Registered Disability Savings Plan, Canada Disability Savings Grant and Canada Disability Savings Bond InfoCapsules

Transcription

1 Registered Disability Savings Plan, Canada Disability Savings Grant and Canada Disability Savings Bond s December 19, 2018 Ce document est disponible en français

2 Table of Content Version Date 1 Registered Disability Savings Plan Roles and responsibilities Legislative Authorities Life cycle of an RDSP Holder Primary caregiver Beneficiary Contributions and Rollover of Proceeds Canada Disability Savings Grant Canada Disability Savings Bond Application forms for the grant and the bond Carry forward of grant and bond entitlements Disability Assistance Payment Lifetime Disability Assistance Payment Assistance Holdback Amount Beneficiary with shortened life expectancies Transfers Administrative Activities Errors and Refusal Reasons Communications Maximum and minimum Payments Loss of DTC-Eligibility and DTC Election Disclaimer Consult this page frequently for newer versions. The following laws and regulations take precedence over information contained in s in the event of discrepancies: Income Tax Act Canada Disability Savings Act Canada Disability Savings Regulations December 19, 2018

3 1 Registered Disability Savings Plan A Registered Disability Savings Plan (RDSP) is a long-term savings plan intended to help Canadians with severe and prolonged disabilities and their families save for the future. The Government of Canada provides the Canada Disability Savings Grant (grant) and the Canada Disability Savings Bond (bond) to eligible beneficiaries. The RDSP is a contract between a plan holder and an issuer (financial institution). A beneficiary can only have one RDSP. All funds in the plan are intended to be used solely for the beneficiary. To open an RDSP, the beneficiary must: be eligible for the Disability Tax Credit (disability amount); open a plan before the end of the calendar year in which he or she turns 59; and be a Canadian resident with a valid Social Insurance Number (SIN). Canada Disability Savings Grant The grant may be paid into the RDSP of an eligible beneficiary on or before the end of the calendar year in which he or she turns 49 years of age. A 300% matching grant is paid on the first $500 in contributions made to an RDSP and a 200% matching grant is paid on the next $1,000 in annual contributions, if the beneficiary s family income is $95,259* or below. A beneficiary under the age of 18 may also be eligible for the 300% and 200% matching rate, if he or she is under the care of a department, agency or institution and a payment under the Children s Special Allowances Act (CSAA) is made in at least one month in the particular year. A 100% matching grant is paid on contributions, to a maximum of $1,000 per year, if the beneficiary s family income is greater than $95,259* or if no income information is available from Canada Revenue Agency. The total annual maximum grant a beneficiary can receive is $3,500. There is a carry forward provision for unused grant entitlements accumulated over the previous 10-year period. The maximum grant carry forward amount is $10,500 per year. An RDSP may include the following components: The beneficiary s grant lifetime limit is $70,000. *2019 Income Threshold (previous years) Canada Disability Savings Bond The bond may be paid into the RDSP of an eligible beneficiary on or before the end of the calendar year in which he or she turns 49 years of age. Contributions are not required to receive the bond. The maximum yearly bond available is $1,000, based on the beneficiary s family income. If the family income is $31,120* or less, the bond entitlement is $1,000. A beneficiary under the age of 18 may also be eligible for the $1,000 bond, if he or she is under the care of a department, agency or institution and a payment under the CSAA is made in at least one month in the particular year. If the family income is greater than $31,120 but less than $47,630*, the bond amount is a portion of $1,000 according to a formula. There is a carry forward provision for unused bond entitlements accumulated over the previous 10-year period. The maximum carry forward amount is $11,000 per year. The beneficiary s lifetime limit on bond is $20,000. *2019 income threshold (previous years) December 19, 2018

4 2 Roles and responsibilities The chart below reflects organizational responsibilities, based, in part, on governing legislation. Canada Revenue Agency (CRA) Registered Plans Directorate Administers and applies Registered Disability Savings Plan (RDSP) related provisions in the Income Tax Act (ITA) on: contract registration and termination specimen plan conditions eligibility criteria for holders and beneficiaries contributions, rollovers and transfers disability assistance payments Specified Disability Savings Plans Disability Tax Credit (DTC) election compliance reviews obligations of the issuer qualified investments develops program policies and proposals for amendments offers issuers and the public, support services on matters related to registration and administration of an RDSP: Benefit Program Directorate verifies residency verifies eligibility for the DTC determines level of family income applies ITA related to the DTC Employment and Social Development Canada (ESDC) Canada Education Savings Program Provides the delivery mechanism and necessary system supports for the effective administration of the grant and the bond in accordance with the Canada Disability Savings Act (CDSA) and the Canada Disability Savings Regulations (Regulations) for: beneficiary eligibility for grant and bond assistance holdback amount and repayment obligations carry forward rules and calculation for grant and bond entitlements mail-out of annual Statement of Entitlement to holders to communicate grant entitlements compliance reviews training and reference material transmittal of historical data to issuer when transfer issuer reports issuer enrolment offers support services: issuers: clients : Office for Disability Issues interprets the CDSA and the Regulations and develops proposals for amendments undertakes promotion and communications activities develops program policy and forms develops and updates issuer agreements Financial institutions Issuer Offers and administers RDSPs: signs Issuer Agreement with ESDC submits specimen plan to CRA for approval ensures the accuracy of the information requests CRA to confirm registration of the plan on behalf of the holder submits application for grant and bond to ESDC and deposits funds into the RDSP accepts and deposits contributions on behalf of a beneficiary sends statement of account to the holder transmits transactions electronically to ESDC makes the withdrawals of disability assistance payments from RDSP accounts payable to the beneficiary facilitates the administration of rollovers and RDSP transfers has ultimate responsibility of the RDSPs Agent enters into an agreement with the issuer administers the RDSPs according to the delegation of duties from the issuer Individual Income Tax and Trust Enquiries determines taxation for disability assistance payments provides issuer/public support for tax related questions Social Insurance Registration Office validates Social Insurance Numbers Service provider transmits RDSP transactions records establishes a system compliant with the Interface Transactions Standards August 9, 2016

