The disability savings bond no one has to fund

At the end of 2024, thirty four per cent of Canadians aged zero to forty nine who had been approved for the Disability Tax Credit held a registered disability savings plan. A year earlier the figure was thirty four point nine per cent, and the year before that thirty six point three per cent. The share is falling. Inside those same plans the money is growing. One part of the plan asks for no contribution at all: the Canada Disability Savings Bond. Roughly two in three people who have already cleared the hardest hurdle in the system receive none of it.

Three years of falling take up

Employment and Social Development Canada reports on the Canada Disability Savings Program each year. The 2024 report, issued 4 February 2026, puts take up among Canadians aged zero to forty nine approved for the Disability Tax Credit at thirty four per cent. The 2023 report put it at thirty four point nine per cent, and the year before that it was thirty six point three per cent. Three years, three declines. There is no 2025 annual report. Over the same period the assets held inside those plans rose from about ten point three billion dollars to about twelve point eight billion dollars.

One caution on the underlying counts. The 2024 report rounds the number of plans to the nearest thousand, giving three hundred and eleven thousand, while the 2023 report gives an exact count of two hundred and eighty two thousand two hundred and ten. Those two figures should not be subtracted as though the result were a precise difference.

The people in the missing two thirds are not strangers to the system. Each has already been approved for the Disability Tax Credit, the slowest and most intrusive step in the whole arrangement. What they have not done is open a plan and claim money that, for a household under the income thresholds, costs nothing to collect.

The bond asks for no contribution, the grant does

Two federal payments can go into a plan and they work differently. The bond requires no personal contribution: up to one thousand dollars a year, a lifetime maximum of twenty thousand dollars, and where entitlement has been carried forward the most payable into a single year is eleven thousand dollars. The grant matches what someone puts in: up to three thousand five hundred dollars a year, a lifetime maximum of seventy thousand dollars, and a one year maximum of ten thousand five hundred dollars.

For 2026 the issuer notice sets the bond thresholds on adjusted family net income. Thirty eight thousand two hundred and thirty seven dollars or less earns the full bond. More than that and under fifty eight thousand five hundred and twenty three dollars earns a partial bond. At or above fifty eight thousand five hundred and twenty three dollars, no bond is payable.

The grant has its own threshold. At an income of one hundred and seventeen thousand and forty five dollars or less, the plan earns three dollars for every one dollar on the first five hundred contributed, then two dollars for every one dollar on the next one thousand. One thousand five hundred dollars contributed therefore captures the full three thousand five hundred. Above that income the match drops to one dollar for every one dollar on the first one thousand.

One federal page still shows the 2025 thresholds

On 9 October 2026 the Canada Revenue Agency page titled "Canada disability savings grant and Canada disability savings bond" showed thirty seven thousand four hundred and eighty seven dollars, fifty seven thousand three hundred and seventy five dollars, and one hundred and fourteen thousand seven hundred and fifty dollars. The page says on its face that the thresholds shown are for 2025. Its last modified date reads 16 September 2026. It was touched during 2026 and still carries the earlier year’s numbers.

The direction of the gap is what matters to a household. The 2026 thresholds are higher than the 2025 ones. A family reading the older figures, comparing a 2024 income somewhere in the high fifties, may conclude they are over the line for the bond when under the 2026 numbers they are not. That is a reader walking away from money because of a year label.

Take the figures from the issuer notice for the year in question, Employment and Social Development Canada Notice number 577, bulletin CDSP slash PCEI dash 2025 slash 2026 dash 001 dash 577, dated 31 December 2025. Then ask the plan issuer to confirm in writing which year’s thresholds were applied to the entitlement they calculated. A written answer is checkable; a phone call is not.

Whose income counts, and from which year

Through 31 December of the year the beneficiary turns eighteen, entitlement is tested on the parents’ or guardians’ combined income. From the year the beneficiary turns nineteen, it is tested on the beneficiary’s own income, plus a spouse’s or common law partner’s where there is one. For a household whose income was always above the bond thresholds, that switch is why the plan deserves a second look the year a beneficiary turns nineteen. The family income that blocked the bond stops being the number that counts.

