Canada disability savings grant and
Canada disability savings bond

Canada disability savings grant

A Canada disability savings grant (grant) is an amount that the Government of Canada contributes to an RDSP. The Government will pay matching grants of 300, 200, or 100 percent, depending on the beneficiary's family income and the amount contributed. The beneficiary's family income is calculated as follows:

• From birth to December 31 of the year the beneficiary turns 18, the beneficiary's family income is based on the income information used to determine the Canada child tax benefit (CCTB) for that beneficiary.
• Beginning the year the beneficiary turns 19 until the RDSP is closed, the beneficiary's family income is based on his or her income plus his or her spouse's, or common-law partner's income.

An RDSP can get a maximum of $3,500 in matching grants in one year, and up to $70,000 over the beneficiary's lifetime. A grant can be paid into an RDSP on contributions made to the beneficiary's RDSP until December 31 of the year the beneficiary turns 49.

The amount of the grant is based on the beneficiary's family income as follows:

*The beneficiary family income thresholds are indexed each year to inflation. The income thresholds shown are for 2011.

Canada disability savings bond

A Canada disability savings bond (bond) is an amount paid by the Government of Canada directly into an RDSP. The Government will pay bonds of up to $1,000 a year to low-income Canadians with disabilities. No contributions have to be made to get the bond. The lifetime bond limit is $20,000. A bond can be paid into an RDSP until the year in which the beneficiary turns 49.

The amount of the bond is based on the beneficiary's family income as follows:

*The beneficiary family income thresholds are indexed each year to inflation. The income thresholds shown are for 2011.

Starting in 2011, you are allowed to carry forward unused grant and bond entitlements to future years. The carry forward period can only start after 2007 and lasts for 10 years.

Human Resources and Skills Development Canada (HRSDC) administers the Canada disability savings grant and the Canada disability savings bond programs. HRSDC bases the amount of the grants and bonds that are available for any particular year on the beneficiary's family income for that year, as well as on matching rates.

See Example - How to carry forward unused grant and bond entitlements.

When do grants and bonds have to be repaid?

If any of the following events occur, all government grants and bonds paid into the plan during the preceding 10 years before the event must be repaid to the Government of Canada. Repayments are required when:

• the RDSP is terminated;
• the plan is deregistered;
• a disability assistance payment is made from the plan;
• the beneficiary stops being eligible for the disability amount; or
• the beneficiary dies.

Note
Repayment of amounts that were previously included as income are tax deductible and reported on line 232 of the T1 General - Income Tax and Benefit Return.

Starting in 2011, a beneficiary with a life expectancy of five years or less will be allowed annual RDSP withdrawals of up to $10,000 in taxable plan savings, as well as a pro-rated amount of plan contributions, without having to repay the grant or bonds paid into the plan in the preceding 10 years. These rules only apply when an election to be an SDSP has been filed with the RDSP issuer by the holder of the RDSP and the issuer has notified the Minister of Human Resources and Skills Development of the election.

For more information about the grant and bond, visit the Human Resources and Skills Development Canada website.