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The Federal Government has
introduced a new program called the Registered Disability Savings
Plan (RDSP) which is designed to help families and friends
ensure a secure financial future for severely disabled loved ones
suffering from either physical or mental disabilities.
The program took effect on
December 1st 2008 and works much like the Registered Education Savings
Plan. There is no annual limit on amounts that can be contributed
to an RDSP of a particular beneficiary. However, the overall lifetime
limit for a particular beneficiary is $200,000. Note that
beneficiaries of an RDSP must be eligible for the Disability Tax Credit.
For more information
about RDSP's and how to set up an RDSP go to the Canada Revenue Agency
website:
http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/rdsp-reei/menu-eng.html.
To establish an RDSP, a
person who is qualified to be a holder of the plan must contact a
participating financial institution that offers the RDSP. The Bank
of Montreal is currently offering the Plan
http://www4.bmo.com/investments/0,4629,35649_62330610,00.html and
other banks and financial institutions will soon be doing so as well.
The
deadline for setting up an RDSP is March 2, 2009.
Ontario Social Assistance
Changes to Ontario's
social assistance rules have also been made to make sure that both RDSP
assets and withdrawals are fully exempt. This means that our loved
ones' social assistance payments will not be affected by RDSP
contributions.
Read more about how
Ontario Social Assistance supports the new Registered Disability Savings
Plan
at the following site:
http://www.mcss.gov.on.ca/mcss/english/news/releases/081130.htm. At
the end of this press release, there are links for more information on
the RDSP, and to Canada Revenue Agency for the Disability Tax Credit
application form.
As well, in addition to
this new program, the government has increased the amount that families
can give their relative as a gift or payment from a trust from $5,000 to
$6,000 a year. Wonderful news!
All in all, the new RDSP, dubbed the 'peace of mind'
plan, offers hope to families because we can take steps now to secure
our loved ones' financial future; definitely some peace of mind for when
we're gone and no longer able to help them ourselves.
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