Cessation of disability or death of a beneficiary

What happens if the beneficiary no longer has a severe and prolonged impairment in physical or mental functions?

The RDSP must be terminated and all amounts must be paid out of the plan by December 31 following the first calendar year that the beneficiary is no longer considered to have a severe or prolonged impairment in physical or mental functions that qualified him or her for the disability amount. Any funds remaining in the RDSP after any required repayments of government grants and bonds will be paid to the beneficiary. The taxable part of the disability assistance payment (DAP) will be included in the income of the beneficiary in the year the payment is made to the beneficiary.

What happens if the beneficiary dies?

The RDSP must be closed and all amounts remaining in the plan must be paid out to the beneficiary's estate and the plan terminated, by December 31 following the calendar year in which the beneficiary dies. Any funds remaining in the RDSP, after any required repayment of government grants and bonds, will be paid to the estate. If a DAP had been made and the beneficiary is deceased, the taxable part of the DAP must be included in the income of the beneficiary's estate in the tax year in which the payment is made.