5 3 Legislative Authorities Canada Disability Savings Act (CDSA) The purpose of the CDSA is to encourage long term savings through Registered Disability Savings Plans (RDSPs) to help people with severe and prolonged disabilities and their families save for the future. Canada Disability Savings Grant (grant) Canada Disability Savings Bond (bond) Annual statement of entitlements The grant is a limited matching grant paid into an RDSP by the Government of Canada. Depending on the beneficiary s family income and contribution level, the Government may contribute funds equivalent to 300%, 200% or 100% of contributions made into, and not withdrawn from, an RDSP in a year. The CDSA establishes the annual and lifetime limits the matching rate and the carry forward of grant entitlements. The bond helps low-income families save for the long-term financial security of an eligible person with a disability. The CDSA establishes the annual and lifetime limits and the carry forward of bond entitlement An eligibility statement, which sets out the amount of grant entitlements that may be paid for particular years on the basis of future contributions, is sent each year to the holder. Canada Disability Savings Regulations (Regulations) The Regulations establish the requirements and conditions for the payment of the grant and the bond. Repayment The repayment of the Assistance Holdback Amount (AHA) which is made up of all the grant and bond that have been paid into the RDSP within a 10 year period and the conditions for the calculation of a proportional repayment. Issuer The terms and conditions of issuer agreements and the collection of information on the beneficiary, the holder, the organization responsible for the beneficiary and on the plan. Income Tax Act (ITA) Section of the ITA allows for the creation of the RDSP for the investment of funds tax-free until those funds are withdrawn from the plan. Key players The holder is the person who opens and administers a plan and designates a beneficiary. If the holder is not the beneficiary, he or she must be a qualifying person. The qualifying person is a legal parent, tutor, curator, legal representative, public department, agency or institution that is authorized to act on behalf of the beneficiary. A qualifying family member is also a qualifying person if they meet certain conditions. The qualifying family member (QFM) is a legal parent or the spouse or common-law partner of the beneficiary who meets certain conditions. The QFM can become a plan holder in cases where the contractual competency of an adult beneficiary is in doubt. The beneficiary is the person who receives the funds from the plan. The Disability Tax Credit (DTC) eligible individual is the person who is eligible for the DTC (a tax credit that reduces the person s income tax). Contributions The beneficiary has a valid Social Insurance Number, is resident in Canada at the time of the contribution, and is DTC eligible when the contribution is made on or before December 31 of the year the beneficiary turns 59 years of age. A contribution is eligible if the cumulative limit of $200,000 is not exceeded. A payment from a designated provincial program, a retirement savings and education savings rollovers and a transfer of funds as a result of moving the RDSP from one issuer to a new issuer are not included as a contribution for the payment of a grant. Payments The ITA establishes the rules for Disability Assistance Payments and Lifetime Disability Assistance Payments, the calculation of the legislated formula and the taxable amount of the payment. Income thresholds Income thresholds are used to determine the matching rate for the grant and the bond. Specified Disability Savings Plan (SDSP) Obligations of issuer The ITA sets out the conditions where an RDSP can be designated as an SDSP and the conditions where a plan ceases to be an SDSP. The issuers : notify the Minister if there is a change of holder and inform the Minister if a plan becomes noncompliant; inform a beneficiary if a qualifying family member has become the holder of the RDSP; may not amend their RDSP s terms and then market it without written approval from the Canada Revenue Agency; and must ensure they administer the plan in a way that minimizes the possibility that a plan holder will pay Part XI tax under the ITA. In order to protect an individual s privacy rights, RDSPs are also governed by: The Privacy Act The Personal Information Protection and Electronic Documents Act September 5, 2013

6 4 Life cycle of an RDSP Administrative activities completed during the Registered Disability Savings Plan (RDSP) life cycle. Opening Sharing of information The issuer provides information to the holder on: eligibility criteria RDSP rules required information Contract signature The holder signs a contract with the issuer. The issuer opens an RDSP. Collection of personal information The issuer collects personal information on: the beneficiary the holder the primary caregiver Information transmission The issuer transmits information to Employment and Social Development Canada (ESDC) on: the beneficiary the holder the contract the primary caregiver Registration Information transmission ESDC transmits information to Canada Revenue Agency (CRA) on: the contract the holder the beneficiary Data verification CRA verifies: beneficiary s Disability Tax Credit (DTC) eligibility beneficiary s residency ESDC verifies: beneficiary s Social Insurance Number (SIN) holder s SIN or Business Number (BN) Contract registration CRA confirms the contract s registration and advises ESDC. Registration status ESDC advises the issuer of the contract s status. Application Contribution Family income Incentives Grants / bonds The holder fills out an application form for the grant and the bond. The holder deposits contributions in order to attract the grant. CRA verifies the beneficiary s family income. ESDC pays the grant and the bond to the issuer. The issuer deposits the grant and bond in the RDSPs. Application Payment Income tax statement Payment The holder requests: disability assistance payment (DAP) lifetime disability assistance payment (LDAP) The issuer remits a payment to the beneficiary. Issuers report the taxable part of the DAP on a T4A slip and sends two copies to the beneficiary or his/her legal representative. Request Opening Closure Application Transfer The holder requests a transfer to a new issuer. The new issuer opens an RDSP. The prior issuer transfers all the funds to the new issuer and closes the RDSP. ESDC sends historical data of the RDSP to the new issuer. The holder fills out an application form for the grant and the bond with the new issuer. Trigger events Repayment Funds in the RDSP Contract closure Closure Depending on the trigger event, for example the death of the beneficiary, the issuer may have to close the RDSP. Grants and bonds are repaid to ESDC (if the regulations regarding the assistance holdback amount apply). The remaining funds are paid out to: the beneficiary, or the beneficiary s estate. The issuer sends the transaction to ESDC to close the contract. August 9, 2016

7 5 Holder The holder is the person responsible for the Registered Disability Savings Plan (RDSP). There must be at least one holder per plan at any time. Who can be a holder? the beneficiary the beneficiary s legal parent a legal representative* including guardian, curator, public department, agency or institution a qualifying family member (QFM)** (legal parent, spouse or common law partner only) * An individual or entity is considered a legal representative if he/she has been appointed as such through the laws of the province in which the beneficiary resides. ** If an issuer has doubts regarding the beneficiary s capacity to establish a contract, a QFM may be the holder if there is no other entity authorized to act on behalf of the beneficiary. This temporary measure is in force from June 29, 2012 to December 31, Holder s Responsibilities Select a financial institution. Sign a contract to open an RDSP. Designate a beneficiary and ensure his/her eligibility. Provide and update information on the beneficiary and the holder. Complete an application for grant and bond. Make contributions. Track RDSP activities. Request payments for the beneficiary. Request transfer. Authorize rollover of proceeds to an RDSP. Designate the RDSP as a Specified Disability Savings Plan (SDSP). Make a Disability Tax Credit (DTC) election to keep the RDSP open at cessation of DTC eligibility. Request the closure of the RDSP. Who can be a holder at the opening of a plan for: Beneficiary Legal Parent Qualifying Family Member Legal Representative a beneficiary who is under the age of majority. No 1 Yes No Yes an adult beneficiary who is contractually competent. an adult beneficiary who is not contractually competent. Yes No 2 No No No No No Yes an adult beneficiary whose contractual competency is in doubt. No No (yes as QFM) Yes No 3 At the opening of the plan, the beneficiary was a minor. When the beneficiary reaches the age of majority, who can be the holder when Beneficiary Legal Parent Legal Representative the beneficiary is contractually competent. the beneficiary is not contractually competent. Yes No The legal parent may remain the holder or one of the holders if he/she was already the plan holder before the beneficiary reaches the age of majority. No Yes 1 Some exceptions may apply. 2 Exception when transferred. 3 If a legal representative is opening an RDSP, then the beneficiary is not contractually competent. December 19, 2018

