Insurance, Investments and Group Benefits

Planning for long-term financial security can feel daunting. But for Canadians with disabilities, and their families, there’s a powerful savings tool designed to help you reach your financial goals. It’s called a Registered Disability Savings Plan (RDSP).

Nearly two in three eligible Canadians have not yet opened an RDSP.¹ This means they’re missing out on valuable government benefits that can make a huge difference for the future.

If you or a loved one is a person with a disability, an RDSP can help provide financial security and peace of mind. Let’s explore what it is and how it can work for you. 

What is a Registered Disability Savings Plan (RDSP)? 

Think of an RDSP as a special long-term savings plan designed to help Canadians with disabilities, who are approved for the Disability Tax Credit, save and invest for their future. It's similar to other registered plans in that you can choose to invest your savings in a variety of financial products and any investment growth inside your RDSP is tax-sheltered. 

But here’s what makes an RDSP unique: it may also be eligible for generous grants and bonds from the Government of Canada to help your savings grow even faster. Anyone can contribute to the plan—including family and friends—with the holder's permission, up to a lifetime maximum of $200,000. There are no annual contribution limits. 

Lifetime financial benefits of a Registered Disability Savings Plan2
$70,000 Canada Disability Savings Grant	$20,000 Canada Disability Savings Bond3	$90,000 Total of grants and bonds available	$200,000 Lifetime contribution amount4	Plus tax-sheltered investment growth within your RDSP
2 Maximum amounts available, if eligible.3 If eligible, based on family net income.4 Lifetime contribution amount for private contributions, which are any contributions not made by the Government of Canada. Rollovers from specified retirement plans and RESPs are considered as part of the lifetime contribution amount.

Who’s who of an RDSP

The key stakeholders of an RDSP are the holder and the plan beneficiary. An RDSP can only have one plan beneficiary but can have one or more holders. The plan beneficiary can also be a holder in certain circumstances. When getting ready to apply for an RDSP, you'll need to determine whether the plan beneficiary should also be the holder; in some cases, it may be a requirement.

Plan beneficiary  The person with a disability that the RDSP is set up for and who will receive the financial benefits of the plan in the future. The plan beneficiary can also be a holder.	Holder(s)  The individual(s) or entity who opens and manages the RDSP, including managing investments and withdrawals.

Are you eligible? A quick checklist
The first step is that the plan beneficiary must be approved for the Disability Tax Credit (DTC) by the Canada Revenue Agency. Beyond that, the eligibility criteria are straightforward.
Registered Disability Savings Plan eligibility criteria
Approved for the Disability Tax Credit (DTC)	Be a Resident of Canada	Age 59 or less on December 31 of the year applied in	Have a valid Social Insurance Number (SIN)

Take advantage of government grants and bonds 

This is one of the most important benefits of an RDSP. The government can deposit money directly into your RDSP through grants and bonds, which are available until the plan beneficiary turns 49. 

The Canada Disability Savings Grant (CDSG) 

The grant is money the government deposits to match contributions made to the RDSP. The amount is based on contributions and the plan beneficiary's family net income.⁵ To get the maximum annual grant, you need to contribute $1,500 in a year.⁶ The government can contribute up to a lifetime maximum of $70,000 in grants. 

Canada Disability Savings Grant

Annual grant limit of $3,500 Lifetime limit of $70,000 Annual limit and carry forward of $10,500 Contributions are required to receive grants

Here’s a chart summary of the CDSG: 

Tip! Contribute $1,500 annually to get the maximum amount of grant for the year.6

The Canada Disability Savings Bond (CDSB) 

The bond is designed to help low- and modest-income Canadians. The best part? No contributions are required to receive the bond. If you're eligible based on your family net income,⁵ the government will automatically deposit bonds into your RDSP. The government can contribute up to a lifetime maximum of $20,000 in bonds.  

Canada Disability Savings Bond

Annual bond limit of $1,000 Lifetime limit of $20,000 Annual limit and carry forward of $11,000 No contributions are required to receive bonds  Income must be within levels for low- and modest-income set by the government

Here’s a chart summary of the CDSB: 

Getting started with an RDSP

An RDSP can be a life-changing tool for creating long-term financial security for Canadians with disabilities. If you think an RDSP is right for you, or your loved one, speak with your advisor. They can help you understand your options and guide you through the application process. With Empire Life, you and your advisor can complete the entire application online.

Don't miss out on the benefits you may be entitled to. Take the first step toward empowering your financial future today with Empire Life’s RDSP. 

¹ Source: Employment and Social Development Canada. Canada Disability Savings Program: 2023 Annual Report, Table 6: Historical RDSP take-up rate, Canada (2014 to 2023).
⁵ The plan beneficiary’s family net income is based on their age and is determined from tax returns filed with the Canada Revenue Agency (CRA) for the two years prior to the current year. Until the end of the year the plan beneficiary turns 18, family net income is the combined income of the plan beneficiary’s parents or guardians. At the beginning of the year the plan beneficiary turns 19, family net income is the plan beneficiary’s income plus their spouse’s or common-law partner’s income, if any. Income thresholds are indexed annually by the Canada Revenue Agency. 
⁶ Applies to lower income threshold for family net income. If income is in the higher income threshold, then a contribution of $1,000 annually would be eligible for the maximum amount of grant for the year. 

Segregated Fund contracts are issued by The Empire Life Insurance Company (“Empire Life”). A description of the key features of the individual variable insurance contract and the RDSP are contained in the Empire Life GIF Information Folder and the Empire Life Disability Savings Plan Trust Agreement. Any amount that is allocated to a Segregated Fund is invested at the risk of the contract owner and may increase or decrease in value. Please read the information folder, contract and fund facts before investing. Performance histories are not indicative of future performance. 

This document reflects the views of Empire Life as of the date published. The information in this document is for general information purposes only and is not to be construed as providing legal, tax, financial or professional advice. The Empire Life Insurance Company assumes no responsibility for any reliance made on or misuse or omissions of the information contained in this document. Please seek professional advice before making any decision.

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