Get advice from good people about a RDSP — and be tenacious
The government grant and lifetime bond with the RDSP can reach up to $90,000.
1. Get a Social Insurance Number You need a SIN to both work in Canada and to access government programs and benefits, such as the DTC and the RDSP. New parents can make an application through the Newborn Registration Service , while everyone else can apply at Service Canada. 2. Build a team of experts Getting through the medical paperwork and ticking all the right boxes requires the knowledge and experience of a strong team. The challenge for many is getting the documentation accepted by the Canada Reve- nue Agency, with supporting reports from a physician. This precise documentation often comes with fees. As well, wait lists for specialists versed in the onerous process are common.
The CRA’s frequent rejection of medical decisions was an issue for the Senate standing committee, which recommends moving DTC and RDSP responsibility to Employment and Social Development Canada. But until then, be aware the CRA appeals process is arduous and having access to a diagnosing doctor, specialists, and a foundation or umbrella organization that provides support through the application process may help you navigate the challenges. 3. Apply for the Disability Tax Credit (DTC) With your team assembled, fill out Form T2201 — the Disabili- ty Tax Credit Certificate — and apply to the CRA. If your application is rejected, ask why and try again.
But beware of predatory practices. Due to the complexity of the forms and large sums of financial entitlements offered through the DTC and RDSP, an industry of promoters and consultants has cropped up offering to handle all the paperwork for a significant fee.
Contingency fee consultants should be your absolute last resort, with my preference being “never.” Disability benefits belong in the hands of those who need them most and who often live at the poverty line: disabled Canadians. 4. Interview financial institutions, but beware Find a banker who knows about the RDSP. Ask if there are restrictions; some financial institutions only offer high-fee products, such as mutual funds. Seek out lower-cost options such as ETFs and plans without administration costs. 5. Open an RDSP and collect up to $90K With the DTC in hand, go ahead and open the RDSP. There are two types of government benefits available: the Canada Disability Savings Grant (CDSG) and the Canada Disability Savings Bond (CDSB).
The CDSG provides matching contributions of up to $3,500 annually, with a lifetime limit of $70,000, while the CDSB allows qualifying low-income families to collect $1,000 per year up to a maximum of $20,000.
For those starting a little later, no worries. You can carry forward unused entitlements to a maximum of $10,500 for the CDSG and $11,000 for the CDSB in one year.
Until the process is easier for families and disabled individuals, tenacity is needed.
Kerry K. Taylor is a Toronto-based writer and a freelance contributor for the Star. Reach her at kerry@squawkfox.com