# RDSP basics

> How a registered disability savings plan works: who can have one, contributions, government grants and bonds, withdrawals and the tax on them.

- Web page: https://taxnotes.ca/guides/rdsp/
- For: Individuals & families · Topic: Disability and caregiving
- Last reviewed: 2026-10-10

A registered disability savings plan (RDSP) is a long-term savings plan for someone approved for the disability tax credit. Contributions aren't deductible, but the federal government can add grants and bonds, and investment growth isn't taxed until money is paid out of the plan.

## Who can have an RDSP

The person the plan is for (the beneficiary) must:

- be approved for the [disability tax credit](https://taxnotes.ca/guides/disability-tax-credit/) (DTC)
- have a valid social insurance number
- live in Canada when the plan is opened
- be under 60 (a plan can be opened until the end of the year the beneficiary turns 59)

A beneficiary can have only one RDSP at a time, though the plan can have more than one holder (the person or organization that holds the plan and gives permission to contribute). Payments out of the plan go only to the beneficiary, or to their estate after death.

## Contributions

Anyone can contribute with the holder's written permission. Contributions can be made until the end of the year the beneficiary turns 59, and only while the beneficiary lives in Canada. They aren't tax-deductible, and contributors can't get a refund of what they put in.

There's no yearly contribution limit, but there is a lifetime limit for each beneficiary, set out on the CRA's [RDSP limits page](https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/registered-disability-savings-plan-rdsp/rdsp-limits-transfers-rollovers.html).

When a parent or grandparent dies, their RRSP, RRIF or certain registered pension plan proceeds can be rolled into the RDSP of a child or grandchild who depended on them because of an impairment, without immediate tax. A rollover counts toward the lifetime limit and doesn't attract grants.

## Grants and bonds

The Government of Canada can pay two kinds of help into the plan. Employment and Social Development Canada (ESDC) runs both programs.

- **Canada disability savings grant:** matches contributions. How much you get for each dollar depends on the beneficiary's family income and how much is contributed, up to a yearly and a lifetime maximum. Grants can be paid on contributions made until December 31 of the year the beneficiary turns 49.
- **Canada disability savings bond:** for beneficiaries with lower family income. No contribution is needed. Bonds can also be paid until the year the beneficiary turns 49.

Family income means the parents' or guardians' income until the end of the year the beneficiary turns 18, and from the year they turn 19, the beneficiary's own income plus their spouse's or partner's. The CRA's [grant and bond page](https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/registered-disability-savings-plan-rdsp/canada-disability-savings-grant-canada-disability-savings-bond.html) has the current matching rates and maximums, and the income thresholds, which are indexed each year.

Two things help you get the most:

- **File tax returns.** The beneficiary must have filed returns for the past two years and every year they have an RDSP. For a minor, the parents' or guardians' returns are used, but the beneficiary needs to start filing every year from the year they turn 17.
- **Use the carry-forward.** Up to 10 years of unused grant and bond entitlements can be carried forward (for years the beneficiary was eligible), until the end of the year they turn 49. Opening a plan later in life doesn't mean losing every past year's help.

## Taking money out

Payments from an RDSP are called disability assistance payments. Lifetime disability assistance payments must start by the end of the year the beneficiary turns 60 and then continue at least once a year, with a yearly maximum set by a formula.

A payment is generally made up of a non-taxable part and a taxable part. The share that comes from contributions isn't taxed. The share that comes from grants, bonds, investment income and rollovers is income to the beneficiary in the year it's paid out.

## The 10-year repayment rule

Grants and bonds paid into the plan in the 10 years before certain events have to be paid back to the government. When money is withdrawn, the government takes back three dollars of those grants and bonds for each dollar withdrawn, up to the "assistance holdback amount" (generally, the grants and bonds paid in during the past 10 years, less any already repaid). If the plan is closed, stops being registered or the beneficiary dies, the whole holdback amount is repaid.

The rule also applies if the beneficiary loses DTC approval before age 60 and the holder closes the plan or withdraws from it. If a doctor or nurse practitioner certifies that the beneficiary is not expected to live more than five years, special rules (an election the holder makes with the issuer) allow some withdrawals without the repayment.

Because of this rule, an RDSP works best as long-term money. Talk to the plan issuer before taking anything out.

## What to do

1. Get DTC approval first.
2. Open a plan with a participating RDSP issuer and ask about applying for the grant and bond.
3. Make sure the beneficiary (and, for a child, the parents) files a return every year.
4. Plan contributions to make the most of the grant, and leave the money in long enough to avoid repaying it.

## Sources

1. [Registered disability savings plan (RDSP) rules](https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/registered-disability-savings-plan-rdsp.html) (canada.ca)
2. [RDSP: Eligibility and contributions](https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/registered-disability-savings-plan-rdsp/eligibility-contributions.html) (canada.ca)
3. [RDSP limits, transfers, and rollovers](https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/registered-disability-savings-plan-rdsp/rdsp-limits-transfers-rollovers.html) (canada.ca)
4. [Canada disability savings grant and Canada disability savings bond](https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/registered-disability-savings-plan-rdsp/canada-disability-savings-grant-canada-disability-savings-bond.html) (canada.ca)
5. [What types of payments are made from an RDSP](https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/registered-disability-savings-plan-rdsp/payments-rules/what-types-payments-made-rdsp.html) (canada.ca)

Tax figures in this guide come from the TaxNotes.ca rates tables (https://taxnotes.ca/rates/), which cite the Canada Revenue Agency and, for Quebec, Revenu Québec.

Last reviewed: October 10, 2026

How to cite: "RDSP basics", TaxNotes.ca, last reviewed 2026-10-10, https://taxnotes.ca/guides/rdsp/. For a figure or rule, also cite the official source listed above.

Licence: CC BY 4.0 (https://creativecommons.org/licenses/by/4.0/). Free to share and adapt with attribution: https://taxnotes.ca/reproducing-our-content/