8 6 Primary caregiver Information on the primary caregiver(s) (PCG) is collected on Annex B of the grant and the bond application form in order to determine the beneficiary s eligibility and family income to be used for grant and bond entitlements. The PCG is the person eligible to receive, and whose name appears on Canada Child Benefit (CCB) payments for the child. A PCG can also be a department, agency or institution that has care of the child and that is eligible to receive the allowance payable under the Children's Special Allowances Act (CSAA). Responsibilities Employment and Social Development Canada (ESDC) validates the PCG information against the Canada Revenue Agency (CRA) CCB database for the purpose of calculating unused grant and bond entitlements that can be carried forward from years where the beneficiary was under the age of majority. An individual PCG must provide: his/her last name and first name; Social Insurance Number (SIN); and consent to the use his/her personal information. A public PCG (department, agency or institution) must provide: the name of agency; the name of agency representative; the business number (BN); and they must also attest that the agency was issued a payment under the CSAA in respect of the beneficiary in at least one month in a particular year and identify the year(s) to which the statement applies. Use of the information The information regarding the PCG is: used to verify the beneficiary s eligibility for the Disability Tax Credit; used to verify the beneficiary s residency; used to verify the beneficiary s family income levels; required for contract registration purposes; required for each grant and bond request submitted to ESDC; and required until the end of the calendar year that the beneficiary turns 18. Shared custody When two parents share the custody of a child, and if ESDC has information on both parents and on their respective income levels, the Canada Disability Saving Program system will use the family income that is the most advantageous for the beneficiary when determining grant and bond amounts. August 9, 2016

9 7 Beneficiary The beneficiary of a Registered Disability Savings Plan (RDSP) is the individual who will receive money from an RDSP. The beneficiary must: have a valid Social Insurance Number (SIN); be a resident in Canada; be eligible for the Disability Tax Credit (DTC); and be 59 years of age or under by December 31 of the year in which the plan is opened. There can only be one beneficiary per RDSP, and only one RDSP per beneficiary. DTC Age of Majority and Residency A DTC is a non-refundable tax credit that can be claimed for a person with a severe and prolonged impairment in physical or mental functions. Individuals who have a severe and prolonged impairment in physical or mental functions, or their legal representative, must use form T2201 to apply for the DTC with the Canada Revenue Agency, by completing Part A of the form. Qualified practitioners certify the effects of the impairment by completing Part B of the form. Loss of DTC Eligibility When a beneficiary is no longer DTC eligible, the plan must be closed no later than December 31 of the year following the year in which he or she was no longer DTC eligible. For example, if a beneficiary is no longer DTC eligible as of January 2013, the RDSP must be closed by December 31, 2014, unless the beneficiary becomes DTC eligible again before then, or makes an election to keep the plan open. DTC Election As of January 1, 2014, when a beneficiary loses his or her DTC eligibility, but his or her condition is such that he or she is likely to become DTC eligible again, the holder can make an election to keep the RDSP open for a period of up to 5 years. A medical doctor must certify in writing the beneficiary is likely to become DTC eligible in the foreseeable future. The age of majority varies from one province to the other. In a province where the age of majority is 19, it is up to the financial institution to determine whether they wish to enter into an arrangement with an 18 year old beneficiary. When a beneficiary reaches the age of majority, if he or she is: contractually competent, he or she can be the holder of an RDSP or co-holder with the legal parent(s) if he/she was already holder of the plan; or not contractually competent, a legal representative will act on his/her behalf. As of June 29, 2012, and until December 31, 2018, to open a plan for an adult beneficiary whose contractual competency is in doubt and who has no legal representative, a qualifying family member (legal parent, spouse or common law partner) can open the RDSP for the beneficiary. The beneficiary must be resident in Canada for: contract registration contributions grant and bond application; and rollover of Registered Retirement Savings Plan, Registered Retirement Income Fund, Registered Pension Plan, Pooled Registered Pension Plan, Registered Education Savings Plan or Specified Pension Plan proceeds into the RDSP. He or she is not required to be a resident of Canada to receive Disability Assistance Payments (DAP) from the RDSP. Shortened-life-expectancy and Death A beneficiary is considered having a shortened-life-expectancy when a medical doctor certifies, in writing, that he or she is not likely to survive more than five years. At the death of the beneficiary, the RDSP must be closed no later than December 31 of the year following the year of the death. All amounts remaining in the plan must be paid out to the beneficiary's estate, except for the Assistance Holdback Amount, which is reimbursed to the Government of Canada. July 15, 2015

10 8 Contributions and Rollover of Proceeds Contributions A contribution is an amount paid into a Registered Disability Savings Plan (RDSP) for the benefit of a beneficiary. Contributions belong solely to the beneficiary. Anyone can contribute to an RDSP with the written permission of the plan holder. Contributions are made in trust to the issuer. Contributions can attract the Canada Disability Savings Grant (grant). Conditions for Contribution The beneficiary is a resident in Canada. The beneficiary is eligible for the Disability Tax Credit (DTC). Contributions can be made until the end of the calendar year in which the beneficiary turns 59. Contributions cannot exceed $200,000. No contribution can be made to an RDSP if the beneficiary is deceased. Contributions are not tax deductible. When a payment is made, the portion associated to the contribution is not taxable. Rollover of Proceeds Rollover of proceeds to the RDSP is the transfer of funds from Retirement savings product and/or an Education savings product. Only the following proceeds can be rollover into an RDSP: Retirement Savings: Registered Retirement Savings Plan (RRSP) Registered Retirement Income Fund (RRIF) Registered Pension Plan (RPP) Pooled Registered Pension Plan (PRPP) Specified Pension Plan (SPP) Education Savings: Investment income from a Registered Education Savings Plan (RESP) Conditions for Rollover of Proceeds The beneficiary is a resident in Canada. The beneficiary is eligible for the DTC. Contributions can be made until the end of the calendar year in which the beneficiary turns 59. Total contributions cannot exceed $200,000. No rollover of proceeds can be made to an RDSP if the beneficiary is deceased. The rollover portion of a payment is taxable at the time the disability assistance payment (DAP) is made. Additional Conditions for Retirement Savings Rollover This rollover is applicable to a beneficiary who was financially dependent of a deceased parent or grandparent. This rollover is permitted in instances in which a beneficiary whose DTC has lapsed and an election was made to keep his or her RDSP open for a period of up to five years. Retirement Savings Rollovers are permitted in a Specified Disability Savings Plan (SDSP). Additional Conditions for Education Savings Rollover In addition to the conditions above, education savings rollover must meet one of the three following conditions: - The beneficiary has a severe and prolonged mental impairment that can reasonably be expected to prevent him/her from pursuing post-secondary education; or - The RESP account has been in existence for at least 10 years and the beneficiary is at least 21 years of age and is not pursuing post-secondary education; or - The RESP has been in existence for more than 35 years. This rollover is not permitted during an election period to keep a plan open or in an SDSP. Amounts not considered as contributions that do not attract grant Payments from a designated provincial program; Amounts transferred from another plan; Retirement savings rollover*; Investment income from an RESP into an RDSP*. *Retirement savings rollover and education savings rollover count as a contribution when determining if an RDSP is a primarily government assisted plan or not. July 15, 2015