The income is not this year’s. Entitlement comes from the return filed two years earlier, so a 2026 entitlement is calculated on the 2024 return. That lag is why a late return can cost a year of bond.

A beneficiary should begin filing personal returns in the year they turn seventeen, and from nineteen onward must have filed for at least the two previous years. Filing a return that shows no income at all is not a formality. It is the step that makes the money payable. A person with nothing to report, and no tax to pay, still has to file.

Two ten year windows that are the same window

The Disability Tax Credit can be claimed for up to ten prior years where the person was eligible in those years and never claimed it. Separately, bond and grant entitlement carries forward for the previous ten years, and the plan did not need to exist during those years. Read together, the two rules describe the same ten years. Getting the credit approved retroactively is often the very act that creates the carry forward entitlement for the years it covers.

As an illustration of the rules and not a prediction: a beneficiary with retroactive approval covering earlier years, income under the full bond threshold in those years, and returns filed for them, could see as much as eleven thousand dollars of bond paid into a single year with no contribution made at all. That is the published annual ceiling where carry forward applies, not an expectation. A year of partial bond rather than full bond lowers it. A missing return removes that year. So does a year where income sat above the threshold, a year of non residency, and a year for which the credit was not approved. Historical years are assessed on the thresholds that applied in each of them, never on today’s income.

One practical instruction is worth carrying into the practitioner’s office. When discussing the T2201 application, ask whether the medical evidence supports earlier years as well, and say why you are asking. A practitioner who does not know that ten years of federal payments may hang on the answer has no reason to look back further than the present.

Forty nine, fifty nine and sixty are three different ages

These three get conflated constantly. At forty nine, grants and bonds stop: the last contributions that attract a grant are those made by 31 December of the year the beneficiary turns forty nine, and the bond is payable until the year they turn forty nine. At fifty nine, the plan itself is still available, and personal contributions can still be made until the end of that year. At sixty, the repayment obligation ends and lifetime disability assistance payments must begin by the end of that year.

The gap between the first two ages is where disappointment lives. Opening a plan at fifty five is permitted and revives nothing, because the bond and grant window closed six years earlier.

Reaching the full twenty thousand dollars of bond requires twenty eligible years before the end of the year the beneficiary turns forty nine. For someone approved for the credit late in life that arithmetic is already closed, which is why the ten year carry forward is not a bonus on top of a long run of payments. For a late approval it is most of what is available, and that is the reason to ask the retroactive question first rather than last.

The gateway, and the holder measure that expires

Three things open a plan: approval for the federal Disability Tax Credit, a Social Insurance Number, and Canadian residency when the plan is opened. The credit is assessed on the effect of an impairment rather than its name, across walking, mental functions, dressing, feeding, eliminating, hearing, speaking, vision, and life sustaining therapy. Approval comes through a marked restriction, the cumulative effect of significant limitations, or life sustaining therapy. A practitioner certifies on form T2201; the Canada Revenue Agency decides.

Three corrections are worth stating, because each one keeps people out. A diagnosis is not an approval. Holding another disability benefit does not settle the question, because the CRA states that eligibility does not depend on other federal or provincial benefits, and that receiving a Canada Pension Plan or Quebec Pension Plan disability benefit, or a private insurance benefit, does not necessarily mean a person is eligible. And owing no tax is not a reason to skip the application, because the approval is what opens the plan.

For an adult whose contractual competency is in doubt and who has no legally authorised representative, a temporary federal measure lets a qualifying family member, meaning a legal parent, spouse, common law partner or sibling, open the plan and act as holder. The CRA states the measure ends on 31 December 2026. It has been extended twice already, originally to 2018, then to 2023, then to the end of 2026. No federal page states what happens after that date to a holder already appointed under it, and that silence is worth raising with the issuer in writing.

One correction belongs beside it. Disability does not establish that an adult cannot enter a contract. An adult who can contract can generally be their own plan holder, and the measure is not the default route. Where competency genuinely is in question the durable answer is a legal representative, and that is a notary’s or a lawyer’s work, not a form.

