TORONTO, ONTARIO--(Marketwire - March 22, 2013) - BMO Financial Group today commended the Federal Government for the proposed changes to make the Registered Disability Savings Plan (RDSP) more accessible.
The 2013 Federal Budget, introduced yesterday, highlighted changes proposed in the Government's Economic Action Plan 2012, which included:
- The allowance of certain family members to become plan holders for those beneficiaries who might not be able to enter into a contract or do not have legal representation.
- The development and implementation of a streamlined process that provinces and territories can adopt to simplify the process of opening and making withdraws from an RDSP for beneficiaries who may not be able to enter into a legal contract.
"We congratulate Minister Flaherty for his ongoing leadership to promote the RDSP," said Rajiv Silgardo, Co-CEO, BMO Global Asset Management. "The proposed enhancements will make a great program even better and reduce the financial stress for people with disabilities. We hope all provinces and territories will implement systems that will make it easier for people with disabilities and their families.
"When Minister Flaherty took the important step of introducing the RDSP, Canada showed the world how a smart policy can help provide financial security and independence for people with disabilities," noted Mr. Silgardo.
Mr. Silgardo added that, as the first bank to introduce RDSPs and as the market leader in the space, BMO is committed to promoting the adoption of the RDSP and helping educate Canadians about the advantages of the program.
About the RDSP
The RDSP encourages families and individuals to save for the long-term financial security of persons with severe and prolonged disabilities. It is available to Canadians who are eligible for the Disability Tax Credit, and can provide "peace of mind" to parents and other contributors who may put a plan in place for a beneficiary with a disability.
- Contributions are not tax deductible but grow on a tax-deferred basis
- Government incentives such as the Canada Disability Savings Grant (CDSG) and Canada Disability Savings Bond (CDSB) could add up to an additional $90,000 per individual
- When earnings are withdrawn as part of a disability assistance payment, they are taxable in the hands of the beneficiary (likely to be taxed at a lower rate)
- Only one beneficiary can be named per RDSP. A beneficiary can hold only one RDSP
For more information on the RDSP, please visit:
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