Guide 1 Financial Planning Families

Living Unlimited

Money, Planning, and Your Family

A Guide to Financial and Legal Tools for Families of People with Disabilities

Last updated: July 2026.

Why This Guide Exists

Planning for the future looks different when a family member has a disability. The rules around money, benefits, and legal decisions are more complicated, and the stakes are higher. A well-meaning gift or an inheritance can accidentally disqualify someone from the benefits they depend on. A will written without the right tools can leave a family scrambling. A person may need support with decisions but not need someone to take over entirely.

This guide is here to help. It walks through the main financial and legal tools available to families across Canada, with a focus on the federal programs that apply everywhere and some key provincial details, especially for Ontario. You do not need to be a lawyer or a financial planner to use it. Read it at your own pace, and use it as a starting point for conversations with the professionals who can help you.

The social model of disability tells us that barriers are built into systems, not people. That is as true in financial and legal planning as anywhere else. These rules were not designed with people with disabilities in mind. This guide helps you work within them while you push for better.

Section 1: How Financial Planning Is Different for Families of People with Disabilities

Most financial planning guides talk about savings, investments, and retirement. Those things still matter for families of people with disabilities. But they come with an extra layer: most government disability benefits have rules about how much money a person can have, what counts as income, and who can own what. This is called means-testing.

Means-testing means that if a person with a disability receives a large gift, inherits money outright, or saves too much in their own name, they may lose access to the disability benefits that cover their basic needs. This is not fair. But it is the current reality in most provinces.

The tools described in this guide have been developed, in part, to work around these rules legally and ethically. They let families plan for the future while protecting access to the benefits that keep a family member safe and supported.

Key Issues Families Face

Here are some of the issues that come up most often for families planning for a person with a disability.

• Asset limits: Programs like ODSP in Ontario limit how much money a person can hold in their own name. Receiving an inheritance directly can cause them to lose benefits.
• Benefit clawbacks: Some programs reduce payments when other income rises. Understanding the thresholds matters before making financial decisions.
• Decision-making authority: Families often assume a parent or sibling will just take over when needed. The legal reality is more complicated. Without a plan, decisions may end up with the courts.
• Guardianship versus supported decision-making: Taking full legal guardianship of an adult strips away their rights. There are better, less restrictive options.
• Estate planning gaps: Without a proper will and trust structure, an inheritance can do more harm than good.

Section 2: The Registered Disability Savings Plan (RDSP)

What Is the RDSP?

The Registered Disability Savings Plan (RDSP) is a long-term savings account designed for Canadians with disabilities. It is offered through the federal government and works like a Registered Education Savings Plan (RESP), but for disability-related savings. It is one of the most powerful financial tools available to families.

The RDSP lets family members and others contribute money on behalf of a person with a disability. The government adds extra money through two programs: the Canada Disability Savings Grant and the Canada Disability Savings Bond. The money grows tax-free inside the plan.

Who Qualifies?

To open an RDSP, the beneficiary (the person with a disability) must:

• Be eligible for the Disability Tax Credit (DTC). This is the key gateway. You cannot open an RDSP without first getting approved for the DTC.
• Be a Canadian resident with a valid Social Insurance Number.
• Be under the age of 60 at the time the plan is opened. Contributions can only be made until age 59.

There is no income test for the RDSP itself. Families at all income levels can benefit, though the amounts of government matching depend on family income. Whose income counts changes as the beneficiary grows up. Until 31 December of the year the beneficiary turns 18, grant and bond are calculated on the parents’ or guardians’ combined income. From the year they turn 19, it is calculated on the beneficiary’s own income plus a spouse’s if they have one, which often means a large increase in entitlement. To keep receiving the right amount, the beneficiary must file a personal tax return every year starting in the year they turn 17.

Who Can Open and Contribute?

If the person with a disability is an adult and can make their own decisions, they open the plan themselves. If they have a legal representative (guardian, trustee, or holder of a power of attorney), that person can open the plan on their behalf.

Once open, anyone can contribute: parents, grandparents, siblings, friends, or the person themselves. The lifetime contribution limit is $200,000. There is no annual limit on private contributions.

