A. Understanding the Federal RDSP
1. A Long-Term Savings Vehicle for Persons with Disabilities
The RDSP was established after several years of advocacy activities led by families of persons with disabilities and affiliated organizations. The Planned Lifetime Advocacy Network (PLAN), an organization founded by parents of children with disabilities, was instrumental in mobilizing broad-based discussions on how to secure the future well-being of children with severe disabilities, who would require funds as adults when their families would no longer be able to support them. With funding from the Law Foundation of British Columbia, PLAN commissioned two research studies to examine the viability of a savings plan for that purpose. Following the submission of those studies to the federal government, the Minister of Finance appointed an Expert Panel that reviewed them and made further recommendations in its report A New Beginning. These recommendations were largely adopted into the design of the RDSP, including that all persons entitled to the Disability Tax Credit (DTC) would be eligible to become an RDSP beneficiary, both children and adults, age 59 and under.
The introduction of the RDSP was announced in the 2007 federal Budget, and it became available in December 2008. The rules governing the RDSP, including eligibility criteria, plan terms, accountability measures and other issues are set out in the ITA, the Canada Disability Savings Act (CDSA) and related Regulations. In October 2011, the federal government launched a review of the RDSP. In the course of that review, it raised the matter at issue in the LCO’s project. The federal government introduced a number of measures in the Economic Action Plan 2012, in response to feedback received during the review. Parliament subsequently enacted several amendments to the ITA, including temporary provisions that are directly relevant to establishing a legal representative for RDSP beneficiaries. Further consideration of the federal government’s review and legislative amendments is given later in this discussion paper in Chapter II.B, The Importance of Capacity When Adults Seek to Access the RDSP.
2. RDSP Policy Objectives: Poverty Alleviation, Contribution and Autonomy
The RDSP has distinctive policy objectives that are material to understanding its design and administration as well as adults’ expectations when they seek to access it. Although the LCO will not evaluate the RDSP policy objectives, or their implementation, we take them into account in defining the goals for reform.
The RDSP is unique to Canada. The Minister of Finance’s Expert Panel surveyed a number of jurisdictions but “failed to turn up a form of tax assisted Disability Savings Plan that was in use in other countries”. Without the benefit of an analogous example, the RDSP was modelled on other registered savings plans offered in Canada, such as the Registered Retirement Savings Plan (RRSP) and Registered Education Savings Plan (RESP). This approach was consistent with PLAN’s earlier proposals, which had concluded that a tax-assisted savings plan would be the appropriate mechanism to achieve several policy objectives for the RDSP. Financial security for those who bear the high costs of disability was one such policy objective. Other policy objectives included encouraging self-sufficiency through a contributory benefit structure, promoting active citizenship as consumers of mainstream financial services, and developing a partnership among families, the government and the private sector “to share the responsibility for securing a good life for people with disabilities”. These are discussed briefly below.
Families and governments often share responsibility to provide assistance to persons with disabilities. Family contributions may include caregiving in the tasks of daily living as well as financial assistance. These exist as informal supports within the naturally dynamic relationships that characterize family units and they complement government benefits. Governments administer special programming for persons with disabilities, which is typically comprised of income supports and social services. Social services include care and other assistance delivered by government, voluntary and professional providers in areas such as homecare, equipment, therapy and employment training.
In Canada, as elsewhere, income supports and social services have changed significantly over the last fifty years alongside a shift in the way that “disability” is conceptualized. Services provided under earlier, wholly medical models of disability frequently entailed placing persons with disabilities in institutions that were removed from society in order to treat perceived impairments or for protection. Beginning in the 1960s, social movements to deinstitutionalize persons with disabilities have emphasized participation and inclusion in community life. “Rather than seeing disability as inherent in an individual, these new approaches see disability resulting from attitudes and conditions within society”. Public funds have been progressively reallocated away from institutions to income supports and community-based services.