11 9 Canada Disability Savings Grant The Canada Disability Savings Grant (grant) is a matching grant paid into a Registered Disability Savings Plan (RDSP) by the Government of Canada. Limits The maximum annual grant limit is $3,500. If there are grant entitlements accumulated (carry forward) 1, the maximum annual limit is $10,500. The lifetime grant limit is $70,000. The deadline to make a contribution eligible to attract a grant is December 31 of the year in which the beneficiary turns 49 years old. Eligibility criteria The beneficiary is eligible for the Disability Tax Credit. The beneficiary is a resident in Canada at the time of the contribution. The beneficiary is 49 year of age or less as of December 31 of the year in which the contribution is made. The beneficiary has a valid Social Insurance Number (SIN). There is no more than $200,000 in contributions in the RDSP. Matching rate Depending on the beneficiary s family income, the Government will provide grants of 300%, 200% or 100% of contribution paid in a calendar year. Each year, the Canada Revenue Agency (CRA) indexes the income levels on which the grant matching rate is established. The grant amount is equal to 300% on the first $500 of contribution and 200% on the next $1,000, if the beneficiary is: a) 18 years old or more in the year preceding the year of the grant request and whose family income is less than or equal to $95,259*; or b) a dependent of an eligible individual whose income is less than or equal to $95,259*; or c) a person for whom a special allowance under the Children s Special Allowances Act is payable for at least one month in the particular year. Income Matching rate Maximum payable Less than or equal to $95,259* 300% on the first $500 $1, % on the next $1,000 $2,000 In any other case, the amount of the grant will be 100% for the contributions made during the year, up to a maximum of $1,000. Income Matching rate Maximum payable Greater than $95,259* or 100% on the first $1,000 $1,000 No income information from CRA *2019 Threshold (previous years) 1 See 12 for further information on grant and bond carry forward entitlements. December 19, 2018

12 10 Canada Disability Savings Bond The Canada Disability Savings Bond (bond) helps low-income and modest-income Canadians with a severe and prolonged disability and their families save for the future. An application for the bond must be made. No contribution is required to receive a bond. Annual bond amounts are determined based on the beneficiary s family income 1. The family income thresholds are indexed each year by the Canada Revenue Agency. To receive a bond, the family income of the beneficiary must be determined. If the beneficiary is: 18 years of age or younger: o the primary caregiver, who is the person who receives the Canada Child Benefit (CCB), must file an income Limits o tax return; or if a department, institution or agency responsible for the care of the beneficiary receives payments under the Children s Special Allowances Act; over 18 years of age: o the beneficiary s income tax return must be filed. The maximum annual bond is $1,000. The lifetime limit is $20,000. If there are unused bond entitlements (carry forward) 2, the maximum annual bond limit is $11,000. The cut-off date to receive a bond application is December 31 of the calendar year in which the beneficiary turns 49 years old. Eligibility criteria Eligibility For beneficiaries under the age of 18 For beneficiary over the age of 18 Disability Tax Credit (DTC) Residency The beneficiary must be eligible for the DTC when the application for bond is made. The beneficiary must be a resident in Canada at the time of the application for the bond and immediately before the payment of the bond. Social Insurance Number (SIN) or Business number (BN) The SIN of the beneficiary, holder and primary caregiver are valid. The BN of the department, institution or agency maintaining the beneficiary in care is valid. The SIN of the beneficiary and holder are valid. The BN of the department, institution or agency maintaining the care of the adult beneficiary is valid. Matching rate Family income Bond payment $31,120* or less $1,000 Greater than $31,120* but less than or equal to $47,630* Up to $1,000 Based on a formula as identified in the Canada Disability Savings Act (CDSA): $1,000 - [$1,000 x (A-B)/(C-B)] Where: A = Family income B = $31,120 C = $47,630 *2019 Threshold (previous years) 1 2 The family income for a particular year is determined for the year that ended on December 31 of the second preceding year. See 12 for further information on grant and bond carry forward entitlements. December 19, 2018

13 11 - Application forms for the grant and the bond To apply for the Canada Disability Savings Grant (grant) and/or Canada Disability Savings Bond (bond), the holder must complete and sign: 1. APPLICATION for the Canada Disability Savings Grant and/or Canada Disability Savings Bond ESDC EMP 5608E 2. ANNEX A Joint Holder (if applicable) ESDC EMP 5609E 3. ANNEX B Primary Caregiver (if applicable) ESDC EMP 5610E APPLICATION FORM To be completed and signed by the holder. Where there are joint holders, Annex A must be completed. Names must be entered exactly as they appear on Social Insurance Number (SIN) documentation. Section 1 (Information About the Beneficiary) Section 2 (Information About the Holder) Section 3 (Declaration of Refusal) Section 4 (Declaration and Consent of the Holder) Section 5 (Declaration and Consent of the Beneficiary) Provide the information requested about the beneficiary of the Registered Disability Savings Plan (RDSP). Complete this section only if the holder is different from the beneficiary of the RDSP. To be completed only if the holder does not wish to receive grant or bond. The holder must read and sign this section to receive grant and bond. This field is mandatory for the application to be processed. The beneficiary must sign the declaration of consent by December 31 of the year he/she turns 18 years of age. Where there is an existing plan, if the previous form (under 18) was used to apply for the grant and bond, issuers can use this section to obtain the beneficiary s consent to use and share their personal information. In cases where there is doubt about an adult beneficiary s capacity to provide informed consent, a qualifying family member, legal representative or agency should sign Section 5 on behalf of the beneficiary. Starting in the year the beneficiary turns 19, his/her personal information is used to establish the family income to determine the grant and bond matching rates. ANNEX A - Joint Holder To be completed when there is more than one holder. Annex A can be used to add a beneficiary as a holder for an existing plan when the beneficiary reaches the age of majority. 1 A separate Annex A must be completed for each joint holder of the RDSP not already identified on the application form. ANNEX B - Primary Caregiver A primary caregiver (PCG) is the person primarily responsible for the care and upbringing of a child. A PCG can be an individual or a public entity (formerly known as the eligible individual ). Annex B is to be completed if the beneficiary was under the age of 18 at any time in the previous 10 years (starting in 2008), and was eligible to receive a Disability Tax Credit (DTC) for any of those years; the beneficiary may be entitled to receive grant and bond from those previous years (carryforward). The personal information of the PCG from these previous years is used to determine the family income for a particular year, as well as to validate the beneficiary s residency and DTC eligibility. All PCGs for each of these years will need to complete a separate Annex B. 1 The age of majority differs from province to province. Issuers should have policies in place to guide their staff in this regard. October 31, 2016

