The RDSP: A Long-Term Savings Tool Canadian Families and Individuals Should Know About
Raising a child or supporting a family member with a disability often comes with extra costs that don’t fade with time. Therapy, equipment, transportation, and day-to-day care add up quickly, and many families worry about what long-term financial security will look like. The Registered Disability Savings Plan, better known as the RDSP, is one of the most generous savings programs the federal government offers — yet many eligible Canadians still haven’t opened one. According to the Canada Disability Savings Program 2024 Annual Report, the national take-up rate for DTC-approved individuals aged 0 to 49 is only 34%.
The program itself has grown substantially. As of the end of 2024, 311,000 Canadians have an active RDSP, and the program has a fair market value of $12.8 billion. The federal government has contributed $5.1 billion in grants and $2.1 billion in bonds since the plan launched in 2008. Those are meaningful numbers — and they point to how powerful this tool can be for families who understand how it works.
What an RDSP Actually Is
An RDSP is a registered savings plan designed to help Canadians approved for the Disability Tax Credit (DTC) build long-term financial security. It works a bit like an RESP for education savings, but the purpose is different: the plan grows tax-deferred and is meant to provide income to the beneficiary later in life, often starting around age 60.
The beneficiary must qualify for the DTC, be a resident of Canada with a valid Social Insurance Number, and the plan must be opened by the end of the year in which the beneficiary turns 59. Once that is in place, the plan can be opened by the individual themselves if they are of age and capable, or by a parent, legal guardian, or qualifying family member on their behalf. The lifetime contribution limit is $200,000, and there is no annual contribution cap — so families can add steady monthly deposits or larger one-time gifts as their circumstances allow.
The Government Match — Where the Real Power Is
The most valuable feature of the RDSP is the money the federal government adds on top of family contributions. There are two programs to know about.
Canada Disability Savings Grant (CDSG). For families with income at or below $114,750 in 2024, the first $500 contributed in a year is matched at 300% — a $500 contribution brings in $1,500 in grants. The next $1,000 contributed is matched at 200%. That combination can bring in up to $3,500 in grants in a single year. Higher-income families still receive a dollar-for-dollar match of up to $1,000 per year. The lifetime grant maximum is $70,000.
Canada Disability Savings Bond (CDSB). For families with income of $37,487 or less in 2024, the government deposits up to $1,000 per year into the RDSP with no contribution required. Between $37,487 and $57,375 of income, a partial bond is paid on a phased-out basis. The lifetime bond maximum is $20,000. For lower-income families, this can be the single most important benefit — free money deposited simply because the plan exists.
Put together, a lower-income family contributing $1,500 in a year may qualify for up to $3,500 in grants plus $1,000 in bonds — meaning up to $4,500 in government incentives on top of the family’s own $1,500 contribution. Over twenty years, numbers like that can compound into real security.
Why Families with Young Children Should Pay Close Attention
One of the most striking findings in the 2024 report is how low take-up is among younger Canadians. Only 23% of DTC-eligible children aged 0 to 18 have an RDSP, compared with 43% of adults aged 19 to 34 and 44% of those aged 35 to 49. That gap matters: the earlier a plan is opened, the more years the matching money has to grow tax-deferred, and the more likely the 10-year holdback clock finishes long before withdrawals begin.
Take-up also varies by region. British Columbia leads the country at 41%, followed by Quebec and Ontario at 35%. New Brunswick sits at 23%, and Nunavut at 9%. Families in lower-take-up areas may simply not be hearing about the program — which is one reason it helps to share this information widely.
The 10-Year Rule and Why Time Matters
If fewer than 10 years have passed since the last grant or bond was paid, up to $3 of grant and/or bond for every $1 withdrawn must be repaid, up to the amount of grants and bonds received in the prior 10 years. This is called the Assistance Holdback Amount, and it is one of the most important rules to plan around.
In practical terms, opening an RDSP when a child is young lets the matching money grow for decades before any withdrawal decision is made. Grants and bonds can be received up to the end of the year the beneficiary turns 49, and contributions can continue until the end of the year the beneficiary turns 59. Grants and bonds can also be claimed retroactively for up to 10 prior years of DTC eligibility — a meaningful catch-up opportunity for families just learning about the plan.
How the Money Comes Out
Withdrawals happen in two forms. A Disability Assistance Payment (DAP) is a one-time or occasional payment. A Lifetime Disability Assistance Payment (LDAP) is a recurring payment that must begin by the end of the year the beneficiary turns 60.
In 2024, 13,500 beneficiaries made withdrawals totalling $78 million. About two-thirds of those dollars went to Canadians aged 50 and older — a sign that the program is starting to mature into its long-term purpose. Among beneficiaries turning 60 in 2024, the average RDSP held $40,000, up from $23,000 in 2019. Of that pool, roughly 42% came from private contributions, 31% from government grants and bonds, and 27% from investment earnings — a clear picture of how the match and compounding work together.
Original contributions come out tax-free. Grants, bonds, and investment growth are taxable to the beneficiary when withdrawn — and because many beneficiaries have modest taxable income, the actual tax bill is often very small or zero.
Provincial Benefits
A common worry is whether an RDSP will reduce provincial disability supports like ODSP in Ontario, AISH in Alberta, or PWD in British Columbia. RDSP treatment varies by jurisdiction, but assets and withdrawals generally do not affect provincial disability benefits in many provinces. That broad protection is part of what makes the plan so useful — the savings can often grow substantially without putting other essential benefits at risk.
Small Steps Add Up
The RDSP rewards steady action more than large one-time deposits. A family contributing $125 a month — $1,500 a year — at the lower-income level may qualify for up to the full $3,500 grant and a $1,000 bond, meaning the government could add up to $4,500 on top of the family’s own contribution. Done consistently over 20 years, the combined effect of matching and tax-deferred growth can be substantial.
If a family member qualifies for the Disability Tax Credit, it is worth checking whether an RDSP has been opened, whether any past grant and bond entitlements have been caught up, and whether the contribution schedule reflects what the family can realistically sustain. Small decisions made today can shape a very different financial picture two or three decades from now.
Sources
Canada Disability Savings Program 2024 Annual Report – Employment and Social Development Canada – https://www.canada.ca/en/employment-social-development/programs/disability-savings/reports/2024-annual.html
Registered Disability Savings Plan (RDSP) – Government of Canada – https://www.canada.ca/en/employment-social-development/programs/disability-savings.html
Canada Disability Savings Grant and Canada Disability Savings Bond – Government of Canada – https://www.canada.ca/en/employment-social-development/programs/disability-savings/grant-bond.html
Disability Tax Credit (DTC) – Canada Revenue Agency – https://www.canada.ca/en/revenue-agency/services/tax/individuals/segments/tax-credits-deductions-persons-disabilities/disability-tax-credit.html
This content is provided for general informational purposes only. It is not intended to provide investment, tax, or legal advice, and should not be relied upon as such.