Overview
The Registered Disability Savings Plan (RDSP) is one of the most underused programs in Canada. It is specifically designed to help Canadians with disabilities and their families build long-term financial security — and the federal government contributes free money through two programs:
- Canada Disability Savings Grant (CDSG): Up to $3,500 per year in matching grants, depending on family income and contribution amount
- Canada Disability Savings Bond (CDSB): Up to $1,000 per year for low-income families — no contribution required to receive the bond
Over a lifetime (up to age 49 when grants/bonds stop), a beneficiary could receive up to $70,000 in grants and $20,000 in bonds — $90,000 in free government money — plus growth on all of it, tax-sheltered inside the plan.
Do I Qualify?
- The beneficiary has been approved for the Disability Tax Credit (DTC) — apply using Form T2201 signed by a qualified medical practitioner
- The beneficiary is a Canadian resident
- The beneficiary has a valid Social Insurance Number
- The beneficiary is under age 60
Grants and bonds are available until the end of the year the beneficiary turns 49; the account can remain open until 60. A parent, guardian, or the individual themselves can open the RDSP.
Government Contributions
Canada Disability Savings Grant (CDSG)
| Family Net Income (2024) | On first $500 contributed | On next $1,000 contributed | Max annual grant |
|---|---|---|---|
| ≤ $106,717 | 300% match ($1,500) | 200% match ($2,000) | $3,500 |
| > $106,717 | 100% match ($1,000) | — | $1,000 |
To get the maximum $3,500 grant, contribute $1,500 for lower-income families.
Canada Disability Savings Bond (CDSB)
| Family Net Income (2024) | Annual Bond |
|---|---|
| ≤ $35,999 | $1,000 |
| $36,000–$55,879 (approximate) | Partial amount (pro-rated) |
| > $55,879 | $0 |
No contribution is required to receive the Bond. Low-income families simply open the account and the government deposits the bond automatically.
Catch-Up Grants and Bonds
If the RDSP was not opened for years when the beneficiary was eligible, past grants and bonds can be claimed going back to 2008 or to the year the beneficiary turned 18 (whichever is later), up to 10 years back. A single large contribution can trigger multiple years of catch-up grants.
The 10-Year Holdback Rule
This is the critical caveat: if you withdraw from an RDSP within 10 years of receiving a grant or bond, the government clawback requires you to repay $3 for every $1 withdrawn (of grant/bond amounts received in the past 10 years). This makes early withdrawals very costly. The RDSP is genuinely a long-term savings vehicle — plan accordingly.
What Most People Don’t Know
- The bond requires no contribution from you — many low-income families simply open the account and collect $1,000/year doing nothing else.
- Family income, not the beneficiary’s income, determines grant/bond amounts for beneficiaries under 18. After 18 (or marriage/common-law partnership), it’s the beneficiary’s own income that counts.
- Growth is tax-sheltered — all investment income inside the RDSP grows tax-free until withdrawal, at which point only the grant, bond, and growth portions are taxable as income of the beneficiary (usually at a lower rate).
- The DTC application is worth it on its own — even if you don’t open an RDSP, the DTC provides a substantial non-refundable federal tax credit (worth roughly $1,500+ in tax savings per year). Getting DTC-certified also opens the door to the RDSP.
- Successor holders can be named to take over the RDSP after the plan holder’s death, avoiding potential disruption to the plan.
- RDSP funds can be invested in GICs, mutual funds, ETFs, and other assets — they are not limited to savings accounts.
Frequently Asked Questions
Does the Canada Disability Savings Bond require any contribution from me to be paid into the RDSP?
No. The Canada Disability Savings Bond is paid automatically to eligible low-income families simply for having an open RDSP — no personal contribution is required at all. Families with net income below approximately $36,000 can receive up to $1,000 per year in bonds just by opening the account and filing a tax return.
What happens to the government grants and bonds if I need to withdraw money from the RDSP early?
The 10-year holdback rule requires repayment of $3 for every $1 withdrawn (up to the total grants and bonds received in the past 10 years). This makes early withdrawals very costly and is why the RDSP is designed as a long-term savings vehicle. Plan all contributions and withdrawals with the 10-year lookback in mind.
Can I claim catch-up grants for years before I opened the RDSP, going back to when the beneficiary first qualified for the DTC?
Yes. You can claim retroactive grants and bonds going back to 2008 or to the year the beneficiary turned 18 (whichever is later), up to 10 years back. A single large contribution in the year you open the RDSP can trigger multiple years of catch-up grants — potentially $35,000 in grants in a single year if all prior years are claimed at once.
Whose income is used to calculate RDSP grants and bonds — the beneficiary’s or the family’s?
For beneficiaries under 18, the relevant family income is that of the beneficiary’s parents or legal guardians. Once the beneficiary turns 18 (or marries/enters a common-law relationship), their own income — and that of their spouse or partner — determines grant and bond eligibility. This often increases bond eligibility significantly for beneficiaries who have low personal income in adulthood.
Does the RDSP beneficiary need to maintain DTC eligibility for the entire life of the account?
If the beneficiary loses DTC eligibility before age 60, all grants and bonds received in the 10 years preceding the DTC loss must be repaid to the government if the account is closed or withdrawals are made. The account can remain open for up to five years after DTC loss in case eligibility is restored. Losing DTC eligibility after age 60 does not trigger repayment if no withdrawals are made.