New support for disabled

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PHIL HOSSACK / WINNIPEG FREE PRESS The Bairstow family, left to right: Barbara, Jilian, Todd and Charlie, in front, who has Autism Spectrum Disorder.

But it's with social skills that Charlie, who has Autism Spectrum Disorder, needs assistance, which will become more costly as he grows older.

That's why the new Registered Disability Savings Plan has parents like Barbara and Todd Bairstow overjoyed. What other program puts up to $3,500 in federal funds per year into a savings account to help people like their son?

"I think it's incredible for families," said Barbara. "Having this in place gives us peace of mind in the event that if we're gone, there will be money to assist Charlie."

The Registered Disability Savings Plan takes effect this year. The plan could eventually help up to 500,000 individuals across Canada. Statistics show about 17 per cent of Canadians have a disability, although not all would qualify for the RDSP.

Ottawa expects the program to eventually cost about $200 million annually.

The new RDSP "recognizes a growing problem in our society," said David Steen, CEO of the Society of Manitobans with Disabilities. "There are extra costs that go along with having a disability. We need to find way to pay this cost."

The savings plan will one day help Charlie to live independently, Bairstow said. For example, it could help defray future schooling costs. Charlie is passive when he's learning, aggressive when school is out, such as during summer. So he may always be furthering his education.

"He's very smart and his mind keeps going and going and going," his mother said.

The RDSP grants are mainly for families in lower- and middle-income categories. Families with net incomes under $75,769 can obtain a grant of $3 for every $1 contributed on the first $500; $2 for every $1 contributed on the next $1,000. That works out to a maximum of $3,500 in federal funds per year, on a $1,500 investment by individuals or families. It can grow to a maximum $200,000.

"Whether I have to beg, borrow or steal, I will max it out every year," said Bairstow.

The new program also pays an annual federal bond of $1,000 to disabled people with incomes under $21,287, and $500 on incomes from $21,287 to $37,885.

The catch for many people, particularly people on lower incomes, is they must first be approved for the Disability Tax Credit, which gives a tax break in the $2,000 range per year in recognition that disabled people incur extra costs.

But obtaining the DTC can be complicated. Bairstow was helped by Brematson and Associates, run by Susana Scott, whom Bairstow called "a pioneer in this field, fighting for people who need it." Scott has a disabled daughter and launched her company after she found a reluctance by volume-oriented tax filers to handle the often time-consuming Disability Tax Credit cases.

Brematson helped Bairstow get two years' worth of retroactive DTC refunds that the family will spend to send Charlie to mini-university over the summer.

Scott says there are easily tens of thousands of Canadians who are eligible for the DTC, many of them in low income brackets or on social assistance, but don't know it.

But there is great confusion over who is eligible for the DTC needed to access the RDSP.

Neither are doctors well informed. And navigating an application through the federal bureaucracy can be tricky, particularly if you make a mistake on one of the forms. Scott said about 30 per cent of clients she has successfully processed for the DTC had previously tried and failed.

For all of those reasons, the RDSP program will spread slowly at first, she predicts.

There are no restrictions on when or how RDSP funds can be used, although there is some penalty for early withdrawal in relation to the last federal contribution. The government contribution is taxable upon withdrawal but the personal contribution is not.

People still have until March 2 to sign up for the 2008 tax year. If someone does not yet have his or her DTC, it's probably too late to be eligible for the RDSP in 2008.

bill.redekop@freepress.mb.ca

Republished from the Winnipeg Free Press print edition January 11, 2009 A6