In December 2008 the Canadian government began a new tax shelter for persons with severe impairments called a Registered Disability Savings Plan ( RDSP ). This plan is intended to encourage parents , grandparents and others to save for the long-term financial well-being of a person with a severe disability . The RDSP allows for matching grants from the Government of Canada of 300 %, 200 % or 100 % depending on income and amount contributed . Grants will be paid into an RDSP on contributions made until the person is 49 years of age . Over the beneficiary ’ s lifetime , an RDSP can receive a maximum of $ 70,000 in matching grants and a maximum of $ 20,000 in savings bonds .

To begin a RDSP a person must have a social insurance number , qualify for the Disability Tax Credit ( T2201 approved by the Canada Revenue Agency ), have filed income tax for the previous two years , and continue to file . Income is based on

personal income plus the spouse ’ s income , not the parent ’ s income . Income of $ 25,584 or less will create maximum grants and bonds .

Many other tax breaks exist for specific situations . Seniors may be eligible for the Disability Tax Credit ( CRA T2201 ), medical expense credits , and so on . As well , some life insurance policies have a savings component that features tax-free growth . A personal review of your situation by a qualified financial planner may reveal new opportunities for savings and growth for you .

Gerhard Sawatzky , BEd , MEd , is a Certified Financial Planner ® professional , mutual funds representative , life insurance agent , and accident and sickness insurance agent in British Columbia , Alberta and Saskatchewan . He sells mutual funds and other securities through Portfolio Strategies Corporation and other products and services through Momentum Capital Management .

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