Flaherty Makes Disability Savings Plan More Accessible

Flahertyfp-bin Finance Minister Jim Flaherty continues to be a champion for people with disabilities and their families.  He intends to correct a procedural barrier to eligibility for the Disability Tax Credit (DTC).  Eligibility for the Disability Tax Credit is the only way to become eligible to establish a Registered Disability Savings Plan (RDSP). The current problem is that you can't appeal to the Tax Court of Canada should the Canada Revenue Agency turns down your original application for the DTC  if you have no taxable income. You can only appeal if you have taxable income.

Since the purpose of the RDSP is to get money directly into the bank accounts of people with disabilities, Minister Flaherty will introduce legislative amendments to allow people with disabilities to appeal even if they do not have taxable income. Here is a quote from his press release: “Procedural issues of this nature should not be an impediment for individuals who wish to establish their right to the Disability Tax Credit and, as a result, also their right to open an RDSP."

This is an important issue for a number of reasons.

  • prior to the RDSP  many individuals with disabilities never applied for the DTC because they didn't have enough taxable income to need the tax credits.  With Disability Tax Credit eligibility you become eligible for the RDSP.  This entitles you to receive matching grants ranging from three to one to one to one and a $1000 annual Disability Savings Bond, depending on your circumstances and the amount you contribute.
  • there are a number of people whose disability is in the 'grey zone' or hard to classify.  These include people with brain injuries, people with mental illness, people whose developmental disability or autism isn't easily categorized or people who have a condition that will eventually lead to a disability.  They may not know how to present their case to the tax department.  Or the tax department may not know enough about the complexities of some disabling conditions.

Now they can appeal the decision And there are resources like the new RDSP Resource Centre that will help you apply for the DTC or appeal if necessary.  If you know of anyone who wonders about their eligibility or has already been turned down contact PLAN directly (604-439-9466; inquiries@plan.ca) or have a look at PLAN's companion rdsp.com website.

If you know of an individual or a family who has a child with a disability ask them whether they have heard of the RDSP or whether they have applied for the Disability Tax Credit.  There are a surprising number of people who don't know about either the Disability Tax Credit or the RDSP.   And here's the kicker – you can claim the DTC going back 10 years once you prove your eligibility.  That can amount to a sizable back tax refund.

As of July 2010,  41,000 RDSP's amounting to one quarter billion dollars are in the bank accounts of individuals with disabilities.  Not a bad start for the world's first savings plan for people with disabilities.

Minister Flaherty deserves our thanks for proposing this much needed amendment.  Take a moment and send him a note or e-mail of thanks.  We tend to do it when we have something to complain about but not when we are satisfied.


  1. Here is a link to  Minister Flaherty's Press Release:
  2. Check out PLAN's RDSP blog for regular updates.  You can use the RDSP calculator to determine the best way to maximize the grants and bond that accompany the RDSP.
  3. Check out the new RDSP Resource Centre headed up by former PLAN Executive Director, Jack Styan.  This new resource will assess your eligibility and assist you apply for the Disability Tax Credit.  This is often accompanied by a tax refund you can turn around and invest in an RDSP!
  4. Go to any London Drugs store in British Columbia and ask for your free copy of my RDSP edition of Safe and Secure.
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  1. Tina Crouse

    Very glad that the Minister is staying on this ‘file’. A lot of the time, they make a change and then forget to tweak. Thank goodness, more and more people will be able to set-up their RDSP.

  2. Al Etmanski

    thanks Tina – can you take a moment to send a note to the Minister. With so many distractions and files on his desk it’s worth acknowledging his continued interest in good lives for people with disabilities and their families.

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