A.    About this Summary

The Ontario government asked the Law Commission of Ontario (LCO) to look at how adults with mental disabilities can be able to participate better in the Registered Disability Savings Plan (RDSP).[1] 

The LCO has finished projects on the principles to follow in drafting or putting in place laws that affect persons with disabilities and older adults. At the moment, we have a large project on Ontario’s laws about capacity, decision-making and guardianship.[2] 

The RDSP project is a separate project. We have released a large Discussion Paper in this project. This paper is a Summary of that Discussion Paper. 

The Income Tax Act says that adults must have capacity to open an RDSP.[3] Guardians and individuals appointed by power of attorney documents (called “attorneys”) can open an RDSP and make decisions about RDSP money for adults who do not have capacity under the law to do it themselves. However, some people say the rules to name a guardian or attorney are too expensive, complex or difficult when an adult only needs help with an RDSP. We are looking in the RDSP project at changes that could be made to make the processes easier. 

The LCO’s project is about creating a process in Ontario that is only for naming a legal representative for RDSP beneficiaries. 

This is a summary of a longer discussion paper for the project. 

This summary is meant for adults with mental disabilities and their family and friends, and also other people who may not be familiar with the issues. 

We want your opinion on information in this summary and the discussion paper. Using information that you give us, and what we learn in our consultations and through our research, we will write a Final Report. 

The Final Report will have suggestions about changes that could be made in Ontario.

This summary has less information than the discussion paper. It does not change anything in the larger discussion paper. The discussion paper and background information on the project are on our website.

Information about the LCO’s larger project on Legal Capacity, Decision-Making and Guardianship is on our website.


B.    Words We Use in the Summary

We try to use words that are easy to understand in this summary. We also use words that have a special meaning when an easier word does not work.  

Here is a list of some words that might be new to you:

Law Commission of Ontario (LCO): The LCO is an independent organization that studies issues and makes suggestions about how the law can be accessible to communities in Ontario.

Adults with Mental Disabilities: We use this to mean the individuals who are affected the most by this project. It includes adults with different types of mental disabilities who have difficulties or are thought to have difficulties making their own decisions about the RDSP.

RDSP Beneficiary or Beneficiary: Beneficiaries are the persons who receive payments from an RDSP.  The LCO’s project focuses only on adults with mental disabilities who are eligible to be an RDSP beneficiary. When we use the words “RDSP beneficiary” or “beneficiary” we mean adults with mental disabilities who are already a beneficiary as well as those who could become a beneficiary.

The federal government says who is eligible to be an RDSP beneficiary. Persons who qualify for the Disability Tax Credit (DTC) are eligible. They must be age 59 or under and resident in Canada when the RDSP is opened and payments are made into the RDSP. 

Guardian: Guardians are persons who can make decisions for adults who have been found incapable of making their own decisions. We discuss guardians more in this summary.

  • For more information, see Discussion Paper, Ch. III.B & V.C.

Power of Attorney: Adults can make a power of attorney to choose a person (called an attorney) to make decisions for them. Although the term “attorney” is used, an attorney named in a power of attorney does not have to be a lawyer. We discuss powers of attorney more in this summary.

  • For more information, see Discussion Paper,  Ch. III.B & V.C.

Legal Representative: When we write about a “legal representative” we mean a person or organization that can help a beneficiary make decisions about an RDSP. This project is about creating a process in Ontario specifically to name a legal representative for RDSP beneficiaries.

Financial Institution: RDSPs are offered at financial institutions. A financial institution is a bank, credit union, trust company or other business that offers services to manage money. Only some financial institutions offer RDSPs.

Plan Holder: Every RDSP needs a plan holder. Plan holders are the persons who open an RDSP at a financial institution. After opening an RDSP, they may be able to make important decisions about managing money in an RDSP, such as deciding who can make payments into an RDSP and making investment choices. We discuss plan holders more in this summary.

Capacity: Capacity is about who is able to make decisions for themselves under the law. Every person has unique abilities. Adults may be able to make decisions about some things but not others. Their abilities may also change over time. In this project, we look at decisions that need to be made for RDSPs only.

The Office of the Public Guardian and Trustee: The Office of the Public Guardian and Trustee is a government office that protects adults who are alleged or found to be incapable in a number of ways. One of the ways is by managing money for adults who have been found to be incapable and who have no one else who is authorized to help them.

Supported Decision-Making Authorizations: Some adults need support making decisions but do not need a guardian or attorney to make decisions for them. In parts of Canada, adults can formally name another person to help them make their own decisions in a supported decision-making authorization. Supporters can participate in activities such as giving advice and communicating decisions. But they cannot make adults’ decisions for them.

Co-Decision Making: In some Canadian provinces, a court can name a co-decision maker for adults who need support making certain types decisions but who do not need a guardian to make decisions for them. Adults and co-decision makers share the power make decisions. This means that they must make decisions together and decisions made by either person alone might not be valid.       

Trusts: Trusts can be used to assist persons with disabilities manage their money. When money is put into a trust, a person called a “trustee” must manage the money in a way that benefits the person for whom the trust was created.


C. What is the RDSP?

The RDSP is a savings plan for persons with disabilities created by the federal government. An RDSP can be opened at a financial institution, such as a bank or credit union. 

Families, friends or anyone else can put money into an RDSP for the beneficiary if they have permission. The federal government will contribute money to the RDSP for eligible beneficiaries. Money in an RDSP can also be invested, so that it can grow over time. 

Money in an RDSP does not make people ineligible for most provincial disability and income support programs, such as the Ontario Disability Support Program (ODSP). People on ODSP can take money out of an RDSP without affecting their ODSP benefits.[5] There are also special rules about what happens when money is taken out of an RDSP for income taxes.[6]


D.   Why the LCO is Doing this Project

We are doing this project because some adults who want an RDSP but need help making decisions about the RDSP (or their family or friends) have had difficulties naming a legal representative. 

Without a legal representative, they may not be able to open an RDSP or make some decisions about RDSP money. 

Ontario does not have a process in place that is only for naming a legal representative for RDSP beneficiaries. 

Guardians and attorneys can open an RDSP and make decisions for a beneficiary. Some people say they have concerns that the process to name a guardian or attorney for an adult with mental disabilities who only needs help with an RDSP is more difficult than it needs to be. 

For example, adults have to be declared incapable of managing their finances to have a guardian to help with decisions about an RDSP. Sometimes the process of getting a guardian can also take a long time and be expensive. 

The LCO’s project looks at changes in Ontario that could create a new process that is only for naming a legal representative for RDSP beneficiaries. 

We think that any new process should be affordable, easy to use and it should address other challenges that some people say are connected to the rules in place.  

  • The federal government has put in place a process to allow a parent, spouse or common-law partner to open and make some d