canadian tax journal / revue fiscale canadienne (2009) vol. 57, no 2, 338 - 60
Personal Tax Planning
Co-Editors: Pearl E. Schusheim* and Gena Katz**
Planning wiTh RegisTeRed
disabiliTy savings Plans
The introduction of the registered disability savings plan (rdSP) represents a significant
development in facilitating the financial security of persons with disabilities. Commencing
in 2008, Canadians with severe and prolonged disabilities who are eligible for the
disability tax credit, or those who support them, can contribute up to $200,000 to an
rdSP. Tax on the accumulated income and gains is deferred as long as the funds are
held in the plan, and contributions can be supplemented through potentially generous
government assistance, in the form of the new Canada disability savings grants and
Canada disability savings bonds. Withdrawals are partially taxable in the hands of
the beneficiary and, in most cases, should not affect eligibility for provincial disability
benefits (depending on the province or territory of residence). rdSPs will play an
important role, in conjunction with standard disability trust planning, in securing the
financial future of disabled individuals in Canada.
KeywoRds: DisableD n tax planning n savings plans n grants n registereD Disability
savings plan n rDsp
* Of Couzin Taylor LLP, Toronto (allied with Ernst & Young LLP).
** Of Ernst & Young LLP, Toronto.
*** CIBC Private Wealth Management, Toronto (e-mail: email@example.com). I wish to
thank my colleagues Ann Elise Alexander and Aryeh Snitman of CIBC, Toronto, for their
valuable comments on earlier drafts of this article. Any errors or omissions are solely my own.
C o n T e n T s
What Is an rdSP?
Contributions to rdSPs
Annual Government Assistance
Canada disability Savings Grant
personal tax planning n 339
Registered disability savings plans (RdSPs) were introduced by the federal govern-