14 12 Carry forward of grant and bond entitlements As of January 2011, Registered Disability Savings Plan (RDSP) holders can claim unused grant and bond entitlements from the past 10 years (going back no farther than 2008). Any grant entitlement that the beneficiary has accrued is paid to the beneficiary s RDSP upon receipt of a contribution. Carry forward applies to all RDSP, regardless of when the plan was registered. The maximum annual amounts are $10,500 in Canada Disability Savings Grant (grant) entitlements and $11,000 in Canada Disability Savings Bond (bond) entitlements. To access unused entitlements The beneficiary must: be a Canadian resident at the time the eligible contribution is made and for each year of entitlement; have a valid Social Insurance Number; be eligible for the Disability Tax Credit at the time the contribution is made and for each year of entitlement; and apply for the bond and/or make a contribution on or before December 31 of the calendar year in which the beneficiary turns 49 years old. The lifetime limit of $200,000 in contributions must be respected when carry forward amounts are being accessed. Grant and bond entitlements Since January 1, 2011, balances of available unused grant and bond entitlements are determined and maintained by Employment and Social Development Canada (ESDC). Carry forward entitlement for grant The matching rate on unused grant entitlements is the same as that which would have applied had the contribution been made in the year that is being carried forward. Matching grant rates 1 of 300%, 200% and 100% are based on the beneficiary s family income, starting no earlier than Entitlements are paid in descending order, using the highest available matching rate first, from oldest to newest, followed by those at lower rates. Carry forward entitlement for bond As of 2011, the bond carry forward amount will be paid in February of the same calendar year as entitlement or when the bond is requested (whichever comes first), starting no earlier than Statement of entitlement A statement of entitlement is sent to all RDSP holders at the beginning of the calendar year to inform them of the amount of grant and/or bond entitlements available for the beneficiary, as well as the amount of contributions required to maximize the amount of grant that can be paid for that calendar year. Example of grant entitlement calculation In 2010, Peter opens an RDSP. In 2008 and 2009, he was eligible for a matching rate of 100%. Since 2010, he is eligible for a grant matching rate of 300% and 200%. Each year, grant entitlements accumulate. In 2013, Peter made a contribution of $4,000.The first $2,000 of the contribution attracted all accumulated entitlements at 300% (2010, 2011, 2012 and 2013); the next $2,000 attracted the two oldest entitlements at 200% (2010 and 2011). Peter s $4,000 contribution attracted a total of $10,000. In 2014, the first $500 of a $4,500 contribution attracted the 300% grant entitlement (for 2014), the next $3,000 of the contribution attracted three entitlements at 200% (2012, 2013 and 2014), and finally, the last $1,000 of the contribution attracted the oldest entitlement at 100% (2008). Year Contribution 300% 200% 100% Paid 2008 $1, $1, $1,500 $2, $1,500 $2, $1,500 $2, $4,000 $1,500 $2,000 $10, $4,500 $1,500 $2,000 $8,500 1 See 9 for further information on matching grant rate. August 9, 2016

15 13 Disability assistance payment A disability assistance payment (DAP) is a payment made from a Registered Disability Savings Plan (RDSP) to the beneficiary or his/her estate. A DAP includes a proportion of each of the amounts available for payments. Types of payment Disability assistance payment Payment that can be made on request to a beneficiary or his/her estate. Lifetime disability assistance payment (LDAP) Payment which, once started, is payable at least annually until the beneficiary s death or the plan is terminated. Conditions for a DAP The specimen plan permits a DAP. The holder requests a DAP*. A DAP cannot be made from a plan if the fair market value (FMV) of the plan, after the payment, will be less than the assistance holdback amount (AHA). 1 *In a year when the RDSP is considered to be a primarily government assisted plan (PGAP), a beneficiary aged 27 to 58 can request a DAP without the holder s consent. Any other time, holder consent is required. Regular year 2 withdrawal rules of a DAP from an RDSP As of January 1, 2014 for a yearly withdrawal Maximum withdrawal for a beneficiary at any age. Minimum withdrawal for a beneficiary beginning the year he/she turns 60. Primarily government assisted plan (PGAP) The amount of DAP and LDAP that is the greater of the following amount: a) Amount of the legislative formula 3 result or b) 10% of the FMV of assets in the RDSP 4 Plan in which private contributions are greater than government contributions (non-pgap) There is no maximum DAP limit. The amount of DAP is combined with LDAP. The result of the two amounts must be equal to the amount determined by the legislative formula. Proportional repayment rules As of January 1, 2014 Applies to DAP and LDAP The issuer repays to the Government of Canada the lesser of the following amounts: $3 for every dollar that is withdrawn; or the AHA before the payment. Taxation The portion of the DAP coming from the grants, the bonds and the earnings is taxable to the beneficiary or his/her estate. The rollover portion of a DAP is taxable. The portion of the DAP coming from contribution is non-taxable. 1 The AHA is the total amount of grants and bonds paid into an RDSP within a 10 - year period before a particular time, less any amount that has been repaid to the Government of Canada. See 15 for further information. 2 A regular year is any year that is not a specified year. 3 Income Tax Act, legislated formula, paragraph 146.4(4)(l). 4 As defined under the term specified maximum amount in subsection 146.4(1) of the Income Tax Act for full calculation. August 9, 2016

16 14 Lifetime disability assistance payment Lifetime disability assistance payments (LDAPs) are payments that, once they begin to be paid, are payable at least annually to the beneficiary, until he/she dies or until the plan is terminated. Rules related to LDAPs Payments must begin no later than December 31 of the calendar year in which the beneficiary turns 60 years of age. The total amount of LDAP paid in a calendar year cannot exceed the amount determined by the legislated formula 1. The holder makes a request to initiate the payment of the LDAP. In a primarily government assisted plan (PGAP), a plan in which government contributions are greater than private contributions, a beneficiary aged 27 to 58 can request an LDAP without the holder s consent. Contributions can be made even if the beneficiary receives an LDAP 2. The beneficiary does not have to be resident in Canada to receive an LDAP. A beneficiary can receive disability assistance payments (DAPs) and LDAPs at the same time. Proportional repayment rules apply to DAPs and LDAPs, if there is an assistance holdback amount (AHA) that applies. An LDAP cannot be made from a plan if the fair market value (FMV) of the plan, after the payment, will be less than the AHA. Regular year 3 withdrawal rules of an LDAP from an RDSP As of January 1, 2014 for a yearly withdrawal Maximum withdrawal for a beneficiary of any age. Minimum withdrawal for a beneficiary beginning the year he/she turns 60. Primarily government assisted plan (PGAP) The amount of DAP and LDAP that is the greater of the following amount: a) Amount of the legislative formula result or b) 10% of the FMV of assets in the RDSP 4 Plan in which private contributions are greater than government contributions (non-pgap) The yearly amount of LDAP cannot be more than the amount determined by the legislated formula. If there is a withdrawal when the beneficiary is under 60 years, the minimum amount is $1. The amount of the legislative formula result. If a DAP is paid, it is combined with the LDAP. The result of the two amounts must be equal to the amount determined by the legislative formula. Taxation In general, the portion of the LDAP coming from the grants, the bonds and the earnings is taxable to the beneficiary or his/her estate. The rollover portion of an LDAP is taxable. The portion of the LDAP coming from contributions is non-taxable. 1 Income Tax Act, legislated formula, paragraph 146.4(4)(l). 2 Contribution rules must always be followed see 8 for further information. 3 A regular year is any year that is not a specified year. 4 As defined under the term specified maximum amount in subsection 146.4(1) of the Income Tax Act for full calculation. August 9, 2016

