RDSP Withdrawls

RDSP withdrawals are also known as disability assistance payments.

There are two types of payments from an RDSP – Lifetime Disability Assistance Payments (LDAPs) and Disability Assistance Payments (DAPs).

LDAPs are recurring annual payments that once started, must be paid until the plan is terminated or the beneficiary has died.

LDAPs may begin at any age, but must commence by the end of the year in which the beneficiary turns 60.

Payments are generally limited to a maximum tied to the fair market value of the plan and the beneficiary’s life expectancy (age 80 in most cases).

The maximum amount does not apply where a physician certifies that the RDSP beneficiary is not expected to survive beyond five years.

DAPs are lump sum payments made to the beneficiary or the beneficiary’s estate.

DAPs may only be made if the plan’s fair market value after payment will be more than the Assistance Holdback Amount (CDSGs and CDSBs received in the 10-year period prior to a disability assistance payment).

Both LDAPs and DAPs can be used for disability or non-disability-related expenses.

As of 2014, LDAP and DAP maximums can now be the greater of the maximum based on age or 10% of the value of the plan at the beginning of the year, whichever is greater.