One of the most valuable — and least understood — RDSP rules is the 10-year carry-forward. If a beneficiary was eligible for the Disability Tax Credit (DTC) in past years but didn't have an RDSP, the grant and bond entitlements from those years aren't lost.
How it works
- Unused entitlements carry forward for up to 10 years (back to 2008 at the earliest).
- In any single year, the plan can receive up to $10,500 in grants and $11,000 in bonds.
- Bonds are paid automatically — no contribution needed. Grants require contributions.
- Each year's entitlement is based on the family income for that year.
An example
Amara is 30, approved for the DTC for the past 10 years, with a family income under $38,000. She opens her RDSP this year:
- Bonds: $1,000 for this year plus $10,000 of carried-forward bonds = $11,000, with no contribution.
- Grants: By contributing $4,500 this year, she can receive the $3,500 current-year grant plus $7,000 of catch-up grants = $10,500. She can keep catching up in future years.
Tip: ask for a retroactive DTC
When applying for the DTC, you can ask CRA to assess prior years. A retroactive approval can unlock years of carry-forward grants and bonds — and possibly a tax refund.
Try it yourself with our RDSP calculator (tick "Include catch-up").
Source: Employment and Social Development Canada — How much you could get in grants and bonds.
Watch
This article is general information, current as of its publication date, and is not personal financial, tax or legal advice.