What is the Canada Disability Savings Grant and Bond Program?

The Canada Disability Savings Grant and Bond Program offers two ways in which a disabled person can receive money from the government in the form of grants and bonds deposited into a disabled person’s Registered Disability Savings Plan (RDSP). The grant and the bond can be received at the same time.

The Canada Disability Savings Grant

The Canada Disability Savings Grant is a matching grant in which the government contributes to an RDSP. The government provides grants of up to 300%, depending on the beneficiary’s family income and contribution. The maximum grant amount is $3,500.00 per year, with a limit of $70,000.00 over the disabled person’s lifetime. Canada Disability Savings Grants are paid into the RDSP until the end of the year the disabled person turns 49 years of age. Income tax returns must be filed in order to receive the grant.

With respect to Canada Disability Savings Grant, if the beneficiary’s income is $93,203 or less: for the first $500 contributed into the RDSP, the beneficiary will receive $3.00 for every $1.00 contributed. For the next $1,000.00, the beneficiary will receive $2 for every $1 contributed. The maximum grant for any one year is $3,500.00. The lifetime maximum grant is $70,000.00.

If the beneficiary’s income is above $93,208: for the first $1,000.00 contributed into the plan, the beneficiary will receive $1 for every $1 contributed. The maximum grant for any one year is $1,000.00. The lifetime maximum grant is $70,000.00. A beneficiary may receive the full $3,500.00 grant one year, and $1,000.00 the next year (it is dependent on their income for two years prior).

The amount of Canada Disability Savings Grant you receive will depend on your income tax returns for the previous two years. For a minor, the grant is calculated on the family’s net-adjusted income. For an adult, the grant is based on the beneficiary’s personal net-adjusted income (even if he or she lives with his or her parents). If the beneficiary has a spouse, it is his or her family net-adjusted income.

The Canada Disability Savings Bond

The Canada Disability Savings Bond on the other hand is money the government contributes to the RDSP of low and modest-income Canadians. If you qualify for the bond, you can receive up to $1,000.00 a year, depending on the beneficiary’s family income. Over an individual’s lifetime, the maximum bond is $20,000.00. Canada Disability Savings Bonds are paid into the RDSP until the end of the year the beneficiary turns 49 years of age. You do not need to make any contributions to your RDSP to receive the Bond.

To qualify for the Canada Disability Savings Bond for the 2017 tax year, the family income of the beneficiary cannot be more than $45,916 a year. For incomes between $30,000 and $45,916, the $1,000.00 bond is reduced on a pro-rated basis. The family income threshold is indexed each year to inflation.

You can carry forward any unused annual grant and bond entitlements for 10 years, going back to 2008, when RDSPs were introduced. You can also make catch-up contributions for those years to qualify for matching government grants. You can open an RDSP now, and still claim for grants and bonds going back as far as 2008.

To receive the Canada Disability Savings Bond and the best matching government contributions from the Canada Disability Savings Grant, you must file your income tax returns for the two prior years. Family income is based on the income of the parents until the year that beneficiary reaches age 18, and on the income of the beneficiary (and his or her spouse) beginning the year the beneficiary reaches age 19. To open an RDSP, you must live in Canada, have a social insurance number, and qualify for the Disability Tax Credit. If you need more information, you can contact a qualified lawyer.