Maximizing Canada Disability Savings Grant Contributions
People with disabilities are offered financial support through the RDSP (Registered Disability Savings Plan). This is a long-term, government held savings and investment account. Setting up an RDSP makes an individual eligible to receive matched contributions through the Canada Disability Savings Grant (CDSG). This means that the money put into RDSP by the beneficiary and his or her family will be matched by Canada federal government.
General Information about CDSG
– Financial support from grant and bond entitlements are contributed to an RDSP. This is one way Canada federal government matches contributions.
– It is possible to receive a matching rate up to 300 percent. This is based on the beneficiary’s net income.
– The yearly cap for government contributions through the CDSG is set at $3,500. The overall (or lifetime) cap is set at $70,000.
– CDSG contributions can be made until December 31st of the year the beneficiary turns 49 years old.
Make the Most of Disability Support
Being a government issued grant, there are two important points to understand when trying to make the most of disability support.
First, it is important to know that the family’s net income will be considered before government contributions can be calculated. The percentage that the government will match depends on earning more or less than $85,414 annually (based on 2012 rules).
Second, when considering how to make the most of disability support, and collect the most “free money,” know that it is not wise to contribute large amounts of money all at once. The government has limitations on how much it can match in one year’s time.
CDSG abides by the “Carry-forward Measure”
It is possible to make up for 10 years of unused contribution opportunities (going back to 2008 when RDSP was established). Canada federal government wants to ensure people with disabilities have opportunities to receive financial support for the future. This is why it matches contributions made at later dates.
Better yet, anyone can make a contribution on behalf of the RDSP and CDSG beneficiary. This is one way family, friends, support networks, and non-profit organizations can provide disability support for loved ones.
Qualify for the Disability Tax Credit First
Eligibility for the RDSP and CDSG is available to those who qualify for the Disability Tax Credit (DTC). People with disabilities who receive the DTC have opportunities to receive financial support in a number of ways. In addition to annual tax breaks, there is the possibility of receiving free money from government through the RDSP grants and bonds.
The Disability Tax Credit can open doors for a person living with a disability. Being awarded tax breaks involves going through an application process with Canada federal government. To ensure a successful application and qualification it is best to work with tax benefit professionals.
The National Benefit Authority (NBA) is the agency people with disabilities trust most to handle Disability Tax Credit filings and back-filings. Up to $40,000 is available to an individual living with a disability. With large claims available, it is important to consult benefit professionals to ensure the rightful amount of money is received from government. The NBA offers free consultations and can be contacted today.