The Registered Disability Savings Plan (RDSP)
- The RDSP is a savings vehicle created by the federal government to assist persons with disabilities with long-term financial security.
- RDSP beneficiaries must meet eligibility criteria set by the federal government.
- Participating financial institutions offer RDSPs to eligible members of the public.
- Beneficiaries, and their family and friends can make private contributions to an RDSP.
- The federal government’s Canada Disability Savings Grant matches private contributions at rates of up to 300 per cent, depending on the amount of the contribution and the beneficiary’s family income (up to $3,500 annually and $70,000 over the beneficiary’s lifetime).
- The Canada Disability Savings Bond provides government supports to beneficiaries with a low-income, depending on their family income, even if no contributions are made to the plan (up to $1,000 annually and $20,000 over the beneficiary’s lifetime).
- Funds in an RDSP may benefit from investment income and there are special rules on how contributions, funds in an RDSP and withdrawals are treated for tax purposes.
For more information on the RDSP, please see the Canada Revenue Agency (CRA) website “Registered Disability Savings Plan (RDSP)”.
The Importance of Capacity When Adults Seek to Access the RDSP
The Income Tax Act regulates who can open and make decisions about an RDSP.
Opening an RDSP requires a “plan holder” to enter into a contract with a financial institution. After opening an RDSP, a plan holder may have authority to make other decisions about the RDSP, such as authorizing contributions, deciding investments and requesting one-time withdrawals.
An adult beneficiary can be the RDSP plan holder. However, where an adult is not legally capable of entering into a contract with a financial institution, another qualifying person must be the plan holder. Qualifying persons can be a guardian or another person who is legally authorized to act on behalf of the beneficiary under provincial laws.
Ontario does not have a process in place that is specifically for the purpose of establishing a legal representative for the RDSP. The Substitute Decisions Act, 1992 governs the appointment of general substitute decision-makers for property management, including guardians and attorneys.
Adults and their families have voiced concerns with respect to existing processes within provincial jurisdictions to appoint a legal representative for the RDSP. Many of these processes require that a person be declared incapable, and they can involve a considerable amount of time and expense.
The Ontario government has acknowledged that adults with mental disabilities have experienced challenges in accessing the RDSP when they have diminished capacity and has requested that the LCO undertake a review of how they might be better enabled to participate in the RDSP.
Capacity of Adults with Mental Disabilities and the Federal RDSP: Discussion Paper
- In December 2013, the LCO released a discussion paper addressing key issues for the project. The discussion paper sets out options for reform that could be used to create a process specifically for the purpose of establishing a legal representative for RDSP beneficiaries.
- In January 2014, we released a summary of the discussion paper (in English and French) that is intended for adults with mental disabilities and their families and friends, and other people who may not be familiar with the issues.
- The LCO is currently accepting comments from members of the public on the discussion paper, including the options for reform. Our consultation phase will run until early 2014 and will also include focus groups and individual interviews by invitation.
- The LCO’s Final Report will integrate feedback we receive during the consultation phase and our ongoing research. We anticipate that it will be released in spring 2014.
For more information on how you can contribute to the LCO’s project during the consultation phase, please see our webpage Share Your Feedback.