The Canada Disability Savings Grant (CDSG)

The Canada Disability Savings Grant is government money added to an RDSP based on contributions and family income. It is a matching grant, meaning the government matches your contributions at different rates depending on income.

• For 2026, if family income is $117,045 or less: the government contributes $3 for every $1 on the first $500, then $2 for every $1 on the next $1,000. Contributing $1,500 in a year secures the maximum $3,500 grant. Thresholds are indexed annually and the 2026 figures are based on income reported on your 2024 return.
• For 2026, if family income is above $117,045: the government contributes $1 for every $1 on the first $1,000, to a maximum grant of $1,000 a year.

The maximum lifetime grant is $70,000. Grants are paid up to 31 December of the year the beneficiary turns 49. When you are catching up on carry-forward years, the most grant that can be paid in any single year is $10,500, so a large catch-up can take several years to collect. Unused grant room carries forward, and you can catch up on up to 10 years of missed grants.

The Canada Disability Savings Bond (CDSB)

The Canada Disability Savings Bond is government money paid to lower-income Canadians with disabilities. Unlike the grant, the bond does not require any contributions. The government deposits it automatically once you qualify.

• For 2026, family income of $38,237 or less: the full $1,000 a year is deposited automatically.
• Between $38,237 and $58,523: a reduced amount is paid, decreasing as income rises.
• $58,523 or above: no bond is paid.
• These thresholds are indexed each year. The 2026 amounts are based on income reported on your 2024 tax return.

The maximum lifetime bond is $20,000, and bond eligibility ends on 31 December of the year the beneficiary turns 49. Unused bond room carries forward for up to 10 years, and unlike the grant it needs no contribution to collect. Someone opening a plan late can receive up to $11,000 at once: $1,000 for each of the past ten eligible years plus the current year.

How to Open an RDSP

You open an RDSP at a bank or financial institution that offers them. Not all institutions do, so you may need to shop around. Steps:

• Apply for and receive approval of the Disability Tax Credit. You need a signed T2201 form from a qualified medical professional.
• Choose a financial institution that offers RDSPs. Major banks and credit unions are a starting point.
• Complete the RDSP application at the institution and designate a beneficiary and a plan holder.
• Start contributing and apply for government grants and bonds through the institution.

Withdrawal Rules

The RDSP is designed for long-term savings. There are rules about withdrawals that are important to understand before opening a plan.

There are two types of withdrawals: Lifetime Disability Assistance Payments (LDAPs), which are regular scheduled payments that must begin by the end of the year the beneficiary turns 60, and Disability Assistance Payments (DAPs), which are one-time or occasional withdrawals.

If the plan holder withdraws money within 10 years of receiving a government grant or bond, the government takes back some or all of those contributions. This is called the 10-year repayment rule.

• If you withdraw before the 10-year rule clears: you must repay $3 of government contributions for every $1 you withdraw.
• RDSP withdrawals are only partly taxable. Your own contributions come back out tax free. The government grants and bonds, and the investment growth, are taxable to the beneficiary in the year received. Because most beneficiaries have low taxable income, the tax owing is often small or nil.

Section 3: The Disability Tax Credit (DTC)

What Is the Disability Tax Credit?

The Disability Tax Credit (DTC) is a non-refundable federal tax credit. It reduces the amount of income tax a person pays. On its own, it can save hundreds or thousands of dollars in taxes each year. But its real importance is as a gateway: many federal and provincial programs, including the RDSP, require DTC approval before you can access them.

Who Can Qualify?

The DTC is available to people with severe and prolonged impairments in physical or mental functions. It covers a wide range of conditions, including:

• Mobility impairments affecting the ability to walk
• Vision and hearing impairments
• Autism and other developmental disabilities
• Chronic pain and fatigue conditions that significantly affect daily living
• Severe mental health conditions
• Intellectual disabilities

The key test is whether the impairment markedly restricts the person in one or more basic activities of daily living, or whether it takes an excessive amount of time to complete those activities, even with therapy or medication.

How to Apply

To apply for the DTC, you need a completed T2201 form (Disability Tax Credit Certificate). This form has two parts: one filled out by you or the applicant, and one filled out by a qualified medical professional.

