The Canada Disability Savings Grant is a matching grant for people with disabilities. That implies the government contributes to your RDSP to assist you in saving. Depending on the beneficiary’s family income and contribution, the government provides matching grants of up to 300 percent. The maximum grant amount is $3,500 per year, with a lifetime limit of $70,000. On contributions made up to and including December 31 of the year you reach 49, matching grants are paid into your RDSP.
What Is This Grant About?
The Canada Disability Savings Grant (CDSG) is a grant offered by the Canadian government to help Canadians with disabilities save their future. The CDSG provides matching contributions to savings plans opened by parents or guardians on behalf of children with disabilities up to a specific limit. The CDSG is one of the two main components of the Registered Disability Savings Plan (RDSP), and the Canada Disability Savings Bond (CDSB).
The CDSG is meant to encourage and help Canadians with disabilities, and their families save for the future. The Grant is based on a family’s net income and contribution amounts and is paid into an RDSP. Depending on the beneficiary’s family income, the government will match contributions made to an RDSP up to a specific limit.
You can apply for a Canada Disability Savings Grant if you have a Registered Disability Savings Plan (RDSP).
If you have an RDSP, you can apply for a grant if you meet the following criteria:
- if you’re 49 years old or younger (if you are 49, you must apply before the end of the year)
- If you are eligible for the Disability Tax Credit
- If you are a Canadian resident with a social insurance number
What Is a Registered Disability Savings Plan?
In Canada, the Registered Disability Savings Plan (RDSP) is a federally-managed savings plan for people who have been assessed as having a severe and prolonged mental or physical disability. It functions much like an RRSP but with some critical differences designed to make it more accessible to those with disabilities.
A registered disability savings plan is intended to help Canadians with disabilities, and their families save money for the future. The money saved in an RDSP can help pay for housing, transportation, education, and other costs associated with living with a disability. The RDSP is available to Canadian residents who a qualified medical practitioner has assessed as having a mental or physical disability that is severe and prolonged. The disability must also be expected to last for at least two years or death.
Any Canadian resident aged 18 or older can open an RDSP, and there is no limit to how much money can be saved in the plan. Contributions to the RDSP are not tax-deductible, but the income and capital gains generated by the investments within the plan are tax-sheltered.
The federal government will contribute a matching grant of up to $3,500 per year to an RDSP, depending on the beneficiary’s family income. This Grant is available until the beneficiary reaches the age of 59. There is also a 10-year savings period, which begins when the first contribution is made to the RDSP. After this period, the government will provide a Canada Disability Savings Bond of up to $1,000 per year to low- and modest-income beneficiaries, regardless of family income or contributions made to the plan.
To open an RDSP, you will need to contact a financial institution that offers them. You will also need a Social Insurance Number (SIN) for yourself and any other contributors to your plan.
How to Apply for the Canada Disability Savings Grant?
The Grant must be applied for through the financial institution where you have your RDSP. Fill out the application form and print it to take to your financial institution to make things easier:
The Canada Disability Savings Grant and Canada Disability Savings Bond will be applied for and administered using this form. The financial institution must apply for Employment and Social Development Canada as soon as possible after receiving it from the Registered Disability Savings Plan holder.
The form is given in the PDF form in the link given below. Click on the link to open the PDF and then fill out the printed form of the PDF.
What Amount of Money Is Granted if you Apply for the Canada Disability Savings Grant?
Grant amounts are determined by income categories and adjust annually to account for inflation. The Canada Revenue Agency’s website lists the current qualifying income levels.
To be eligible for the 200 percent and 300 percent matching grants, you must meet the following criteria:
- Beneficiaries over the age of 18 must-have filed income tax returns for the previous two years and must continue to do so for all future taxation years.
- Parents or guardians of beneficiaries under the age of 18 must-have filed income tax returns for the previous two years and must continue to do so for all future taxation years and apply for the Canada Child Benefit.
If your family’s income is less than or equivalent to $91,831, you have the following options:
- The government will deposit $3 for every $1 you pay to the RDSP up to a maximum of $1,500 per year for the first $500 you invest each year.
- The government will deposit $2 for every $1 you put to the RDSP for the following $1,000 you donate each year, up to a maximum of $2,000 per year.
If your family’s income exceeds $91,831:For the first $1,000 you give to the RDSP each year, the government will match your contribution dollar for dollar, up to $1,000 each year.
To Wrap it All Up
The Canada Disability Savings Grant is an excellent way for parents to save money for their child’s future if the child has a disability. If you’re not sure how it works or if your family qualifies, visit the Canada Revenue Agency website to learn more about this Grant and apply today!