24
lacible | Octobre 2017
FEATURE ARTICLE
David Truong
CIWM, F.Pl., M. Fisc.
Advisor, Expertise Center
National Bank Private Banking 1859
Supplement (GIS). Most provinces have harmonized
their benefits. In 2014, Québec modified its
legislation to avoid having some people lose social
assistance, but there is still a risk for those aged 60
to 65, when RDSP withdrawals become mandatory.
RDSP Payments
Under the Income Tax Act (ITA), there are two
types of RDSP withdrawals: Disability Assistance
Payments (DAP) and Lifetime Disability Assistance
Payments (LDAP). The DAP is a payment made
on request and the LDAP is a perpetual periodic
payment. The payments may be limited if the
private contributions are lower than the total
amount of the government grants and bonds.
The table below shows the minimum and maximum
amounts of DAPs and LDAPs, based on the age of
the beneficiary and the type of RDSP.
1
SIDE EFFECTS OF AN
RDSP
In 2007, the Ministry of Finance unveiled the
Registered Disability Savings Plan (RDSP) to
protect the long-term financial security of disabled
people. In addition to the Canada Disability Savings
Grant (CDSG) and the Canada Disability Savings
Bond (CDSB), which can be significant, the income
generated inside an RDSP accrues tax-sheltered
and is only taxed at the time of withdrawal. To
coordinate the RDSP with the other tax incentives,
the government declared that withdrawals would
not affect federal social benefits, such as Old
Age Security (OAS) and the Guaranteed Income
Primarily government-assisted plan (PGAP) Plan in which private contributions
equal or exceed government
contributions (non-PGAP)
DAP LDAP DAP + LDAP DAP LDAP DAP +
LDAP
Before the end
of the year
in which the
beneficiary
turns 59
Maximum
amount
The greater
of the formula
result and 10%
of the RDSP
FMV**
Formula
result*
The greater of the
formula result and
10% of the RDSP
FMV
No
maximum
Formula
result
No
maximum
Minimum
amount
No minimum $1.00 $1.00 No
minimum
$1.00 $1.00
Beginning the
year that the
beneficiary
turns 60
Maximum
amount
Always
combined with
LDAP
Formula
result
The greater of the
formula result and
10% of the RDSP
FMV
No
maximum
Formula
result
No
maximum
Minimum
amount
Formula result Always
combined
with LDAP
Formula result
1 Source: Employment and Social Development Canada, InfoCapsule 21.
*Formula = FMV
[3 + max (80, age on January 1) – age on January 1]
**As defined under the term "specified maximum amount" in subsection 146.4(1) ITA.
