A Registered Disability Saving Plan (RDSP) is a registered investment plan intended to encourage long-term savings by and for persons with disabilities.
The core plan is modelled after the Registered Education Savings Plan (RESP) and its associated grant and bond incentive programs, but there are some significant differences. As with RESPs, money contributed to an RDSP is not tax-deductible, and government grants and bonds are deposited directly to the plan tax-free.
Grants can be as much as 300% of personal contributions and bonds may be obtained without making any a personal contribution as long as an income test is satisfied. Earnings and growth on all deposits accrue tax-free. The beneficiary is the only person entitled to any payments. He or she is the person taxed on those payments, with the taxable amount reduced by the proportion of personal contributions. As well, there are absolutely no restrictions placed on the use of RDSP payments so long as they are received by the beneficiary or applied for his or her benefit The RDSP structure presents disabled persons and their families with a tax-effective means for long-term savings. Coupled with generous support from the CDSG and CDSB programs, these plans can be the central feature of the income and wealth management plan for disabled beneficiaries.