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Disability Solutions


People with challenges ... they are like anybody else. You have to plan for your future. When the caregiver is gone, who is going to care?

Canadians with a disability should open a registered disability savings plan (RDSP).

The RDSP is a tax-deferred registered savings plan open to Canadians eligible for the disability tax credit. One of the attractive aspects of the RDSPs is the ability to supplement the plan with matching Canada Disability Savings Grants (CDSGs) and Canada Disability Savings Bonds (CDSBs) for beneficiaries age 49 and under.

CDSGs and CDSBs are based on family income. If the beneficiary is under 19, it is his or her parents’ family income. At age 19, it’s the beneficiary’s own family income. CDSGs are equal to 300% of the first $500 of annual contributions and 200% on the next $1,000 for a maximum annual entitlement of $3,500, subject to a lifetime maximum of $70,000. If family income is over $89,401, the CDSG is 100% on the first $1,000 of annual contributions.

CDSBs of up to $1,000 annually up to a lifetime maximum of $20,000 can also be paid into RDSPs for lower-income families. No contributions are required. Up to $200,000 can be invested in the plan. While contributions are not tax-deductible, all earnings and growth accrue tax-deferred.

Retroactive CDSGs and CDSBs can now be collected based on new contributions, although the government has informed RDSP issuers that payments for retroactive grants and bonds will be forthcoming within a specified timeframe.
As a result of this retroactive change, CDSGs and CDSBs will ultimately be paid on unused entitlements for the preceding 10 years (but no earlier than 2008) up to an annual maximum of $10,500 and $10,000, respectively when an RDSP is opened.

Final Thought:

Opening an RDSP is something that everyone who qualifies HAS TO DO. It is that important and many people are missing the boat.

Statistics show:

  • 12,000: Average number of RDSPs created each year since program became active
  • 118,000: Total number of RDSPs created since 2008
  • 3,800,000: Approximate number of Canadians aged 15 and older who have a disability, according to Statistics Canada
  • 625,000: estimated number of disabled individuals in Canada eligible for RDSP
  • 19 per cent: uptake rate for RDSP

Disability Insurance:

Most people will spend a lot of money protecting their home and car, but when it comes to protecting their biggest asset, THEMSELVES, this is often overlooked.

In Canada one in every three people will be disabled due to an injury for 90 days or more before they turn 65. This will have a significant impact on their lifestyle now and in the future.

Having the ability to earn an income is important to maintain your quality of life. It provides stability for your family, planning for retirement and any other goals you may have.

Disability insurance provides a source of income should you become ill or injured and can’t work. A disability can be a result of an injury, a serious illness or even a mental health issue. It can be for a short or long period.

There are various types of disability insurance, ranging from group insurance, individual insurance and government plans such as worker’s compensation.

Disability insurance is an essential part of any financial plan. If you are not able to work, how would you be able to provide for yourself and your family?

You could dip into your savings and how long would that last?

You could dip into your retirement investment account. The problem with that is you would be paying taxes on the withdrawals and would most certainly affect your retirement plans.

You could borrow from your family and friends assuming they are in a position. What are the possibilities a bank would lend you money if you are not working?

If you have group insurance are you eligible and how much are you covered for? Does it have the comprehensive coverage you need? If you change employers or become self-employed will you be covered?

We all know you can’t buy house insurance when your house is on fire, so look at making sure you are protected!