RDSP’s or Registered Disability Savings Plans are a brand new government program that may allow you to save money for a dependant or related person who qualifies for the Disability Tax Credit.The program is so new that only the Bank of Montreal has its program ready, according to their website.There is a free RDSP Savings Bond of $1,000 for families with an income of $21,288 prorated down for incomes up to $37,885. That alone may be worth opening a RDSP. However, bank fees may impact the benefit.
There is also a Disability Savings grant of $3,500 based on your contribution and income level.
Like most Federal SP’s the rules are complex and the benefits vary by income level and age. For instance, if the disabled person is 60 or older, you cannot start an RDSP. No Savings Grants are allowed after the 49th birthday of the beneficiary.
The cut-off date for 2008 plans and contributions is March 2, 2009 due to the late start of the program.
Contribuitions are not-tax deductible which essentially signals this as a low benefit and low priority tax program. That is, except for the grants and bonds.
In January 2009, we will report on the RDSP in detail covering how it works and who may benefit from the program.
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