Registered Disability Savings Plan RDSP Myths Debunked

The Registered Disability Savings Plan (RDSP), introduced in 2008, is a powerful savings vehicle designed to help Canadians eligible for the Disability Tax Credit (DTC) build long-term financial security. Despite its value, awareness remains low: a recent Concentra Trust survey found that only about one in six Canadians (roughly 17%) had heard of the RDSP, compared with 86% who knew about tax-free savings accounts (TFSAs) and 81% familiar with registered retirement savings plans (RRSPs). That lack of awareness, combined with several common misunderstandings, means many people who could benefit are missing out on free government grants and bonds and on tax-sheltered growth.

This article addresses five frequent RDSP myths and clears up how the plan works, who can open one, and how government matching grants and bonds function. Read on to better understand how an RDSP can strengthen long-term finances for people with disabilities and their families.

RDSP myth #1: RDSPs are only for children

An RDSP can be opened for both minors and adults. While it’s advantageous to start early to maximize government supports and investment growth, adults can open an RDSP provided they meet eligibility requirements. A parent or legal representative may open an RDSP for a minor. For adults who cannot manage their own affairs, a parent, spouse, common-law partner, adult sibling or legal guardian can set up the account on their behalf. If you want to contribute to someone else’s RDSP—such as a friend or family member—you must obtain written consent from the plan holder. The lifetime contribution limit for an RDSP is $200,000.

Selena Gusikoski, director of registered plans at Concentra Trust, notes both professional and personal experience with RDSPs. She helped her brother establish an RDSP at age 38, which improved his long-term financial outlook. Gusikoski stresses that while you can open accounts later in life, starting early is ideal because the federal government allows applicants to catch up by claiming up to 10 years of missed grant and bond entitlements if they were eligible for the DTC in those earlier years.

RDSP myth #2: You must contribute personally to get government funds

You can receive government supports through an RDSP even if you don’t contribute personally—but eligibility varies by program.

• Canada Disability Savings Grants are matching contributions from the federal government. The grant amount depends on the beneficiary’s adjusted family net income and on how much is contributed to the RDSP. For the 2025 calendar year, the maximum grant is $3,500 per year for families with income up to $114,750 and $1,000 per year for families with incomes above $114,750. The lifetime maximum for matching grants is $70,000.
• Canada Disability Savings Bonds target lower-income beneficiaries and are paid whether or not the beneficiary makes personal contributions. In 2025, families with adjusted family net income of $37,487 or less are eligible for the full $1,000 bond annually; those earning $57,357 or more are not eligible; incomes in between receive a partial bond. The lifetime maximum for bonds is $20,000.

Beneficiaries can also carry forward up to 10 years of unused grant and bond entitlements, provided they met DTC eligibility during those years. That catch-up provision can create a substantial lump sum for those who apply later but were eligible previously.

RDSP myth #3: RDSP withdrawals will trigger disability benefit clawbacks

For most Canadians, RDSP withdrawals do not affect federal disability benefits. RDSP payments are available as single disbursements—disability assistance payments (DAPs)—or as scheduled recurring withdrawals—lifetime disability assistance payments (LDAPs). You can request DAPs at any time; LDAPs must begin by the end of the year the beneficiary turns 60.

Each RDSP payment is a mix of personal contributions, government grants and bonds, and investment earnings. Note that grants and bonds included in withdrawals must generally have been in the account for at least 10 years; otherwise, a portion may be repayable under the RDSP repayment rules. Provincial rules vary, so residents of Quebec, New Brunswick and Prince Edward Island should confirm with their provincial authorities whether provincial disability or income-tested benefits could be affected.

RDSP myth #4: If you work, you can’t open an RDSP

Working does not disqualify you from opening an RDSP. Eligibility hinges on qualifying for the Disability Tax Credit, being a resident of Canada, having a valid Social Insurance Number, and being under age 60 when opening the account. People with a wide range of disabilities and varying abilities to work may still be DTC-eligible and therefore able to open an RDSP. Employment income does not automatically prevent account opening or government matching, although adjusted family net income levels can affect the amount of grants and bonds received.

RDSP myth #5: You can only open an RDSP at a bank

RDSPs are offered by a variety of financial institutions, including banks, credit unions and trust companies. Credit unions, in particular, can offer community-focused service and a member-oriented approach that many families find welcoming when discussing sensitive financial planning matters. Choosing the right institution depends on service preferences, available investment options, and comfort with the advisor or financial team handling the plan.

Why RDSPs matter and where to learn more

Awareness of registered accounts like RRSPs and TFSAs is high, but many Canadians who could benefit from RDSPs remain uninformed. The combination of tax-sheltered investment growth, generous government matching grants, and bonds for low-income beneficiaries makes the RDSP a meaningful tool for building financial resilience for people with disabilities and their families.

Gusikoski emphasizes the importance of spreading knowledge about RDSPs through local financial institutions and community organizations, including credit unions, so more eligible Canadians can take advantage of the program. If you or a loved one may qualify, consider contacting your local credit union or financial institution to discuss opening an RDSP and claiming available grants and bonds.

More about RDSPs:

• What is an RDSP?
• Estate planning and trusts for a beneficiary with a disability
• Disability, income splitting and tax reduction
• How to roll over money from an RRSP to an RDSP?