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Registered Disability Savings Plan

Empowering your financial future
Help reach your long-term financial goals with a Registered Disability Savings Plan (RDSP)

Two in three Canadians with disabilities may be missing out on the opportunity to reach their long-term savings goals!
Nearly two in three Canadians eligible for a Registered Disability Savings Plan (RDSP) have not yet taken advantage of this long-term
savings plan, missing out on the valuable government financial benefits an RDSP offers.

Empire Life's Registered Disability Savings Plan—the first offered by a Canadian life insurance company—offers a diversified range
of segregated fund investment options with the protection of insurance guarantees.

If you or your loved one is a person with a disability, an RDSP can help provide financial security and peace of mind.

What is a Registered Disability Savings Plan?

A Registered Disability Savings Plan (RDSP) is a savings plan to help Canadians with disabilities, who are approved for the Disability Tax
Credit, save and invest for their future. You can choose to invest your RDSP savings in a variety of financial products and any investment
growth within your RDSP is tax-sheltered.

A lifetime maximum of $200,000 can be contributed to an RDSP, but there are no annual limits. An RDSP may also be eligible for grants
and bonds from the Government of Canada to help with longterm savings.

Are you eligible for a Registered Disability Savings Plan?

The first step in determining eligibility for an RDSP is that the plan beneficiary must be approved for the Disability Tax Credit (DTC).
Application for the DTC can be made using Form T2201.

The Disability Tax Credit often has an expiry date, but it must be approved for the plan beneficiary to be eligible for an RDSP.

Registered Disability Savings Plan eligibility criteria

• Approved for Disability Tax Credit
• Be a resident of Canada
• Age 59 or less on December 31 of the year applied in
• Have a valid Social Insurance Number (SIN)

Take advantage of government grants and bonds

One of the important benefits of an RDSP is the ability to have your savings increased by the deposit of grants and bonds from the Government of Canada.
They’re available until the end of the year the plan beneficiary turns 49.

Lifetime financial benefits of a Registered Disability Savings Plan*

• $70,000 Canada Disability Savings Grant
• $20,000 Canada Disability Savings Bond
• $90,000 Total of grants and bonds available
• $200,000 Lifetime contribution amount
• Plus tax-sheltered investment growth within your RDSP

*Maximum amounts available, if eligible

An application for the Canada Disability Savings Grant (grant) and Canada Disability Savings Bond (bond) can be made when your RDSP
is opened. If you’re eligible, the bond will be automatically applied to your RDSP after you apply. And, if you were approved for the Disability
Tax Credit (DTC) for any or all of the past 10 years, but didn’t have an RDSP, you may be able to catch up missed grants and bonds using
carry-forward amounts.

Canada Disability Savings Grant

The Canada Disability Savings Grant is a matching Government of Canada grant deposited into your Registered Disability Savings
Plan. It’s based on contributions and the plan beneficiary’s family net income. You must contribute $1,500 in a year to get the maximum
annual amount of grant you may be eligible for, but a partial amount is also available. The grant uses a matching rate based on deposits and
income thresholds to determine grant payments.

• Annual grant limit of $3,500
• Lifetime grant limit of $70,000
• Annual limit with carry forward of $10,500
• Contributions are required to receive grants

Canada Disability Savings Bond

The Canada Disability Savings Bond is money the Government of Canada contributes to RDSPs of low- and modest-income
Canadians. The bond amount varies by income. Unlike grants, contributions are not necessary to receive the bond.

• Annual bond limit of $1,000
• Lifetime limit of $20,000
• Annual limit with carry forward of $11,000
• No contributions required
• Income must be within levels for low- and modest-income set by the government

Tip!
Start filing the plan beneficiary’s income tax returns at age 17 even if there is no income to report. The government uses the tax
return from two years prior to the current tax year to determine the plan beneficiary’s income.

Case study: Working together to build savings

Once an RDSP is opened anyone may contribute to it including the holder(s), the plan beneficiary, their family members, and other contributors (with the holder’s written consent). They all work together to build your savings.
Let’s look at Zoe, who started investing $1,500 per year into her RDSP when she was 20 years old. Now age 60 she must start withdrawing from her RDSP. Over 40 years, she received the maximum amount of grants and bonds available. As Zoe made contributions and received grants and bonds, she invested the money and achieved an average annual rate of return of 5%. Her RDSP now holds $552,723 for her to begin making withdrawals from.

Work with an advisor to apply for an RDSP entirely online with Empire Life!

An application for an Empire Life Disability Savings Plan can be submitted entirely online by working with your advisor. Advantages of the online process are that the application and government forms are completed automatically, with e-signatures on forms, no paperwork to keep track of and all records are held in a secure environment. (A paper application is also available.)

Turning your RDSP savings into income

There are two types of payments that can be made from an RDSP:

Lifetime Disability Assistance Payment (LDAP)

This is a recurring or annual payment that must begin by December 31 of the year the plan beneficiary turns 60. The frequency of the payment is set at the time of the request.
Once started, this payment continues until the RDSP is terminated or the plan beneficiary dies. Payments may be subject to an annual maximum withdrawal amount based on the plan beneficiary’s age and the fair market value of the plan using the Lifetime Disability Assistance Plan (LDAP) formula.

Disability Assistance Payment (DAP)

There may be instances where a single lump sum withdrawal is needed, which can be requested from an RDSP. This is called a Disability Assistance Payment (DAP).
This type of payment can happen more than once, but a request must be made for each one. Not all RSDP providers offer this type of payment. Empire Life does offer this option.

Only the holder can request withdrawals from an RDSP, and they must be used only for the plan beneficiary. Withdrawals may have a limit. Early withdrawals, before age 60, may incur a withdrawal penalty and repayment of grants and bonds.

Warning about withdrawals!
Withdrawals may trigger the repayment of some or all grant and bond amounts that have been paid into an RDSP within the previous 10 years. For every $1 withdrawn, $3 worth of grants or bonds must be repaid to the government.

Specified Disability Savings Plan (SDSP)

A plan beneficiary with a shortened life expectancy has greater flexibility to access the savings from their RDSP. Once medically certified, a request can be made to change a Registered Disability Savings Plan to a Specified Disability Savings Plan (SDSP). Speak with your advisor to learn more.

Don’t miss out on the benefits of a Registered Disability Savings Plan with Empire Life.

Empire Life Guaranteed Investment Fund benefits

Empire Life Guaranteed Investment Funds (GIFs) are segregated fund contracts that can be held in an Empire Life Registered Disability Savings Plan.

Insurance protection

Segregated fund contracts offer valuable insurance benefits that some other investments cannot, such as maturity and death benefit guarantees.

Death Benefit Guarantee Resets

Annual, automatic death benefit guarantee resets until age 80 lock-in market growth and increase guaranteed values available at death.

Wide range of investment choices
Empire Life GIF offers a wide range of investment options from fixed income to 100% equity. You and your advisor can choose the funds that best suit your investor profile.

Take advantage of the savings and potential investment growth of an RDSP

A Registered Disability Savings Plan (RDSP) can help provide financial security for Canadians with disabilities, including the benefits of receiving government grants and bonds to assist with reaching long‑term financial goals.
Empire Life’s Registered Disability Savings Plan—the first offered by a Canadian life insurance company—offers a diversified range of segregated fund investment options with the protection of insurance guarantees.

Source:https://www.empire.ca/docs/pdf/INV-4048-RDSP-Client-Brochure-EN-web.pdf

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