Registered Disability Savings Plans (RDSPs)

Contract registration

Registration of a Disability Savings Plan (an "RDSP")

A disability savings plan is automatically registered at the time the holder signs the contract and all conditions in subsection 146.4(2) of the Income Tax Act are met. The issuer must electronically submit the information to the Minister of HRSDC no later than 60 days after the plan is established. If the information is not submitted to the Minister of HRSDC within the 60 day timeframe, the contract's registration will be nullified.

Notifying the Government of Canada of the Existence of an RDSP

The agreement that an issuer enters into with the Minister of HRSDC will set out the issuer's obligations to provide information to that Minister. The Canada Disability Savings Program - Interface Transaction Standards document will set out the required data elements an issuer must collect and submit to the Government of Canada.

Transferring an RDSP

An RDSP must permit property to be transferred to another RDSP of the beneficiary at the request of the holder. Transfers can only be made to another RDSP of the same beneficiary. The trustee (Issuer) must transfer all of the property from the RDSP directly to the trustee (Issuer) of the RDSP receiving the property. The transferring plan must be terminated for the transfer to be valid. The termination of the transferring plan must occur within 120 days of the effective date of the receiving plan. The amount of the transfer is not included in any taxpayer's income.

The issuer of the transferring plan must provide the issuer of the receiving plan with any information that is necessary for the new plan to comply with the requirements of the Income Tax Act and the Canada Disability Savings Act.

The information the transferring issuer must provide to the receiving issuer includes:

• Name, date of birth and social insurance numbers or business number if applicable of the beneficiary and of each of the holders;
• The address of the beneficiary and of each of the holders.

The information must also include the dates and amount of all transactions previously made under the transferring plan, such as:

• Contributions;
• Administrative charges and fees;
• Disability assistance payments;
• Lifetime disability assistance payments;
• Payments of the Canada Disability Savings Grants or Bonds
• Repayments of the Canada Disability Savings Grants or Bonds;
• Investment transactions (gains and losses); and
• Investment income.

If the beneficiary is at least 59 years of age when the transfer takes place, the receiving plan must undertake to pay to the beneficiary any lifetime disability assistance payments that the transferring plan would have paid during the remainder of the year had the transfer not taken place.

Terminating an RDSP

An RDSP must terminate when the beneficiary dies or when the beneficiary no longer has a severe and prolonged impairment in physical or mental functions that markedly restricts the beneficiary's ability to perform a basic activity of daily living.

Amounts remaining in the plan (after taking into consideration any repayments under the Canada Disability Savings Act) are to be paid to the beneficiary or the beneficiary's estate, and the issuer must terminate the plan by the end of the calendar year following the calendar year throughout which the beneficiary has no severe and prolonged impairment or the end of the calendar year following the calendar year in which the beneficiary dies.

If the issuer of the plan was not aware, or was uncertain, as to whether the beneficiary of the plan had died or ceased to have a severe and prolonged impairment and did not terminate the plan as required, the Minister of Revenue may consider deferring or waiving the deregistration of a plan.