Since Registered Disability Savings Plan (RDSP) grants and bonds end in the year the beneficiary turns 49, many disabled Canadians believe that it is pointless to open an account after this age. Even if they qualified for the Disability tax credit (DTC) in past years, carry forward rules do not allow grants and bonds to be claimed retroactively once the beneficiary turns 50. While they are not eligible for government grants and bonds, there are several reasons why someone may want to open an RDSP after age 49.
Asset protection
In all 13 provinces and territories, the RDSP is classified an exempt asset when determining provincial disability benefits. This means that support payments will not be reduced or terminated when the balance of the account exceeds asset limits. These thresholds are as of 2026.
| Province | Disability Program | Asset Limit for singles | Asset limit for couples |
| Ontario | ODSP | $40,000 | $50,000 |
| BC | PWD | $100,000 | $100,000 |
| Alberta | AISH | $100,000 | $100,000 |
| Saskatchewan | SAID | $2,000 | $4,000 |
| Manitoba | EIA Disability | $4,000 | $8,000 |
| Quebec | Social Solidarity | $2,500 | $5,000 |
| New Brunswick | Extended Benefits | $10,000 | $10,000 |
| Nova Scotia | ESIA | $2,000 | $4,000 |
| PEI | Social Assistance | $5,000 | $11,000 |
| Newfoundland | Income Support | $6,000 | $11,000 |
| Yukon | Social Assistance | $100,000 | $100,000 |
| NWT | IASPD | $75,000 | $75,000 |
| Nunavut | Income Assistance | $5,000 | $10,000 |
The RRSP/RRIF rollover
When a parent or grandparent passes away, their Registered Retirement Savings Plans (RRSPs) or Registered Retirement Income Funds (RRIFs) can be rolled over tax free into their child’s or grandchild’s RDSP. The rollover is available to the end of the calendar year in which the beneficiary turns 59 years of age. Absent of an RDSP, that money could be taxed as income for the estate often at an unfavourably high tax bracket.
Tax deferred growth
Even though contributions are not tax deductible, the growth inside an RDSP account is tax sheltered until it is taken out. Taxes are paid only on the growth when the money is withdrawn starting at a minimum of age 60. Personal contributions are not subject to taxes.
Liquidity
Because there are no government grants or bonds to trigger a repayment penalty, the RDSP has the flexibility of a regular savings account with the asset protection of a trust absent trust administration fees. Money can be withdrawn at any time.