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September 8, 2017

Get an RDSP for Chrissake!

Six years ago I did a post on Canada's Registered Disability Savings Program.  Gerry Post recently sent the 2015 review of the program.  It's discouraging.

Any Canadian resident who is eligible for a disability tax credit is also eligible for a RDSP.  There are no requirements to have a job or to make private payments.

If a person makes payments on their own, they are matched up to $3500 depending on income.  For people with low income, the government will make a $1000 payment.

If you forgot to claim the $1000 in the past, there is a generous catch-up provision for up to $10,500.

In Nova Scotia, the province with the highest rate of disability, exactly 3,332 RDSPs were active in 2015.  This is absurd.

The average age of RDSP beneficiaries nationwide is 28.  A person receiving social assistance for disability is probably eligible for the disability tax credit.  Starting at age 28, such a person would have a RDSP balance of $84,066.96 at age 60.

In 2012, StatsCan estimated that 36,690 Nova Scotians had a "very severe" disability.  Say half could easily get a disability tax credit.  18,345.  On average they should be headed for a nice bank balance of $84,066.96.  That represents an asset of a billion and a half dollars.  Billion with a B.

Now there are a ton of reasons why this program might be overlooked, but it should be the responsibility of the Department of Community Services to require that every one of their clients receiving disability supports have an RDSP.  There is a page on their website, but it's singularly uninformative.  Financial health is an important concern.

That flushing sound you hear is a billion and a half dollars down the provincial toilet.  Really.

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