17 15 Assistance holdback amount The assistance holdback amount (AHA) is the total amount of grant and bond paid into an RDSP within a 10-year period before a particular time, less any amount of grant and bond that has been repaid to the Government of Canada. The Registered Disability Savings Plan (RDSP) is a long-term savings plan intended to help Canadians with severe and prolonged disabilities and their families save for the future. Requiring the repayment of grant and bond paid within the last 10 years encourages this long-term savings objective. When a certain event occurs, the financial institution must repay all or a portion of the AHA to the Government of Canada. Trigger events Closure of the RDSP Non-compliance of the RDSP Death of the beneficiary Loss of eligibility for the Disability Tax Credit (DTC) by the beneficiary Payment of a Disability Assistance Payment (DAP) and Lifetime Disability Assistance Payment (LDAP) Ten-year rule In the case of a DAP, the Canada Disability Savings Program system uses the date on which the grant or the bond was paid, and not the grant or the bond request date for the repayment of the AHA. For example: Grant request Grant payment Trigger event AHA period The holder makes a contribution in December 2010 and requests a grant. The grant is paid in the RDSP in March In February 2021, a DAP is requested by the holder. The repayment period is from February 2011 to February 2021 (which would include the payment of the December 2010 grant request). Proportional repayment rule When a withdrawal (DAP or LDAP) is made, the financial institution repays to the Government of Canada the lesser of the following amounts: $3 for every dollar withdrawn; or the AHA before the payment Example: $3 for every dollar withdrawn A beneficiary opened an RDSP in 2010 and received $21,000 in grant and bond. In 2017, the beneficiary withdraws $5,000 from the plan. In this case, the proportional repayment amount ($15,000) is lower than the AHA ($21,000). The beneficiary must repay $15,000. Example: The AHA before the payment A beneficiary opened an RDSP in 2010 and received $14,500 in grant and bond. In 2017, the beneficiary withdraws $5,000 from the plan. The beneficiary must repay $14,500 as the AHA is lower than the proportional repayment amount. Impact on the grant and the bond lifetime limits Any amount of grant and bond repaid to the Government of Canada cannot be replenished. For example, If the total amount repaid to the Government of Canada is $11,000 in grant and $4,000 in bond, then the total possible payments that could be provided by the Government of Canada in the future would be $59,000 (i.e. $70,000 - $11,000) in grant and $16,000 ($20,000- $4,000) in bond. December 7, 2017

18 16 Beneficiary with shortened life expectancy A beneficiary is considered as having a shortened life expectancy when a medical doctor or nurse practitioner attests, in writing, that the beneficiary s health condition is such that the beneficiary is not likely to survive more than five years. When a beneficiary has a shortened life expectancy, the holder has two options: keep the plan as a Registered Disability Savings Plan (RDSP) which is now in a specified year; or designate the plan as a Specified Disability Savings Plan (SDSP). Specified year A specified year begins when the issuer receives the medical certificate and continues for: each of the five years following the date of the attestation signed by the medical doctor or nurse practitioner if the beneficiary has an RDSP in a specified year. (Note that these five years are reduced if the medical certificate is not given to the issuer in the first year); or each subsequent year if the beneficiary has an SDSP. RDSP in a specified year The assistance holdback amount (AHA) or the proportional repayment rule applies. Payments may be made at any time. (The lifetime disability assistance payment (LDAP) must start by the end of the calendar year in which the beneficiary turns 60 years of age. The annual LDAP must not be less than the legislated formula result). The legislated formula used for the calculation of the payment does not apply when the beneficiary is 59 years of age or less. There is no annual maximum payment limit. If the beneficiary survives more than five years, the plan automatically reverts back to being an RDSP in a regular year. SDSP conditions SDSP No AHA or proportional repayment required. Payments must start before December 31 of the calendar year following the year the plan was designated as an SDSP. The minimum annual withdrawal is equal to the amount determined by the legislated formula. (This measure does not apply to the first year the plan is an SDSP). Annual withdrawal limit of $10,000 from the taxable amount or no maximum if the formula results in a taxable amount that is greater than $10,000. The plan remains as an SDSP until the holder requests that the designation be removed or one of the SDSP conditions is broken. The beneficiary must be Disability Tax Credit eligible No contribution is allowed No grant or bond is paid No payment from a designated provincial program is paid Unused grant and bond entitlements will not be carried forward except for the calendar year in which the election is made No education savings rollover is allowed Retirement savings rollover is allowed If any of the SDSP rules is not respected or if the Canada Educations Savings Program (CESP) receives notice that the holder has chosen to remove the SDSP designation, the plan becomes either an RDSP in a specified year or an RDSP in a regular year. The categorization depends on how many of the five years, if any, are left from when the medical attestation was signed and given to the RDSP issuer. The RDSP will be subject to the rules that apply to the RDSP categorization. Reversal of an SDSP election The holder can reverse the SDSP designation at any time by providing a written notice to the issuer, who must then inform the CESP. When an election is reversed, either the RDSP in a specified year payment rules or the RDSP in a regular year payment rules apply and no grant or bond will be paid until the year following the election reversal. The holder can make a subsequent election no sooner than 24 months after the previous election ceases by submitting a new shortened life expectancy medical certificate to the issuer. September 10, 2018

