RDSP Providers : TD Investments Continues to Annoy

It is that time of year again, for me to go through the odd set of steps to move money into my son’s TD Direct Investing RDSP account . First let me point out that the TD Direct Investment RDSP is the best one (i.e. the best of the RDSP Providers ) that I can find on the market (do not be confused TD has a  TD Mutual Fund version, you should ignore), in terms of its ability to allow me to invest in what I want, and  receive the correct Government grants.

Now that I have said that TD is the best of existing RDSP Providers, allow me to now clarify that to actually put money into this account is the most convoluted, horse manure interface that could be concocted by a set of Lawyers and Accountants (and possibly throwing in a Modern Dance Choreographer). I have written previously about the steps I must take to put money into this account, however, this last time I got a glimpse at the end of the deposit part of the process.

Previously I pointed out that the steps were:

RDSP Money Path for RDSP Providers

RDSP Money Path (using Easyline over phone)

So note that I cannot do this on-line in 1 step. I can put money into my trading account using a normal automatic transfer mechanism (step 2), so some of it is automated. I dutifully every pay cheque transfer an amount into my trading account to build up the money for the RDSP account (yes, I still think they are one of the best RDSP Providers, but this is driving me crazy).

What I found out from this last session on the phone was that step 3 is not actually a straight forward transfer, it is actually an E-mail sent from the lucky phone representative who I talk to on the phone, to some magical over-lord who does the actual transfer. Read that sentence again, the RDSP program at TD is so convoluted that their own representatives are not allowed to do a simple transfer, they must ask someone else to do it? #Seriously?!?

I am staring to wonder just how exciting will it be to withdraw money from this system? Again let me please reiterate this is the best RDSP Provider out there (currently).



RDSP the Savings Plan Nobody Knows About

I seem to have collected a few dedicated readers who continue to struggle with the RDSP (Registered Disability Savings Plan) vehicle (as do we all), and from one of them, I got the following e-mail:

Thanks! There are some non-independent advisors out there (associated with a bank or other financial institution) who have developed a specialty in RDSPs out of personal interest, but I have yet to meet an independent one. So far independent advisors know less about RDSPs than we do.

This e-mail came in response to an answer I had written about the ability to slide funds from an RESP to an RDSP (should the child involved not go to a registered training program that the RESP could be used for). If you are looking for more information on this read the CRA page, RDSP Bulletin No. 4it explains the rules around this.

I try very hard to help folks with RDSPs as best I can, but sometimes I am out of my league. With most of my advice, I tell folks they should check with the CRA or another trained professional in most areas, but it is really disheartening to hear that most independent advisors don’t know about the program either.

I continue to harass the big banks about this, but the RDSP continues to not be on their radar scopes. TD Waterhouse offers an actual account, that is as good as it gets for folks who want to have a finer control on the investments (i.e. not just buy Bank Mutual Funds), but it continues to have shortcomings too (i.e. unable to set up an automatic savings schedule transferring money from a checking account directly to the RDSP account).

Friend of this site Ellen Roseman continues to try to help out as well, and for that I am thankful.


Time to Re-apply for the Disability Tax Credit Certificate

Let me preface this post with a thank you to Milburn Drysdale at ASDFunding.com. His documentation is what we based most of this work on, and if anyone asks you, they should check out his site before you read anything over here about Registered Disability Savings Plans for Disability Tax Credits. I’d also like to thank my wife who has fact checked my statements.  Is it time to re-apply for the disability tax credit ? 

As I have mentioned my son’s disability was “verified” by the CRA in 2009. At the time it was a “conditional” verification, and the CRA said that he would need to re-apply for the disability tax credit in 10 years (i.e. back dated to 2005).

A few months ago, we received a child disability benefit notice from the CRA saying, the DTCC (Disability Tax Credit Certificate) would “expire” in December 2015 . I hadn’t thought about the fact that my son’s disability was viewed as a disability from birth, so the CRA credited me back taxes from when he was born. This meant that his disability tax credit period started from birth. Given my son has turned ten this year, it is logical that the CRA is now asking for a reassessment.

The first steps towards re-applying for the DTCC for my son was to go see our Pediatrician and have him fill out the T2201 Disability Tax Credit Certificate. Our Pediatrician could have turned us down and said, “No I won’t fill in the forms for you because in my opinion your son is no longer disabled”, however, that was not the case.

We then added to this documentation, a report from my son’s Occupational Therapist and a Speech Pathologist (Effect of Impairment Document), to help reaffirm my son’s disability diagnosis for the reapplication. It is better to have plenty of supporting documents for the application.

