An RDSP is designed to provide regular payments to the beneficiary. These are called lifetime disability assistance payments (DAPs).
How the payments work
The beneficiary can make withdrawals from the plan at any time, but must begin receiving regular payments no later than the end of the year they turn age 60. If payments don't start by age 60, the beneficiary will no longer qualify for the Disability Tax Credit.
Once the payments start, they must be made at least annually until the beneficiary dies or the plan is closed.
The maximum annual payment amount is based on a formula set by the CRA. The formula takes into account the value of the plan and the life expectancy of the beneficiary. Talk to your financial institution about payment amounts and frequency.
Estimate future payments: Use this calculator to do the math. It estimates what your RDSP could be worth in the future and the potential payments you could receive.
Payments don't affect other government benefits
Payments do not affect a beneficiary’s eligibility for:
federal benefits like the HST credit and the Canada Child Tax Benefit, and
provincial benefits in most provinces. Learn more about provincial rules for withdrawals.
The beneficiary may have to pay tax on the portion of each payment that comes from:
government grants and bonds, and
But they won't pay tax on the portion that comes from contributions made to the RDSP.
Read Shannon’s story to learn about the difference an RDSP can make.
Content in this section is provided in partnership with Investor Education Fund, a non-profit organization founded and supported by the Ontario Securities Commission that provides unbiased and independent financial tools to help Canadians make better money decisions. To find out more, go to: GetSmarterAboutMoney.ca