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RDSPs: Free government money going to waste Almost half a million Canadians are letting money go to waste by not opening a Registered Disability Savings Plan.
Posted November 07, 2013

Imagine turning away $90,000! The funds in question are available to people with disabilities through a Registered Disability Savings Plan (RDSP.)

Sadly, only 14 percent of 500,000 eligible Canadians have applied for this free money by opening an RDSP account. Many are concerned that their disability benefits will be reduced or eliminated. However, virtually all the provinces and territories have agreed that receiving grants or bonds through the RDSP will not affect disability payments.

In order to be eligible for a RDSP the individual must qualify for the Canada Revenue Agency’s (CRA) Disability Tax Credit (DTC), which certifies that the person has a severe and ongoing disability. Form T2201has two parts; one is to be filled out by the applicant (or parent, guardian or caregiver) and the other by a health practitioner such as a doctor, psychologist or audiologist.

Once the DTC is approved by the CRA the recipient is eligible for an additional tax credit of $7,546 (2012) called the Disability Amount (line 316) if the beneficiary is over 18. It can be transferred from a dependent to a parent, spouse or common-law-partner. The DTC also makes one eligible for a refundable medical expense supplement for those with low income and high medical expenses.

Additionally, there is an under-18 tax credit of $4,402, which may be claimed by a parent or caregiver depending on other expenses such as attendant care.