Is the reapplication a “slam dunk”? No, not by any means, we need to make sure that we have all supporting documentation done, and it still relies on the CRA to decide whether that documentation is sufficient or not. What if the CRA denies the reapplication for my son? A few things happen:

Final Notes

The advice we got from our Pediatrician (who I think I view as a subject matter expert, as he has done many of these) is you can never have too much documentation, and you must make sure the information is easy to follow for the CRA folks that will be making the decision. The goal is to have a well written clear application.

Some other notes from my wife, that I am not sure I completely comprehend, but here they are:

  • There is a list of qualified practitioners on the forms (T2201). This information is on the forms, supporting documentation can be from other professionals, but you need a specific professional to sign the forms.
  • Make sure you get your pediatrician or Doctor to fill in the right sections of the forms. There is nothing worse than doing all this work and have the CRA return the forms with a note saying, “You forgot to fill in the following sections:….”

The signed forms were sent via registered mail and we must now wait to see whether the Disability Tax Credit will continue for us.

re-apply for the disability tax credit

An Excellent Graphic from our friends at Moneysense about the RDSP benefits



RDSP Questions and Answers

Yet another interview, helped me create this set of RDSP questions and answers. As with all my advice in this area, I start with check the CRA RDSP Web Page Link, and read about this topic yourself, but hopefully some of these answers I put together will help. As for what happened to the article that was to come from this “interview”, I haven’t seen anything yet (I seem to be fun to interview, but the information I give out, isn’t very print worthy).

1. Approval for the Disability Tax Credit is required before an RDSP can be set up for an individual. It may be for a specified term or indefinite. How hard is it to obtain? Do you think disabled people or their caregivers need the assistance of a consultant (for fee or on commission) to get the approval?

For us, it wasn’t too hard, but luckily we had the help of Ottawa Children’s Treatment Centre through CHEO (Children’s Hospital of Eastern Ontario) when my son was diagnosed with Autism. They assigned a social worker to help us, and the Psychologist who did the diagnosis filled in the appropriate forms (T-2201) to get the DTC, and then helped us get the DTC review “backdated” to when my son was born, as Autism is viewed as a disorder of brain development  (or as a from birth disability).

I have been fairly vocal in my dislike of “for fee or commission” firms that “help” folks get their DTC, as I think it is something that most folks should be able to do (with the help of their diagnosing physician). Many of these firms take a percentage of the DTC pay out, and some even attach trailers, so that they get a commission every year, which I think is excessive (if not loathsome).

2. What other free or low cost services are available in the community to help people making an application?

As I have said, we got help from OCTC, I would assume that if you lived near a large metropolitan area, the children’s hospital should be able to help you out. Ultimately this is a job for the diagnosing physician.  I have been told by a few of my readers that there are help groups in many communities that help folks (for free) get things done, if their physicians are unfamiliar with what needs to get done. Look on-line is my advice to look for this information at sites such as , Autism Ontario, or Children at Risk.

3.  Can you give me some examples of situations where eligibility for the DTC might be time limited and require re-application?

Depending on the diagnosis or how it is written up it can be either in perpetuity or for a fixed period of time. In our case we will have to reapply in about 5 years, because with some diagnosis (like high functioning Autism), the CRA wants to see if a “disabled” label is still justified.

My guess would be that with other permanent disabilities, it would be unlimited, eligibility

4. Who can set up an RDSP?
OK, let me preface this by saying ALL of this information is on line on the CRA’s web page.

If the child is under the age of majority, the parents, guardian or any public department or agency, that is legally authorized to act for the child can open an RDSP.

If the beneficiary is old enough and competent they can open one themselves, or their legal representative (guardian, parent, etc.,) can do so as well. A Qualified Family Member (QFM) can also do so, under the right circumstances.

5. What are minimum/maximum ages for participation in an RDSP?

Minimum age is birth, the maximum age and benefits stop being paid into the plan after the age of 59, so I guess that is the maximum age, but it may not make a lot of sense around that age, as the grants stop being added after the beneficiary turns 49.

6. When can the funds be withdrawn?
At any time, however, the program is designed for long term savings, so the government will ask for all bonds & grants paid over the past 10 years (up to that amount) as a penalty, if money is taken out early. Now if there is a shorter life expectancy (less than 5 years) there are rules to allow for limited withdrawals with less penalties.

7. Is the money in the fund taxable when it comes out?
Yes, parts of the money are taxable, depending on how large the grants were that were put into the plan by the government, and the growth of the money in the fund.