19 17 Transfers The assets in a Registered Disability Savings Plan (RDSP) can be transferred from one RDSP to another. A transfer is completed when all funds have been transferred, the relinquishing RDSP is closed and the receiving RDSP is registered. Conditions for a transfer: A transfer must be done for the same beneficiary. All funds must be transferred (no partial transfers allowed). If there is more than one holder, all holders of the relinquishing RDSP must consent to the transfer. Note: A transfer may occur regardless of the age of the beneficiary. The beneficiary does not have to be a resident in Canada at the time of the transfer. Transfer process 1. Holder(s) of the new RDSP Completes a new Application for the Canada Disability Savings Grant (grant) and Canada Disability Savings Bond (bond) and applicable annexe(s) with the receiving issuer. Fills out sections 1 and 2 of the RDSP Transfer form (ESDC EMP5611). Informs the relinquishing issuer of the intent to transfer all of the assets to a new RDSP. 2. Receiving issuer Fills out section 3 of the RDSP Transfer form. Sends the RDSP Transfer form to the relinquishing issuer. 3. Relinquishing issuer Verifies that all pending grant and bond have been received. Stops all pre-authorized contributions or payments on the RDSP account. Sends a stop bond payment request transaction to the Canada Disability Savings Program (CDSP) system. Fills out sections 4 and 5 of the RDSP Transfer form and keeps a copy. Sends the signed original of the RDSP Transfer form back to the receiving issuer. 4. Holder(s) of the prior RDSP Completes the Holder Consent to an RDSP Transfer form (ESDC EMP5612) and keeps a copy. 5. Relinquishing issuer Keeps the signed original of the Holder Consent to an RDSP Transfer form and sends a copy to receiving issuer. 6. Receiving issuer Keeps a copy of the Holder Consent to an RDSP Transfer form. Keeps the completed and signed original RDSP Transfer form. Sends transactions related to the contract registration package to the CDSP system to register the new RDSP. Makes sure that the transfer indicator is set to Yes and that the relinquishing contract and specimen plan numbers are accurately referenced (i.e. including applicable leading zeros). Continues any lifetime disability assistance payments (LDAPs), if they had started prior to the transfer. 7. Relinquishing issuer Transfers all funds to the receiving issuer. Provides the receiving issuer with all information that is not available through the CDSP system, for example medical certifications, elections and forms for retirement savings and/or education savings rollovers. Submits the close a contract transaction as well as a transfer reporting of FMV and earnings amounts transaction to the CDSP system. 8. Employment and Social Development Canada Provides the receiving issuer with all successfully processed financial transactions for earlier contracts using the transfer information extract file. Advises issuers of unresolved transfers through monthly reports. Troubleshooting Tips Receiving Issuer: In RT An error code 8231 could mean the transfer indicator was not set to Yes in your registration package. In RT 801 An error code 8104 could mean that the receiving issuer failed to indicate the relinquishing issuer s contract number in the other contract field. In RT 801 An error code 8102 could mean either that the relinquishing contract was never registered and does not exist as an RDSP or that the contract number has been mistyped (common error is the absence of leading zeros). In RT 951 A contract status of pending and a current transfer status of awaiting transfer could mean that relinquishing issuer has not yet sent the required close a contract transaction to the CDSP system. Relinquishing Issuer: If grant and/or bond is received after an RDSP has been transferred out, send the funds to the receiving issuer. Closing the RDSP paper file is insufficient. An RT close a contract transaction must be sent to the CDSP system. For more information on how to correct errors and interpret refusal reasons, see Annex A Understanding error codes and Annex B Understanding refusal reasons of the RDSP provider user guide. August 9, 2016

20 18 Administrative Activities The following table illustrates the issuer enrolment process and the administrative activities throughout the Registered Disability Savings Plan (RDSP) life cycle. ISSUER Enrolment Process RDSP Life Cycle Transactions Error Reports Transaction Processing Report Grants and Bonds Payments Transfers Rollovers Submits a specimen plan to Canada Revenue Agency (CRA). Enters into an Issuer Agreement with Employment and Social Development Canada (ESDC). Signs an Agency Agreement if there is delegation of duty. Passes the Industry Testing with ESDC. Transmission of transactions to ESDC: - 101: Contract registration information - 102: Contract update - 201: Beneficiary and holder update - 202: Consent update Upon receipt: - corrects errors; - resubmits transactions. Upon receipt: - reviews Refusal Reasons; - informs holder, corrects and resubmits if necessary : Financial transactions - 501: Election transactions - 701: RDSP Fair Market Value reporting Receives grants and bonds from ESDC. Pays grants and bonds in RDSPs. Provides a statement of account to the holder. Repays grants and bonds to the Government of Canada, if applicable. Makes Disability Assistance Payments (DAP) and/or Lifetime Disability Assistance Payments (LDAP) to beneficiary. Transfers funds to the new issuer. Transfers information not held by ESDC to the new issuer. Submits transactions to ESDC. Terminates the prior plan. Receives rollover and deposits into RDSP. ESDC Enrolment Process RDSP Life Cycle Information Transactions Reports to issuers Grants and bonds Transfers Enters into an Agreement with issuer. Collects Issuer information. Sends out information to CRA and the Social Insurance Registry such as the: - beneficiary s and holder s Social Insurance Number (SIN); - holder s business number; - beneficiary s and holder s name and address; - beneficiary s primary caregiver. Processes transactions sent by issuers. Sends: - Error File (.err) - SIN Usability File (.sur) - Transaction Processing File (.pro) - Transfer Information Extract File (.xfr) - Contract Status File (.reg) - Beneficiary DTC Eligibility File (.dtc) Pays grants and bonds to issuers. Submits RDSP data history report (971) to the new issuer through the transfer information extract file (.xfr). Enrolment Process Provides to issuer a unique identifier. Approves issuer specimen plans. CRA RDSP Life Cycle Registration Verification Validates contract, holder and beneficiary information. Registers plan. Verifies: - beneficiary eligibility for the Disability Tax Credit; - beneficiary residency and family income; - RDSP compliance with registration rules. July 15, 2015

21 19 Errors and Refusal Reasons Financial institutions send Employment and Social Development Canada (ESDC) all transactions compiled during the month. The Canada Disability Savings Program (CDSP) system processes these transactions and a report file is sent to the financial institution. *Appendix A of the RDSP Provider User Guide ** Appendix B of the RDSP Provider User Guide Frequent Errors and Proposed Resolutions ERROR DESCRIPTION RESOLUTION 8102 Is not identified in the CDSP Review the transaction and ensure that the data corresponds to data system previously validated by the CDSP system for the concerned RDSP. (The data that can be affected is the issuer s business number (BN), specimen plan, holder and beneficiary Social Insurance Number (SIN) and contract number.) 8105 Invalid SIN Ensure that the SIN is corrected and matches the SIN provided by the client. If the data originally submitted appears to be correct, refer the client to the Social Insurance Registry to verify what information they hold Date is of a future reporting period Ensure the date provided is on or before the current reporting period end date set by the CDSP system Contract is not currently Verify the contract number and beneficiary SIN data submitted to the associated to the Beneficiary 8235 Contract is not currently associated to the specimen plan CDSP system. If there are no errors, contact Issuer Support. Ensure there are no errors in the specimen plan submitted to the CDSP system, and that the contract was not already submitted. Frequent Refusal Reasons and Proposed Resolutions REFUSAL DESCRIPTION RESOLUTION 01 Maximum current entitlement of grant/bond paid Generally no action is required. If needed, contact Issuer Support for more information at Beneficiary DTC eligibility not Refer the holder to CRA to confirm DTC. confirmed 04 Age of beneficiary No further action is required as grant and bond will not be paid after the end of the year in which the beneficiary turned 49 years of age. 06 No grant requested Confirm that grant was to be requested for the contribution and if "yes", submit a contribution correction transaction for the same amount as the original contribution, and ensure the flag is set to "Yes". 19 Contract not registered Use the Contract Status Report to determine why the contract is not registered and re-submit the 101 transactions. Once contract registration transactions are properly processed, re-submit the refused grant/bond transaction (s). July 15, 2015

