For most people, the Disabilities Savings Plan will have no real value, according to the director of P.E.I. Disability Alert.
Stephen Pate says he wouldn’t trust the plan.
“At first it looked good, but it’s really not that good.”
The only people the new plan will help is upper middle class families with disposable incomes who have money to save, says Pate. Most parents supporting an adult with a disability would find saving money almost impossible, he added.
The 2007 federal budget is offering the plan to help families with severely disabled children.
To apply for the plan, families with disabled children must qualify through a form that, according to Pate, is very restrictive. Both those with mental and physical disabilities can apply. Revenue Canada will be the gatekeepers to decide who qualifies for the plan.
The plan will allow parents to save on behalf of their children for when they are not around to support them, with out the fund being taxed, similar to the RESP. The government will also match up to 40 per cent of contributions, similar to The Canada Education Savings Grant. The money can be us for necessities when needed.
When the money begins to be used by the child, it starts to be taxed. That’s the catch, said Pate.
Fifty per cent of disabled people live below the poverty line, says Pate, and the federal government needs to start a guaranteed annual income but they think it will just create a welfare problem.
“I don’t think that’s true.” The Disability Savings Plan is a good idea because parents want to make sure their child is going to be taken care of, but it still isn’t enough said Barry Schmidl, executive director, PEI Council of the Disabled.
“The federal government can do a lot more to help people with disabilities.”
The plan takes into account one aspect of helping, but it’s just a start, Schmidl said.
“It’s one piece of the puzzle,” said Schmidl, “there’s a lot of the puzzle still missing.”