Financial Planning -> Disabilities -> RDSPs -> Payments into an RDSP
Payments into a Registered Disability Savings Plan (RDSP)
A registered disability savings plan (RDSP) will consist of the following:
Only the contributions can be withdrawn tax-free by the beneficiary. See taxable amount of disability assistance payments for more information.
Contributions to a Registered Disability Savings Plan (RDSP)
Contributions may not be made to the RDSP:
Payments into the RDSP by the federal government
Funds will be paid into the RDSP by the federal government, depending on the amount of contributions and family net income, in the form of
CDSG and CDSB carry forwards
RDSP beneficiaries are currently unable to carry forward unused Canada Disability savings Grants (CDSGs) and Canada Disability Savings Bonds (CDSBs) to future years.
The Federal 2010 Budget proposes to amend the Canada Disability Savings Act to allow a 10-year carry forward of CDSG and CDSB entitlements. The carry forward will be available starting in 2011. Plan holders will receive annual statements of CDSG entitlements.
For more information see the 2010 Budget website topic Carry forward of RDSP grants and bonds.
Canada Disability Savings Grants (CDSG)
The federal government will give Canada Disability Savings Grants to the RDSP, depending on family net income and annual contributions. The lifetime limit for CDSG for any beneficiary is $70,000.
When the beneficiary of the RDSP is
then the amount of CDSG paid in a year will be a maximum of $3,500, calculated as:
In any other case, the amount of the CDSG will be 100% of the total contributions in the year, to a maximum of $1,000.
(1)The family income amount of $74,357 is indexed for years after 2007. For 2017 it is $91,831. See the table below.
Note: The Canada Disability Savings Act Regulations include provisions that an RDSP will be eligible to receive both CDSGs and CDSBs until the end of the year in which the plan beneficiary attains 49 years of age. The Regulations also state that the beneficiary must be a DTC-eligible individual in the year in which the RDSP contribution is made (re CDSGs), or in the year in which the CDSB is payable.
Canada Disability Savings Bonds (CDSBs)
Canada Disability Savings Act
The federal government will also give CDSBs of up to $1,000 per year, to RDSPs established by low and modest-income families. It is not necessary to make contributions to the RDSP in order to receive CDSBs. The lifetime maximum CDSB limit is $20,000.
The amount of CDSBs given to an RDSP in a year will be $1,000, if the beneficiary of the RDSP is
Where the family net income or adjusted income is greater than 30,000(1) but less than $45,916(1), the amount of the CDSB will be:
$1,000 - [$1,000 x (A - B) / (C - B)]
In any other case, there will be no CDSB paid.
Example: For family net income of $40,000, the CDSB for the year will be:
$1,000 - [$1,000 x ($40,000 - $30,000) / ($45,916 - $30,000)]
= $1,000 - [$1,000 x ($10,000 / $15,916)]
= $1,000 - [$1,000 x 0.628299] = $1,000 - $628.30
(1) The amounts of $30,000 and $45,916 are the amounts for 2017, indexed annually, and are the same as the National Child Benefit supplement thresholds. See the following tables:
Canada Disability Savings Grant (CDSG)
2017 Family Income (1)($)
up to 91,831
|300% on first $500||100% on first $1,000|
|200% on next $1,000|
2017 Family Income (1) ($)
|CDSG matching rate||($)|
(1) These income thresholds are for 2017, and are indexed to inflation. The lower 2 amounts are the same as the National Child Benefit (NCB) Supplement thresholds, and the higher amount is the taxable income above which the middle federal tax bracket begins. The 2017 amounts can be found in the following Employment and Social Development Canada (ESDC) InfoCapsules:
(2) Average amount of CDSB, assuming even distribution of families over income range.
See also the Employment and Social Development Canada web page on CDSG Grants and Bonds.
Next: Payments out of the RDSP
Back to RDSP main page
Revised: September 19, 2017
Copyright © 2002 Boat Harbour Investments Ltd. All Rights Reserved. See Reproduction of information from TaxTips.ca