Many Canadians with disabilities now rely on income supports as their primary, if not only, source of income. However, income support is intended only to cover the basic costs of living and supplemental benefits for disability-related services are often pre-determined. Moreover, income supports in Canada have been found to disincentivize the contributions that adults can make to achieve varying levels of self-sufficiency. The income support that Canada’s provinces administer to persons with disabilities is generally allocated as a monthly flat-rate and is “means-tested”: eligibility for income support requires that an adult has little independent income and for each payment, there is a ceiling beyond which income that an adult generates, or the value of gifts, may be deducted. In 2012, the Commission for the Review of Social Assistance in Ontario found that persons with disabilities, especially, “get trapped in the system and face diminishing opportunities…They are not receiving the support they need to stabilize their lives and move toward greater independence and resiliency”.
The RDSP was conceived as a way to bridge the gap between the income support ceiling and the financial security required for an adult’s well-being, and it is exempted from means-testing under most provincial income support regulations, including in Ontario. An RDSP beneficiary can receive federal grants and bonds up to a maximum of $90,000 and accumulate additional savings of up to $200,000, before investments, without being subject to income support deductions. As Professor Andrew Power et al explain, “[t]his is especially important because people with disabilities can now accumulate savings without jeopardising disability benefits”.
The RDSP was also intended to enhance adults’ autonomy and equal citizenship as consumers of private sector products. Recent reforms of government supports for persons with disabilities have increasingly tended toward establishing delivery mechanisms that empower adults to choose the assistance that they need for themselves. This “personalisation of support” has taken different forms across jurisdictions and may include “individual budgets, direct payments, consumer directed care, flexible funding and self-managed supports”. The RDSP policy objectives are consistent with these recent reforms: “there are no restrictions on when [RDSP] funds can be used or for what purpose”. RDSP funds are not limited to fulfilling basic needs, or to covering pre-determined services, which can “often take [on a] life of their own”. Moreover, RDSP beneficiaries and their families are encouraged to make active contributions through the Canada Disability Savings Grant, which matches private deposits at rates of up to 300 per cent, depending on the amount of the deposit and the beneficiary’s family income (up to $3,500 annually). For those with low incomes, the Canada Disability Savings Bond provides government supports of up to $1,000 annually, even if no contributions are made to the plan. As with all contributions, these government supports can grow if the RDSP investments are fruitful.
In her study on the RDSP administration and uptake, Jeanette Moss summarizes these policy objectives as follows:
The RDSP signals an important shift away from a welfare-based approach to helping people with disabilities and moves towards an investment-based approach. Rather than increasing the amount of short-term disability benefits, the RDSP has the overarching purpose to provide a long-term sheltered savings vehicle. People with disabilities take an active role in their own income generation and future financial stability…Rather than imposing a limit or ceiling on what people with disabilities can own or save, the RDSP establishes a foundation or starting place for people with disabilities to save money.
3. Who are RDSP Beneficiaries and How Do They Access the RDSP?
There are over 70,000 people in Canada with an RDSP. RDSP beneficiaries must meet basic eligibility requirements set by the federal government, including that they must be a “DTC-eligible individual”. Within the bounds of these requirements, there is substantial diversity in the persons seeking to participate in the RDSP. Specific and actual beneficiaries identified in the LCO’s preliminary consultations and in submissions made to the federal government include persons with developmental, psychosocial and cognitive disabilities. Some RDSP beneficiaries have lived with disability since birth, such as those persons with fetal alcohol spectrum disorder (FASD), autism or Down syndrome. For others, changes in their abilities may have occurred later in life, such as those persons with schizophrenia, HIV/AIDS, acquired brain injuries (ABI) and Alzheimer’s disease.
The onset of disability may be abrupt or may develop gradually; abilities may be stable or they may fluctuate. The LCO heard from one RDSP beneficiary who said that not only does the RDSP help him save for when his family is no longer present, but it is also a contingency plan in the event that his abilities, services or support networks change: a “safety net” for the uncertainties that could “snowball” from his current situation. We also heard that beneficiaries with degenerative conditions, such as HIV/AIDS, multiple sclerosis and developmental disabilities, may age at an accelerated rate and experience conditions normally associated with older adults, including dementia. These accounts point to the need to consider the lived-experience of RDSP beneficiaries, including those who use the RDSP for reasons other than for long-term savings because they face barriers in very different ways throughout their lives.
The effect of differing abilities on relationships, the nature of stig