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RDSP and Budget 2019

Budget 2019 is finally out, and it has a whole treasure trove of goodies. It is truly an election year budget with promises of the future (if you reelect the current government).

I will allow much smarter folks to comment on other areas, but for Registered Disability Savings Plan there are two nice mentions.

RDSP Exempt from Seizure in Bankruptcies

Doug Hoyes and I talked about this on his podcast, but now it looks to be officially in grained in the system.

“Unlike RRSPs, amounts held in RDSPs are not exempt from seizure by creditors in bankruptcy. To level the playing field, Budget 2019 also proposes to exempt RDSPs from seizure in bankruptcy, with the exception of contributions made in the 12 months before the filing.” 

Budget 2019 Canada

I assume the bankruptcy laws may be changed one day, but this seems quite clear. The past 12 months of payments being not exempt makes sense as well.

RDSP Pay Back if DTC Lost

This has always been a big problem, and with the CRA cancelling DTCs left and right this is a good thing.

“To address concerns that this treatment does not appropriately recognize the financial impact that periods of severe, but episodic, disability can have on individuals, Budget 2019 proposes to eliminate the requirement to close an RDSP when a beneficiary no longer qualifies for the DTC. Doing so will allow grants and bonds otherwise required to be repaid to the Government to remain in the RDSP. To ensure fairness for DTC-eligible beneficiaries, some restrictions on access to these amounts will apply. The estimated cost of this measure is $109 million over five years, beginning in 2019–20, and $33 million per year ongoing. “

Budget 2019

Previously you had a short period of time where you had to pay back all grants and bonds, now you can leave the money there. I assume if you try to take money out you would have to pay back grants and bonds (and pay tax on any growth). There still is a few fine points to clarify here.

RDSP Not Forgotten

Glad to see the RDSP is not forgotten in the budget. Curious to see what the Loyal Opposition has to say about these areas come election time?


Yes, this is now law with the passing of the budget in 2019.

Feel Free to Comment

  1. Just want to make sure I understand the changes to the RDSP. I am 49 and will lose my DTC eligibility when I turn 50 in 2022. If I do not make any withdrawals until I am 60, then I will not lose the grants and bonds that were deposited in the account in the prior years? Prior to this change I believe I would have had to pay this back. Thank you for your article.

    1. Yes that is my understanding as well. I outlined things more in RDSP after DTC Lost, and that is my understanding.


      If the loss happens before the end of the year the beneficiary turns 50, the AHA period is the ten previous years from Jan 1. It remains this period until Jan 1, of the year the beneficiary turns 51, when it becomes 9 years; Jan 1 of the year the beneficiary turns 52, 8 years; and so on. The end of the year the beneficiary turns 59 (Jan. 1 of the year the beneficiary turns 60) it becomes zero.

  2. I like these important changes but not enough to justify voting for this gov’t come election time (don’t want to turn this into a political discussion, but just sayin…)

    1. I am hoping that the act of “passing the budget” means these come into effect at that point. I am not always clear on parliamentary procedures and such but my fingers are crossed.

    2. These changes are good ones, but there are more important issues with the RDSP that need to be resolved. I don’t know if the Conservatives would even support the change letting people hold onto their RDSP accounts and the government contributions if they lose the DTC, though.

      1. This goes back to my question that if this is stated in the budget, and the budget is passed, is this not law? My parliamentary procedures understanding is quite limited.

        1. I am not sure either so I tried to look it up. Could not find much info except that the budget runs from April 1 to Mar 31, so presumably this would take effect next month.

          1. OK, we can go with that, if anyone else has any input on this, jump in! I have asked other folks about this, but haven’t had a reliable answer yet.

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