's income only.

The grants have a limit of $200,000 with government grants and bonds are paid intothe plan until the original child turns 49.

The money cannot be withdrawn in the first 10 years or the grant portion is returned to the government.