ODSP Does Not Equal RDSP

unequalSince I launched the RDSP marketing campaign, I’ve been receiving a lot of inquiries about this government program. One of the most common questions I received is: “I’m  already receiving benefits from the ODSP, does it mean I also qualified for the RDSP?”

Despite the names are so similar, while they both aim to support disabled Canadians, they are actually two distinct programs. ODSP stands for Ontario Disability Support Program, it provides benefits such as employment and income supports.  On the income support program, it assists people with disabilities who need financial assistance to pay for living expenses such as foods and housing.

On the other hand, the Registered Disability Savings Plan, RDSP is intended to encourage long-term savings for Canadian with pro-longed disabilities. The key government benefits are the “Canada Disability Savings Grants” and the “Canada Disability Savings Bonds“.

To clarify for the RDSP approval process, I contacted the CRA and ask if people who are receiving ODSP benefits would be automatically qualified for the RDSP. Their response is simply NO. To be eligible for the RDSP, one must first get approved for the disability tax credit and this is in regardless of ODSP status. (Click here to learn how to apply for the disability tax credit). Although some disabled people are able to receive benefits of both ODSP and RDSP, it is not guaranteed to be always the case, while both benefits are needed to be applied separately.

Despite the approval processes are distinct, they should both be taken into consideration when doing the financial planning . For example, ODSP imposes a limit to the amount of assets one could have. In other words, if one has too much money, there will be clawback of the ODSP benefits. However, certain assets are exempt from this rule, and assets within the RDSP are one of the exemptions.




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