Carry Forward of Grant and Bond Implemented

As promised, Human Resources and Skills Development Canada have implemented the carry forward of unused entitlements to the Canada Disability Savings Grant and Bond.

The carry forward provisions to improve the Registered Disability Savings Plan were announced by Minister Flaherty in his 2010 budget and was effective for 2011.  The government has been developing its administrative systems.  We have confirmed with both the government and financial institutions that these amounts have been paid as of the end of January (2012).  You may want to check your accounts and or contact your financial institution to discuss whether investment instructions are needed.

Transactions dated January 1, 2011 or later have been “reprocessed” for the carry forward.  This includes payment of any Canada Disability Savings Bond that a beneficiary would have been entitled to retroactive to 2008 and any matching Canada Disability Saving Grants that contributions made after January 1, 2011 would have attracted had they been applied to previous years.

From this point forward, all contributions will attract the best matching of grant first.  The system automatically looks for the “best” and “oldest” matching rate first.  All available 300% matching rates are used first.  If there is excess, the earliest entitlements will be used first (e.g. 2008 will be used before 2009).  Then available 200% matching rates are used and finally, 100% matching rates are used.

An overview of the RDSP carry forward rules is available here.

Additional details clarifying RDSP carry forward rules is available here.