Myth vs Fact: Registered Disability Savings Plan (RDSP)
Unlocking the benefits you deserve
Having a disability or caring for someone who does can come with extra challenges and costs. Some of these costs may be reduced or even eliminated through payments, reductions to the amount of tax you owe, or eligibility for other support programs. The Government of Canada provides financial support to individuals with disabilities and their caregivers through various payments and tax benefits.
One of the most significant benefits is eligibility for a Registered Disability Savings Plan (RDSP), which allows individuals and their families to save for long-term financial security with the help of generous government grants and bonds. And, depending on income, you can receive up to $1000 annually without needing to make any contributions.
Despite its valuable benefits, uptake of the RDSP remains low in Canada. One primary reason is that many eligible individuals and families are unaware of the program's existence.
In some cases, families lack access to financial advisors who are knowledgeable about the RDSP and how to use it effectively. As a result, many Canadians miss out on a powerful tool designed to provide long-term financial security for people with disabilities.
For others, there is confusion over the program, its complexity and how it may impact other government benefits. Others face barriers to qualifying for the Disability Tax Credit (DTC), a requirement for opening an RDSP.
Read on to learn more about the key role the DTC plays after we bust some of the myths surrounding RDSPs and provide facts that can help you better understand RDSPs.
Myth vs. Fact: Understanding the RDSP
Myth 1: RDSP savings will reduce other government benefits.
Fact: RDSP savings do not affect eligibility for most federal and provincial benefits, including the Guaranteed Income Supplement (GIS) and provincial disability programs. In Manitoba, the provincial government fully exempts any money saved in an RDSP, including government grants and bonds, when calculating income and assets to determine eligibility for Employment and Income Assistance (EIA), also known as social assistance.
Myth 2: You need to contribute money to get government support.
Fact: Even without personal contributions, eligible individuals with lower incomes can receive up to $1,000 annually through the Canada Disability Savings Bond—up to a lifetime maximum of $20,000.
Myth 3: Only parents can open or manage an RDSP.
Fact: Anyone with DTC eligibility who is over the age of majority and legally competent can open their own Registered Disability Savings Plan (RDSP). Parents, guardians, or legal representatives can open one on behalf of a minor or adult who needs support.
Myth 4: RDSP withdrawals come with heavy penalties.
Fact: While early withdrawals may trigger grant or bond repayments, funds can be accessed penalty-free under certain conditions, especially after age 60. With careful planning, RDSPs offer flexible, tax-deferred income in adulthood.
Myth 5: The RDSP is too complicated to be worth it.
Fact: Although the program has rules, many financial institutions offer support, and the long-term benefits—including up to $90,000 in government grants and bonds—make it well worth exploring.
If you have questions, want to better understand RDSPs, or want to learn more, we’re here to help.
Disability Tax Credit: The key to unlocking disability benefits
Many of these programs require approval for the Disability Tax Credit (DTC). Once qualified, it's the key that unlocks access to a range of valuable federal and provincial programs designed to support Canadians with disabilities. Discover more about the DTC, its eligibility requirements, and the application process.
In June 2025, the Government of Canada began accepting applications for the Canada Disability Benefit (CDB), a new program designed to provide financial support to individuals with disabilities aged 18 to 64 years. To qualify for the CDB, you must have been approved for the DTC. The Government of Canada website provides an overview of the CDB program, including eligibility requirements and links to apply online.
The DTC also opens doors to other supports, including child disability, caregiver, workers benefit programs, specific medical expense claims, and other disability benefits. By applying for and receiving the DTC, individuals not only reduce their tax burden but also gain access to valuable tools that can enhance their long-term financial well-being.
Government contributions are an RDSP's most potent secret weapon.
The Canada Disability Savings Grant (CDSG) may contribute up to $3 for every $1 you deposit in your RDSP, depending on your income. You can receive a maximum of $3,500 per year and a lifetime total of $70,000.
The Canadian Disability Savings Bond (CDSB), a bond designed for lower-income families, allows the federal government to contribute up to $1,000 annually for 20 years, with a lifetime maximum of $20,000. You don't need to make any contributions to receive the CDSB — simply open the account. The CDSG and CDSB are available until you reach the age of 49.
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