Canadians not taking advantage of disability savings

Prime Minister Harper, RDSP benefits few Canadians except ultra rich

The Registered Disability Savings Plan, a gem in the crown of the Harper government’s social policies, has been a failure in helping Canadians with Disabilities.

If Prime Minister Harper wanted to help Canadians with disabilities he could implement many of the well researched proposals to end poverty and provide disability supports. Complicated schemes like the RDSP that target the ultra rich are of little value.

Recent survey sponsored by the Bank of Montreal shows only 5% of Canadians with disabilities have a tax sheltered savings plan for people with disabilities.

RDSP’s are focused on the upper income parents of children with disabilities who have disposable income available for savings after their own RRSP savings.

Most Canadians with a disabled dependent are spending their money on disability supports and medical costs. 95% of them don’t have any additional money for RDSP savings.

A recent Caledon study found a high percentage of Canadians with disabilities are living in poverty. Anyone living on the $9,000 annual income from CP Disability is not a potential saver.  

RDSPs also exclude the vast number of Canadians with disabilities who were 59 years of age and older.

The following press story in the Toronto Sun misses the point – the RDSP program doesn’t work.

Canadians not taking advantage of disability savings: Report

Toronto Sun – Only 10% of Canadians who have a disability or a family member who is disabled are knowledgeable about registered disability savings plans, and almost half have never heard of them, a survey by BMO found.

Only 5% of Canadians with disabilities hold a plan, the poll found. Only 6% who have heard of the plans know that contributions are tax sheltered.

RDSPs were introduced by the government two years ago to provide tax-sheltered investments for people with disabilities. Any Canadian under 60 with a disability is able to apply, and a total of $200,000 can be contributed over the life of the plan.

“The survey results clearly demonstrate that Canadians with disabilities are not aware of the assistance and financial relief available through RDSPs,” said David Sharone, product manager of registered plans and solutions. “We want to let them know that this program can be extremely helpful in providing critical financial support for those with disabilities.”

This year’s contribution deadline for RDSPs is Dec. 31.

The survey was completed by 501 Canadian adults who have a disability or have a family member with a disability, and was conducted using Leger Marketing’s web panel between Sept. 10 and 19.