Five things that cost money after the plan is open

First, the withdrawal rule. Where government assistance remains subject to repayment, three dollars of grant or bond is generally repaid for every one dollar withdrawn, capped at the assistance holdback amount. A five hundred dollar withdrawal can therefore send one thousand five hundred dollars back, and the plan falls by two thousand. The holdback tracks grants and bonds paid in the preceding ten years less anything already repaid. It is a rolling calculation, not a timer that expires ten years after the plan was opened.

Second, the statement balance is not the available amount. Where government money in the plan exceeds private contributions, the plan is primarily government assisted and the annual payment is limited to the greater of a statutory formula amount and ten per cent of plan value at the start of the year. Ask the issuer for the permitted payment amount rather than reading the balance and assuming.

Third, money comes out taxable. Returned contributions are not taxable, but grant, bond, investment earnings and rolled in retirement proceeds generally are. They are reported on a T4A slip and entered on line 12500. Once lump sum and lifetime payments pass the basic personal amount plus the disability amount, given as twenty six thousand seven hundred and ninety three dollars for 2026, the issuer withholds tax. Fourth, provincial benefits are a separate question. Federal guidance says opening and contributing will not affect other federal or provincial benefits, and separately names Quebec, New Brunswick and Prince Edward Island as places where a withdrawal may affect provincial benefits. In Quebec the plan is the regime enregistre d’epargne invalidite, the REEI.

Fifth, fees. A person can apply for the credit directly with the Canada Revenue Agency. The Disability Tax Credit Promoters Restrictions Regulations set a maximum of one hundred dollars for help completing the T2201 and one hundred dollars per taxation year for filing a claim, but the CRA states those Regulations are suspended by a court injunction until further notice. Do not assume a cap is being enforced against anyone offering to do the paperwork for a share of a refund.

What the federal pages do not say

Four silences are worth naming. No federal page states what Quebec actually does to a provincial benefit when money is withdrawn; the reader is sent to the province. No federal page states whether a qualifying family member holder may continue in that role after 31 December 2026. No federal page names the Guaranteed Income Supplement among the income tested benefits that exclude plan income, although the Canada Revenue Agency does name the GST and HST credit, the Canada Child Benefit, the Canada Workers Benefit, the social benefit repayment and the refundable medical expense supplement. And the issuer notices do not state which tax year’s income is used, nor publish the formula for a partial bond.

Those gaps are not reasons to stay out of the plan. They are the questions to put to the issuer and, where a provincial benefit is involved, to the province, in writing, before money moves.

One more thing belongs here, because it is widely reported as settled and is not. In May 2026 the Department of Finance announced proposed changes intended to make the credit application easier, including a streamlined route for certain long term conditions and a wider list of practitioners who may certify. These are proposals. As at 9 October 2026 consultations on draft legislative amendments had not taken place, nothing had come into force, and the Canada Revenue Agency application page still listed the existing certifying professions. An application filed today is filed under the existing rules.

What this practice does, and what it does not

This practice does not open, hold or administer registered disability savings plans. The government decides entitlement and the issuer the household chooses runs the plan. This practice also does not prepare returns and does not give tax advice: the filing questions in this article, the retroactive credit claim, the T4A slip and line 12500 all belong with an accountant. Capacity, guardianship, protection mandates and wills belong with a notary or a lawyer.

What the plan leaves out is a protection and continuity question. Every plan depends on a person who stays well enough to administer it for decades, and the plan cannot answer what happens in year four of a forty year arrangement if that person is gone. The money stays where it is. The administration stops. And the household income that paid for everything the plan does not cover stops at the same moment.

That is the gap worth a conversation, with no outcome promised and no product named in advance. If a household wants to look at it, a Financial Security Advisor can walk through what currently answers and what does not.

Frequently Asked Questions

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The plan itself, who can be a beneficiary and how contributions work, is set out in the RDSP explained, which this page deliberately does not repeat. Where a plan sits inside a larger estate, estate planning with a disabled beneficiary covers the will and trust side the plan does not touch, and incapacity planning covers the representative question that decides who may hold the plan. Because approval for the Disability Tax Credit is a separate test from any benefit already being paid, the Canada Pension Plan disability benefit and the Quebec Pension Plan disability pension are worth reading beside this one.