The RDSP by the Numbers: Grants, Bonds, and How a Parent’s RRSP Can Roll Into It

Our companion article explains how the Registered Disability Savings Plan (RDSP) works and how it connects to the Disability Tax Credit. This one is about the numbers, because families often decide whether an RDSP is worth the effort based on figures they have not actually seen.

The Limits

Item	Amount
Lifetime contribution limit	$200,000 (no annual limit; contributions are not tax-deductible)
Grant, lower family income	300% on the first $500 contributed, 200% on the next $1,000: up to $3,500 a year
Grant, higher family income	100% on the first $1,000 contributed: up to $1,000 a year
Lifetime grant limit	$70,000
Bond (no contribution needed)	Up to $1,000 a year, to a lifetime limit of $20,000, for lower-income families
Grants and bonds paid until	The end of the year the beneficiary turns 49
Contributions allowed until	The end of the year the beneficiary turns 59

The income thresholds that decide which grant rate applies are indexed every year, and they currently sit at roughly $38,000 for the full bond and roughly $115,000 for the higher grant rate. For a beneficiary who is a minor, the test uses the parents’ income. Once the beneficiary turns 19, only their own income (and a spouse’s) counts, which often moves a young adult into the lower-income tier.

A Worked Example

Take a family that opens a plan for a child who is DTC-eligible and puts in $1,500 every year. In the lower-income tier the grant on that is $3,500 each year, and if the family income is low enough the bond adds another $1,000.

After 20 years	Amount (before investment growth)
Family contributions ($1,500 × 20)	$30,000
Grants ($3,500 × 20, reaching the $70,000 lifetime limit)	$70,000
Bonds ($1,000 × 20, if income qualifies)	$20,000
Total in the plan	$120,000

The family put in $30,000. The government put in up to $90,000. Everything the plan earns on top of that is extra.

Catching Up on Missed Years

If a family did not open a plan when the person first became eligible, unused grant and bond entitlements can be carried forward for up to 10 years. In a catch-up year you can receive up to $10,500 of grant, but only if you contribute enough to earn it. This is why opening the plan sooner is worth more than saving a larger amount later, and why every year of delay can permanently lose some of the matching.

The Move Most Families Miss: A Parent’s RRSP or RRIF

When a parent or grandparent dies, their RRSP or RRIF is normally taxed as income on their final return. There is an exception for a financially dependent child or grandchild with a disability: the proceeds can be transferred, tax-deferred, into that person’s RDSP.

• The transfer counts toward the $200,000 lifetime contribution limit.
• It does not earn grants. The matching only applies to ordinary contributions.
• The beneficiary has to be financially dependent because of an infirmity, and the plan has to exist or be opened to receive it.
• Taxes are deferred, not erased. They are paid by the beneficiary when money comes out of the plan, usually at a much lower rate than the parent would have paid on the final return.

For a family with an adult child who has a disability and a parent with a large RRSP, this can be worth tens of thousands in tax. It only works if the RDSP is set up and the will and beneficiary designations are written to use it, which is a conversation worth having while everyone is well.

What It Means for Benefits

One reason families hesitate is the fear of losing provincial support. In Alberta, an RDSP does not count against AISH in the way other savings do, which is a large part of why it exists. The details can differ between programs, so it is worth confirming how your situation is treated before making withdrawals.

Where to Start

The first step is Disability Tax Credit approval, since the RDSP requires it. If that is already in place, the plan can be opened at most major banks and credit unions. We review DTC eligibility at no cost, and can look at how an RDSP and your own estate plan fit together.