RDSP Income Matching Rates for 2017

To start off planning for your Registered Disability Savings Plan in 2017,  I contacted Mackenzie Investments. They are one of our long-term business partners, and the top notch financial company when it comes to RDSP planning. They provided me with the new figures of the family net income to calculate for the grants and bonds. There hasn’t been too much change, the government once again increased the income threshold by a little, which makes it slightly easier to qualify for these benefits.

Below are the updates on the “Canada Disability Savings Grants“, “Canada Disability Savings Bonds” and “Disability Tax Credit“.

The chart below outlines the matching rates of “Canada Disability Savings Grants (CDSG)” in 2017

Family Net Income *CDSG Matching RatesMaximum Annual CDSG
Up to or equal to $91,831- 300% on first $500
- 200% on next $1000
$3500
Over $91,831100% on first $1000$1000

 

The chart below outlines the matching rates of “Canada Disability Savings Bonds (CDSB)” in 2017

Family Net Income *Maximum Annual CDSB
Below $30,000
$1000
Between
$30,000 to $45,916
$1,000 is reduced on a prorated basis (based on the formula in the Canada Disability Savings Act)
Over $45,916
No bond is paid

 

  • * For a minor beneficiary, the family net income is that of his or her parents. When the beneficiary is over the age of majority, the family net income is that of the beneficiary and his or her spouse, if applicable.

 

Updated version of the Disability Tax Credit Form (T2201):

The second update is about the “Disability Tax Credit”. I checked on the CRA website, and they also revised the T2201 form. (That’s the form to be filled out by your doctor, then mail to the CRA). The previous link no longer works, here’s the updated ones to download the form. http://www.cra-arc.gc.ca/E/pbg/tf/t2201/t2201-16e.pdf

 

  • Disclaimer: Details were obtained from Mackenzie Investments on Jan 6, 2017. They could be subjected to change, and they are not guaranteed to be error-free. Above details are for general understanding only, and not meant to provide any financial advice. Please always consult a financial professional before making any decision. 

 

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Comments

    • Lucy De Matos
    • October 23, 2017
    Reply

    In your opinion is it a wiser decision to put $1,000 into my RDSP rather than a RRSP?
    how much would the gvnt contribute on that amt?

  1. Reply

    Hi Lucy, the RDSP and RRSP both have its own advantages and limitations, so it really depends on what you want to achieve.

    When depositing into the RRSP, the contribution is tax deductible, which might be able to reduce some of your income tax. Unless the RRSP withdrawal is for the first-time home buyers or the lifelong learning program, it would be taxed as income for that particular year.

    If you deposit into the RDSP, (assume you haven’t passed the age to reach the Canada Disability Savings Grants), then one huge advantage is you could receive the matching grants from the government. However, the grants or bonds from the government would have to be matured before any withdrawal takes place. Else, there could be claw back on the government grants or bonds. Unlike the RRSP, among withdrawal, your RDSP contribution portion will not be taxed.

    General speaking,
    – If you need to use the money in the short run, RRSP could provide more flexibility
    – If your contribution is for long-term savings, then RDSP has the big advantage in attracting the matching grants.

    Of course, this is just for general understanding. I’ll need to understand more about your financial situation in order to provide you with suitable. You are welcome to email me at Samuel@SamuelConsultant.com

    Hope this would be helpful.

  2. Reply

    who ever thought of having a savings plan for the disabled who can not access it until age 60??? A group of us we ‘talked” into this program by a financial advisor whom we trusted in 2008. He told us we could withdraw when our child entered an institution of higher learning, when he was of age to buy a house..whatever he needed it for. So I figured by the time my boy was 25 we could extract his monies. I am a single adoptive Mom who thought I was doing a good thing for my son…I have since learned if the government is involved don’t go near them with your money. I invested more money than I could afford and now am told my son cannot access it until he is 60?? Never once was that mentioned…how many children with major disabilities will even LIVE to see 60??? I am so angry to be had in this way and wasted my money on the false information we received. I ask for my investment back and the reply was, “Oh that will take years.” My son will be in a position to use this for post secondary ed and cant because he is not 60 yrs old..seriously?? Damn government!

    1. Reply

      Hi Lois, I’m sorry to hear that you were not well-informed about the RDSP withdrawal rules. Many people misinterpret about claw back restriction. It is 10 years from the last date that you receive any government grants or bonds, not from the time of the contribution. In most instances, RDSP is for long-term savings such as retirement, this might not be a good option for education savings or property purchasing in the short to medium term.

      Once again, this is just for general understanding. I’ll need to understand more about your financial situation in order to provide you with suitable. You are welcome to email me at Samuel@SamuelConsultant.com

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