8.When selecting a financial institution to set up an RDSP, what questions should a consumer ask and what answers should they be looking for?
In our case, the obvious questions were: am I going to be able to  buy whatever I want? or will I be restricted to only buying specific Mutual Funds or GICs offered by the institution? For our situation, we went with TD Waterhouse because we had a great deal more flexibility in how the money could be invested in (in our cose low management fee index funds and GICs). Also TD Waterhouse was one of the first institutions to offer the savings program (that had this flexibility), and I had accounts already with Waterhouse.

9. How can funds in an RDSP be invested?

That depends on what the institution lets you purchase. If it is a GIC based vehicle that is all you can buy, if it is a Mutual Fund based solution, only the funds available from the provider, but ideally it should be like an RRSP, RESP or TFSA, saving in whatever you want to save in.

10. In your experience, do fees vary significantly among financial institutions?
I am not sure what other institutions charge, I know about the TD set up, but any fees over and above Management Fees for funds strike me as punitive and a bad thing, given who the money is intended to help.

11. What happens if you don’t have enough money to contribute every year on behalf of your child or dependant? Carry-forward of grant and bond eligibility?
The maximum amount eligible to deposit into a single RDSP (you can only have one for each beneficiary), is $200,000, and there is no maximum how much you can put in any year, so in theory, you could put the whole thing in, at the beginning, HOWEVER, the matching grants do have limitations.

12. Can a parent, relative or friend transfer money from an RRSP or RRIF to an RDSP? What are the tax implications of doing so?
Yes, there is an ability to roll moneys from an RRSP into an RDSP, but it does count against the total $200K limit, and will only get some grants money, for the year.

13. In what circumstances might it make sense to borrow money to make an annual contribution?
That’s a very good question, and I don’t really have an answer on that one. It depends on your ability to withstand interest payments and such? Given the grant and bond money is dependant on the parents’ income (until the age of majority is reached), it becomes a catch-22, should the parents go into debt on this? I think folks need to do the arithmetic for themselves and see whether it is worth taking on that risk.

14. What happens to the money in the account, the bond and grant money if an individual no longer meets the criteria for the DTC? i.e gets a heart transplant and resumes the normal activities of daily life.
Not sure about the heart transplant, I think you are still disabled, but that doesn’t matter. If the DTC is lost, you can apply to have the RDSP extended for a period, but eventually. All grant & bond moneys from the past 10 years must be paid back, but the growth in the fund can be rolled into an RRSP (I believe, not sure on that one though).



RDSP with TD Waterhouse a Step in the Right Direction

After being tipped to a change on Friday by a Twitter follower, I went to check out, and yes, TD Waterhouse has changed their RDSP (Registered Disability Savings Plan) account, so that an investor (or their proxy) can trade in the account with funds in the account on-line. Previously, you had to call the TD Easyline folks to change or trade securities, index funds or whatever in these accounts on the phone (only) to this is some very heartening news.

RDSP Money Path

Previously the RDSP Money Path (using Easyline over the phone)

While I am very glad and wish to thank TD Waterhouse for taking this (small) step, we still have a few more steps to shorten.

The process before the change on Friday was:

  1. Transfer money from a TD Bank account to a TD Waterhouse trading account
  2. Transfer the money from the TD Waterhouse Trading account to the RDSP account
  3. Purchase securities with the transferred money

All 3 of those steps were only “do-able” using the phone interface (which right now is under a heavy load due to the fun and games in the stock market 😈 but I digress) only.

The new process looks to be (and I am willing to eat my keyboard on this, if someone can assure me this can be done in one step)

  1. Transfer money from a TD Bank account to a TD Waterhouse trading account on the phone
  2. Transfer the money from the TD Waterhouse Trading account to the RDSP account on the phone
  3. Purchase securities with the transferred money when you wish using the on-line interface using Webbroker

(not sure, step 1 may be redundant, you may be able to transfer from a savings account to an RDSP account over the phone)

While this is a better solution, however, I would much rather see a 2 step solution:


Good Start TD Waterhouse

  1. Transfer money from a TD Bank account to a TD Waterhouse RDSP Account Using Easyline (i.e. on line)
  2. Purchase securities with the transferred money when you wish using the on-line interface using Webbroker

However, an even better set up would be an automatic “per pay cheque” purchase in EasyWeb, that would buy TDB8150 the TD Waterhouse “high interest” savings account (or something similar, maybe a T-Bill Index fund, or just transfer cash), so I can then accumulate funds in the RDSP Savings vehicle, which I can then use to buy ETFs, Index Funds, or whatever, on a quarterly basis.

To my friends at TD Waterhouse, Good start! Now please keep working hard to get to a more stream-lined solution.


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