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Withdrawals and Payments from an RDSP

There are two types of payments that can be made from an RDSP:

  • Disability Assistance Payments can be any amount paid from the plan at any time (including a lump sum payment) but can only happen if contributions to the plan are greater than the amount contributed by the federal government (through grants and bonds).
  • Lifetime Disability Assistance Payments can begin at any time but once started they must continue and these payments must start in the year the plan beneficiary turns 60 if they have not already begun.
  • When money is withdrawn, the beneficiary will have to pay income tax only on the portion that is Grant, Bond or investment income.
  • Payments from an RDSP will not affect a beneficiary’s entitlement to other benefits such as the Canada Child Tax Credit, Old Age Security and Employment Insurance Benefits.