Welcome. You are in the right place. This page is for Canadians with disabilities and the families who love them. It uses short sentences and plain words. Talking to Sean is always free.
This is the Easy Read version of our RDSP guide. It says the same things as the full guide. Read the full RDSP guide if you want more detail, or use the free tools on that page.
The short version
- The Disability Tax Credit (DTC) is the key. It is a tax credit. It opens the door to everything on this page.
- The RDSP is a savings plan. The government can add up to $90,000 of its own money over your lifetime.
- The bond needs no money from you. If your income is lower, the government puts it in for you.
- Life insurance is still possible with a disability. Some plans ask almost no health questions.
Words on this page
- RDSP means Registered Disability Savings Plan. It is a savings plan for a person with a disability.
- DTC means Disability Tax Credit. It is a tax credit from the Government of Canada. A tax credit lowers the tax you have to pay.
- Grant means money the government adds to your RDSP when you put money in.
- Bond means money the government puts into your RDSP even if you put nothing in.
- Beneficiary means the person with a disability. The plan is for this person.
- Holder means the person who opens the plan and looks after it.
What is an RDSP?
An RDSP is a savings plan for the long term. It helps a person with a disability save money for the future.
You or your family put money in. The money can grow over time. The government can add a lot of money on top. It adds this money with grants and bonds.
That government money makes the RDSP one of the strongest savings plans in Canada. But not many people know about it.
Who can get an RDSP?
The person the plan is for must meet 4 rules. The person must:
- Be approved for the Disability Tax Credit (DTC)
- Live in Canada
- Have a Social Insurance Number
- Be under 60 years old
If the person does not have the DTC yet, that is where we start. Book a free talk with Sean and we will plan the steps together.
The Disability Tax Credit is the key
The Disability Tax Credit is a tax credit for people in Canada who have a severe disability that lasts a long time.
The credit lowers the tax you pay. It also opens the door to the RDSP. Many families could get this credit but never apply. The form can look hard. It does not have to be.
You apply for the DTC on the Government of Canada website. Then you can book a free talk with Sean to learn what your approval opens up: the RDSP, the grants, and the bonds.
Apply on the Government of Canada Website
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The grant: money the government adds when you save
A grant is money the government adds to your RDSP when you put money in. This grant is called the Canada Disability Savings Grant.
The grant can be up to $3,500 in one year. It can be up to $70,000 in a lifetime.
How much you get depends on your family income. If your income is lower, the grant match is bigger. For each $1 you put in, the government can add up to $3.
If you did not use your grant room in past years, you do not lose it. Unused grant room moves forward to later years. Starting late does not mean you miss out on all of it.
The bond: money you do not have to save first
This surprises almost everyone: the bond needs no money from you at all. If you qualify, the government puts the bond into your RDSP itself.
The bond is called the Canada Disability Savings Bond. It is for people with lower incomes.
The bond can be up to $1,000 in one year. It can be up to $20,000 in a lifetime. You do not have to put any money in to get it.
Grants and bonds together can add up to $90,000 of government money in one RDSP over a lifetime.
When does the government money stop?
Grants and bonds stop at the end of the year the person turns 49.
You can keep putting your own money in until the end of the year the person turns 59.
Anyone can put money into a person's RDSP if the holder says yes. Grandparents can put money in too. Money that family members put in can still bring grant money, up to the limits.
Life insurance for people with disabilities
Many people with disabilities get told no when they apply for life insurance. That no is not the end of the story.
Some plans ask no health questions at all. These plans are called guaranteed issue plans. If you are in the right age range and you apply, you are approved.
Some plans ask only a short list of health questions. These plans are called simplified issue plans. Many people who fail the full health check pass this short list.
These plans have a trade-off. They cover smaller amounts of money. They cost more for each dollar of cover. But a smaller plan that is real is better than a perfect plan you cannot get.
Parents in Ontario can also use something called a Henson trust. A Henson trust is a way to leave money for a child with a disability after you die. The money in the trust does not stop the child's disability benefits. Life insurance is often the money that fills the trust.
Worth knowing: every family is different. The right plan depends on your province, your disability, and your family. This page is for learning. It is not advice. Talk it through with Sean, free, and get answers for your own life.
Can I have an RDSP and ODSP at the same time?
Yes. Many people worry about this. The answer is good news.
ODSP is Ontario's disability support program. An RDSP does not lower ODSP payments. An RDSP does not count in the ODSP asset limit. The same kind of rule protects most disability benefits in other provinces too.
Is the RDSP only for children?
No. This idea costs families real money.
Adults can open an RDSP too. A person can open one until the end of the year they turn 59. Many adults open their first RDSP in their 30s, 40s, or 50s. Parents can open one for an adult child.
Common questions
How does an RDSP work?
You open the plan. You or your family put money in. The government may add grant and bond money on top. The money inside can grow. Later in life, money you take out adds to your disability income.
How much money does the government put in?
Up to $3,500 a year in grants, and $70,000 in a lifetime. Up to $1,000 a year in bonds, and $20,000 in a lifetime. Together, the most the government can add is $90,000. How much you get depends on your income and on how much you put in.
When do grants and bonds stop?
Grants and bonds are paid until the end of the year the person turns 49. You can put your own money in until the end of the year the person turns 59.
Can grandparents put money in?
Yes. Anyone can put money into a person's RDSP if the holder says yes. That money can still bring grant money, up to the limits.
What happens if I lose my DTC approval?
The rules here are tricky. They depend on timing. This is worth a real talk, not a quick answer. Ask Sean directly, free.
Does it cost money to talk to Sean about my RDSP?
No. Every talk is free. You do not have to figure this out alone. Sean is here to help you through every step.
See where you stand, free: check if you may qualify for the DTC in about a minute, check if you are ready for an RDSP, then see what the plan could grow to with grants, bonds, and time.
More Easy Read guides
These guides are also in Easy Read:
- ADHD and the Disability Tax Credit, in plain words
- Autism and the Disability Tax Credit, in plain words
- The Canada Disability Benefit, in plain words
- Learning disabilities and the Disability Tax Credit, in plain words
- RDSP and RESP together, in plain words
See all of them on the Easy Read page. Or read the full RDSP guide with all the guides and tools in one place.