22 20 Communications Communications may be sent between the following partners: financial institution holder beneficiary Canada Revenue Agency (CRA) Canada Education Savings Program (CESP)* Originator Reasons Receiver Ongoing activities To send Registered Disability Savings Plan (RDSP) Statement of Account. To report the amount of the Lifetime Disability Savings Payment (LDAP). For additional information relating to an error report or a transaction refusal reason. To address any changes that have an impact on the RDSP, such as: the specimen plan; or new measures in a federal budget. Beneficiary turning 18 years old Have the beneficiary sign the application form for grant and bond. To inform that the beneficiary can become a holder or co-holder of the RDSP if he or she is contractually competent. (In a province where the age of majority is 19, it is up to the financial institution to determine whether they wish to enter into an arrangement with an 18 year old beneficiary.) Holder Financial institution Beneficiary is 60 years old To inform that LDAP has to start to be paid by December 31 of the year the beneficiary becomes 60 years of age. CRA CESP and CRA Qualifying Family Member When a Qualifying Family Member opens an RDSP on behalf of the beneficiary. To advise on who can replace the Qualifying Family Member as the holder: a legal representative; or the beneficiary if he/she is recognized as contractually competent RDSP When the RDSP is non-compliant. When the RDSP will become non-compliant. Specified Disability Savings Plan When the holder converts an RDSP into a Specified Disability Savings Plan. Holder When there is an update concerning the holder (new holder, removal or replacement of a holder, added a joint holder). Non-compliance When a plan is nullified. When a plan is de-registered. Information To send information on: changes that have an impact on the financial institution; new federal budget measures; new forms; or new procedures. Beneficiary CRA CESP Financial institution Financial institution *The CESP provides the delivery mechanism and necessary system supports for the effective administration of the grant and the bond. September 17, 2015

23 21 Maximum and minimum payments Outlined below are the maximum and minimum Registered Disability Savings Plan (RDSP) payment rules effective as of January 1, 2014, for the amount of disability assistance payment (DAP) or lifetime disability assistance payment (LDAP) that can or must be withdrawn from an RDSP or from a specified disability savings plan (SDSP) in a year. In any case, a payment cannot be made from a plan if the fair market value (FMV) of the plan, after the payment, will be less than the assistance holdback amount (AHA). RDSP in a regular year payments Before the end of the year in which the beneficiary turns 59 Beginning the year that the beneficiary turns 60 Maximum amount Minimum amount Maximum amount Minimum amount Primarily government assisted plan (PGAP) Plan in which private contributions equal or exceed government contributions (non-pgap) DAP LDAP DAP+LDAP DAP LDAP DAP+LDAP The greater of the formula result and 10% of RDSP FMV** No minimum Always combined with LDAP Formula result* The greater of the formula result and 10% of RDSP FMV $1.00 $1.00 Formula result The greater of the formula result and 10% of RDSP FMV Formula result No maximum No minimum No maximum Always combined with LDAP Formula result No maximum $1.00 $1.00 Formula result No maximum Formula result In a PGAP year, where government contributions are greater than private contributions, a beneficiary aged 27 to 58 can request a DAP or LDAP without the holder s consent. Any other time, holder consent is required. RDSP in a specified year payments Before the end of the year in which the beneficiary turns 59 Beginning the year that the beneficiary turns 60 Maximum amount Minimum amount Maximum amount Minimum amount RDSP in a specified year DAP LDAP DAP+LDAP No maximum No minimum $1.00 $1.00 Always combined with LDAP SDSP in a specified year payments Beneficiary any age Maximum amount Minimum amount No maximum Formula result SDSP DAP LDAP DAP+LDAP $10,000 in taxable amount or no maximum if formula results in taxable amount are greater than $10,000 Formula result * Income Tax Act, legislated formula, section **As defined under the term specified maximum amount in subsection 146.4(1) of the Income Tax Act. August 9, 2016

24 22 Loss of DTC eligibility and DTC election Canada Education Savings Program A beneficiary must be eligible for the Disability Tax Credit (DTC) as one of the conditions for a Registered Disability Savings Plan (RDSP) to be opened and to remain open. Loss of DTC eligibility The RDSP of a beneficiary must be closed no later than December 31 of the second consecutive year of DTC-ineligibility if the holder does not make a DTC election to keep the plan open up to five years. Upon closing an RDSP, all grants and bonds paid into an RDSP within the last 10 years up to the current date (that have not already been repaid) must be repaid to the Government of Canada. This is called the Assistance Holdback Amount (AHA). DTC election An RDSP for whom a beneficiary is DTC-ineligible may remain open for a period of up to five years if the holder elects to do so by December 31of the second consecutive year of DTC-ineligibility and meets the following conditions: Conditions for a DTC election A medical doctor or a nurse practitioner must certify, in writing, that the beneficiary will likely become DTC-eligible in the foreseeable future. The holder must make an election to keep the plan open. The beneficiary must have been DTC-eligible in the year immediately before the two year period in which the holder can make the election. The issuer must notify Employment and Social Development Canada (ESDC) by sending the appropriate transactions. Rules that apply when an election is requested Contributions to the RDSP are not allowed. Retirement savings rollovers are allowed, but education savings rollovers are not allowed. No payment of grant nor bond. No grant nor bond entitlements (carry forward) are generated. Withdrawals from the RDSP are allowed, but are subject to the repayment rules. Plan must be closed by the end of the sixth year, following five years of continuous DTC-ineligibility. The AHA will not have to be repaid during the election period unless a withdrawal is made, or if another trigger event occurs. If the plan must be closed at the end of the election period due to continuous DTC-ineligibility, the AHA will need to be repaid (10 years back from the date the DTC-eligibility was lost, up until the current date). DTC eligibility reconfirmed If a beneficiary regains DTC-eligibility, the DTC election will automatically be cancelled and the RDSP will be governed by all the other applicable rules. If a trigger event occurs after the beneficiary regains DTC-eligibility, the AHA period is calculated starting 10 years before the trigger event. May 31, 2018