In this paper, Jack Styan explains the four significant measures announced in Budget 2012 that will make Registered Disability Savings Plans (RDSPs) more accessible and useful for people with disabilities and their families.  Since 2008, nearly 55,000 people with disabilities have opened RDSPs and have contributed $220 million.  Over the same period, the federal government has contributed nearly $450 million.  By the end of 2011, people with disabilities had amassed assets of well over $670 million, thanks to Registered Disability Savings Plans.

Budget 2012 announced that “qualified family members” may now act as holders of new RDSPs.  A new “Proportional Repayment Rule” will replace the “10-year rule” providing greater access to the funds in RDSPs without facing the draconian punishment of the 10-year rule: repaying up to $45,000 in federal government contributions irrespective of the size of the withdrawal.  Ottawa will now allow more funds to be withdrawn from RDSPs where government contributions exceed personal contributions.  Finally, Budget 2012 permits a tax-free rollover of investment income in a Registered Education Savings Plan to an RDSP in certain circumstances starting in 2013.