RDSP myths, explained

But even among Canadians familiar with the RDSP, there are misconceptions. For example, the survey found that 36% of people with potentially qualifying medical conditions and caregivers who hadn’t opened an account thought they didn’t have enough money to do so. One-third were also unaware of the free government RDSP grants and bonds.

In this article, we’ll clear up the confusion around these and other RDSP details, including five common myths about who can be an RDSP beneficiary, where to open an RDSP and more.

RDSP myth #1: RDSPs are only for kids

Just like with a TFSA or a RRSP, it’s a great idea to contribute to an RDSP as early as possible so the money has time to grow. A parent or legal representative can open an RDSP for a minor. An adult can open an RDSP before the year they turn 60. A parent, spouse, common-law partner, adult sibling or legal guardian can open an account for adults who can’t do it themselves. If you would like to make a contribution to a friend or family member’s RDSP, you will need written consent from the plan holder. The lifetime contribution limit for an RDSP is $200,000.

As the director of registered plans at Concentra Trust, Selena Gusikoski has professional insight into government programs. She also has personal experience. When her brother, Cody, was 38 years old, she helped him set up his own RDSP—a move that strengthened his financial situation considerably.

“Although you can open an RDSP as an adult, ideally you want to open it as early as possible so you can get as much grant and bond money as possible,” says Gusikoski. The federal government allows applicants to claim up to 10 years of payments for previous years (if they meet the DTC eligibility criteria for those years), so even later applications are beneficial.

RDSP myth #2: You have to make RDSP contributions to qualify for government funds

Yes and no—it depends. RDSP beneficiaries may be eligible to receive grants and bonds. Here’s how to qualify for each:

• Canada Disability Savings Grants are matched contributions made by the Government of Canada. The amounts depend on the beneficiary’s adjusted family net income and the amount contributed to the account. For the 2025 calendar year, the maximum RDSP grant amount is $3,500 a year for those whose family income is $114,750 or less, and $1,000 for those with a family income over $114,750. The lifetime maximum for matching grants is up to $70,000.
• Canada Disability Savings Bonds are available to low-income Canadians with disabilities, who can receive up to $1,000 per year towards their RDSP whether they contribute or not. The amount is based on the beneficiary’s adjusted family net income. In 2025, families with an income of $37,487 or less will receive the full $1,000. Those earning $57,357 or more aren’t eligible, and families with incomes in between will receive a portion of the bond. There is a lifetime maximum of $20,000 for bonds.

Also important to know: you can “carry forward” up to 10 years of unused grant and bond entitlements. (See RDSP matching rates for past years.)

When Gusikoski’s brother applied for his RDSP, that’s what he did. “As long as the beneficiary met the DTC eligibility requirements for those years, they can claim those government contributions,” says Gusikoski. “You can do this before the year in which you turn 49. It could be a substantial nest egg for your future.”

RDSP myth #3: RDSP withdrawals could mean disability benefit clawbacks

For most Canadians, making an RDSP withdrawal will not affect your disability benefits. Residents of Quebec, New Brunswick and Prince Edward Island, however, should check with their provincial governments to see whether—and how—their benefits might be affected.

Beneficiaries can request single or recurring RDSP withdrawals from their financial institution anytime.

• A single payment is called a disability assistance payment (DAP). A request is required for each DAP.
• A recurring payment is called a lifetime disability assistance payment (LDAP). Beneficiaries must start these regular RDSP withdrawals by the end of the year they turn 60.  

Each payment is a mixture of RDSP contributions, grants, bonds and investment interest. (For grants and bonds, only the amounts deposited more than 10 years ago are included.)

Note that you may have to return a portion of government grants and bonds in the RDSP, if they have been in the account for less than 10 years. There are some exceptions; learn more about RDSP repayment rules.

RDSP myth #4: Working Canadians can’t open an RDSP

“Anybody who qualifies for the disability tax credit can open up an RDSP,” Gusikoski says, adding that people with many different kinds of disabilities might qualify for the credit. “Depending on the stage or the severity of people’s disabilities, for example, they might be able to work. There’s definitely no restriction on a working individual opening up an RDSP.”

People who are eligible for the disability tax credit can apply to open an RDSP as long as they’re under age 60, a resident of Canada, and have a valid social insurance number (SIN).

RDSP myth #5: You can only open an RDSP at a bank

Banks are not the only financial institutions that offer RDSPs, and indeed, opening the account at a credit union has its advantages. A credit union is a non-profit, member-owned financial services cooperative that provides a wide range of financial services, including registered accounts.

“I’m very passionate about the credit union system,” Gusikoski says. “Credit unions are very, very community-focused and they know their members very well, so difficult conversations come a little bit easier. It’s not so intimidating.”

Learn more about free RDSP grants and bonds

Canadians hear a lot about how registered accounts like RRSPs and TFSAs can help them meet their savings goals, but awareness of the RDSP is still very low. As a result, many Canadians who could benefit are missing out. Between the tax-free growth of personal contributions and the free government grants and bonds, an RDSP can make a significant difference in a person’s life.

“I’d love to help every Canadian out there get more knowledge and understanding about RDSPs,” Gusikoski says. “I can’t talk to everyone, but that’s where the credit unions come in.”

If you’re interested in opening an RDSP for yourself or someone else, book an appointment at your local credit union today or head to Concentra’s website to learn more.

More about RDSPs:

• What is an RDSP?
• Estate planning and trusts for a beneficiary with a disability
• Disability, income splitting and tax reduction
• How to roll over money from an RRSP to an RDSP?

About Keph Senett

Keph Senett writes about personal finance through a community-building lens. She seeks to make clear and actionable knowledge available to everyone.