How the payments work
The beneficiaryBeneficiary The person(s), institution, trustee or estate you choose to give money, property or other benefits when you die. You may name beneficiaries in your will, insurance policy, retirement plan, annuity, trust or other contracts.+ read full definition can make withdrawals from the plan at any time, called disability assistance payments (DAPs). DAPs are subject to withdrawal rules – part or all of the assistance holdback amount, the total of the grants and bonds that have been paid into the RDSPRDSP See Registered Disability Savings Plan.+ read full definition in the last 10 years, will need to be repaid if a withdrawal is made.
Lifetime disability assistance payments (LDAPs)
The beneficiary must begin receiving regular payments, called lifetime disability assistance payments (LDAPs) no later than the end of the year they turn age 60. If LDAP payments don’t start by age 60, the beneficiary will no longer qualify for the Disability Tax Credit. Once the payments start, they must be made at least annually until the beneficiary dies or the plan is closed.
The maximum annual payment amount is based on a formula set by the CRA. The formula takes into account the value of the plan and the life expectancy of the beneficiary. Talk to your financial institution about payment amounts and frequency.
Estimate future payments
Use this calculator to do the math. It estimates what your RDSP could be worth in the future and the potential payments you could receive.
Payments don’t affect other government benefits
Payments do not affect a beneficiary’s eligibility for:
- federal benefits like the HST credit and the Canada Child Tax Benefit, and
- provincial benefits in most provinces. Learn more about provincial rules for withdrawals.
The beneficiary may have to pay tax on the portion of each payment that comes from:
- government grants and bonds, and
- investment earnings.
But they won’t pay taxTax A fee the government charges on income, property, and sales. The money goes to finance government programs and other costs.+ read full definition on the portion that comes from contributions made to the RDSP.
3 key points
- Regular payments must start by age 60
- Payments must be made at least annually
- Payments are taxable to the extent they exceed contributions