Island Health Partnership: Access RDSP

Partnership

Access RDSP is partnering with Island Health to provide personalized support with the Disability Tax Credit (DTC) and Registered Disability Savings Plan (RDSP) for children and youth (ages 19 and under) in the Island Health region, which includes the gulf islands.  

If you are in the Island Health region and have a child with disabilities who needs the DTC and/or RDSP, please reach out to our Community Engagement Specialist, who can provide one-on-one guidance with filling out forms, applying for the DTC, and setting up an RDSP. This program is fully funded and there is no fee to access services.  

For help or to ask questions about eligibility, contact: 

Audrey Deutschmann
audrey@disabilityalliancebc.org
778-922-3744 

 

Why Start Early? 

A Registered Disability Savings Plan (RDSP) can accumulate up to $90,000 in government funding, but it takes at least 20 years of eligibility to collect it. Opening an RDSP in childhood provides more opportunity to access that funding. There’s no downside to an early start. 

How can you access that $90,000 and why is it important to do it as soon as possible? Let’s talk about numbers. 

The RDSP collects two kinds of government funds. The first is called the Savings Bond, which gets you $1000/year if your income is less than about $36,000/year. You can collect a maximum of $20,000 in bond money before age 49. The second is the Savings Grant, which is a little more complicated because it requires personal contributions. Those whose income is less than about $100,000/year are eligible to trigger a $3,500/year grant from the government by contributing $1,500/year of their own money. If your income is over about $100,000/year you can still collect $1000 by contributing $1000. The lifetime maximum you can collect from the grant is $70,000 before age 49. After the year in which you turn 49, you are no longer eligible for any bonds or grant money. 

Starting in the year your child turns 19, the RDSP will consider their income instead of yours, which may change their entitlement. Because the government always looks two years ahead when determining eligibility, it’s important to start filing your child’s taxes at age 16, even if they have no income.  

Although your child may be eligible for more money based on their income rather than yours, it’s still best to open the RDSP as soon as possible; if your goal is to hit the maximum Bond and Grant amounts, even years with partial government contributions are better than nothing. Get started while they’re young!    

The reason you might want to race for that $90,000 is because of the age at which your child can start withdrawing from the RDSP without penalty. The penalty, which is $3 for every $1 withdrawn (taken from government contributions) will always apply to withdrawals that occur within 10 years of the last government contribution. Most people collect the Bond and Grant up until age 49, then begin withdrawals at age 60. However, if you maximize the Bond and Grant early (that’s $20,000 for the Bond and $70,000 for the Grant), the 10-year clock can start early too. Your child might be able to access that money in their 40s or 50s instead of at 60!  

Is all this a bit overwhelming? Do you need help getting the Disability Tax Credit to make your child eligible for an RDSP? Would you like to talk to someone in person or over the phone? If you are a youth or parent on Vancouver Island and want to know more about how you can take advantage of the RDSP, reach out to Audrey!