Question: How do I know if I can have a Registered Disability Savings Plan (“RDSP”)? Will it affect my payments under the Ontario Disability Support Program (“ODSP”)?
Answer: Any Canadian resident under the age of 60 and who qualifies for the federal Disability Tax Credit is permitted to have an RDSP. An RDSP has a $200,000 lifetime contribution limit; however, there is no annual contribution limit. There are no restrictions on when the funds can be withdrawn or for what purpose they can be used once withdrawn. The supplemental grants and bonds provided by the Government of Canada are only available until age 49 and only if certain conditions are met.
Withdrawals from an RDSP must begin at age 60. There are minimum and maximum withdrawal amounts which are based upon various formulas. For example, the amount, generally monthly, is based on how much is in the plan when withdrawals are to begin and the life expectancy of the beneficiary.
For ODSP purposes, RDSPs are fully exempt and are not considered income or an asset. Withdrawals are not considered income by ODSP; however, once the withdrawal is received by the beneficiary, the $5,000 asset limit would then apply.