Qualified professionals include doctors, nurse practitioners, optometrists, audiologists, occupational therapists, psychologists, and physiotherapists, depending on the nature of the impairment. They may charge a fee for completing the form.

• Download the T2201 from canada.ca.
• Have your medical professional complete their section.
• Submit the form to the Canada Revenue Agency (CRA) online, by mail, or with your tax return.
• Wait for the CRA's decision. It can take several months.

If approved, the DTC is usually valid for a set number of years and then requires renewal. The approval letter will tell you the validity period.

How the DTC Connects to the RDSP

You cannot open an RDSP without an approved DTC. The financial institution will ask for your DTC approval letter or verify your status with the CRA using your Social Insurance Number.

If a DTC application is refused, you can appeal. The appeal process starts with a review by the CRA, and can proceed to the Tax Court of Canada if needed. Disability advocacy organizations can help with appeals.

Retroactive Claims

If a person was eligible for the DTC in previous years but did not claim it, they can apply for a refund of taxes paid in those years. The CRA allows retroactive claims going back up to 10 years.

This is often overlooked. Families who have been managing a disability for years without claiming the DTC may be entitled to a significant refund. It is worth looking into, especially if the disability began in childhood.

Section 4: The Henson Trust (Ontario) and Similar Tools Across Canada

What Is a Henson Trust?

A Henson Trust is a type of discretionary trust named after a landmark Ontario court case from 1989. In that case, the court confirmed that a fully discretionary trust does not count as an asset belonging to the beneficiary for the purposes of Ontario Disability Support Program (ODSP) eligibility.

In plain language: if someone leaves money to a person with a disability through a Henson Trust, rather than leaving it directly to them, the person can keep their ODSP benefits. The trust money is available to improve their quality of life without replacing their basic income support.

Why Does This Matter for ODSP?

ODSP has strict rules about how much money a person can hold. If a person with a disability inherits money directly, their savings may exceed the ODSP asset limit, and they could lose benefits until the money is spent down. A Henson Trust avoids this because the beneficiary does not legally own the money in the trust. The trustee holds it on their behalf.

How a Henson Trust Works

In a Henson Trust, a trustee holds and manages money or property on behalf of the beneficiary. The trust deed (the legal document creating the trust) gives the trustee complete discretion over how and when money is paid out. Because the beneficiary has no legal right to demand payment, ODSP does not count the trust assets as belonging to the beneficiary.

The trustee can pay for anything that improves the beneficiary's quality of life: a vacation, a computer, home modifications, medical treatments not covered by OHIP, a vehicle, and so on.

How to Set Up a Henson Trust

A Henson Trust is usually created through a will. When a parent or family member dies, their estate flows into the trust rather than going directly to the person with a disability. It can also be set up as a living trust during the trust creator's lifetime, though this is less common.

• Consult an estate lawyer with experience in disability trusts. This is not a DIY project.
• The trust deed must use fully discretionary language. The trustee must have absolute discretion, with no entitlement by the beneficiary to demand payment.
• Choose a trustee carefully. This person will hold significant power over the beneficiary's finances for potentially many years.
• Name a successor trustee in case the first trustee cannot continue.
• Include guidance in the trust document about how you want the trust used, even though the trustee has discretion. A letter of wishes can help.

Choosing a Trustee

The trustee is a critical choice. They must understand the beneficiary's needs and be willing to use the trust funds in their best interest. Options include:

• A trusted family member or close friend who knows the beneficiary well
• A professional trustee, such as a trust company, which is reliable but may be less personally connected
• A non-profit organization that provides trustee services, such as PLAN (Planned Lifetime Advocacy Network)

Other Provinces

Ontario is not the only province where discretionary trusts protect disability benefits. Similar protections exist across Canada, though the rules vary by province.

• In British Columbia, assets held in a discretionary trust are generally exempt from the asset limits that apply to the Persons with Disabilities (PWD) benefit.
• In Alberta, similar protections exist for those receiving the Assured Income for the Severely Handicapped (AISH) program.
• Other provinces have varying rules. Consult a local estate lawyer or disability legal clinic for guidance specific to your province.

Section 5: ODSP Asset Limits and How Planning Protects Eligibility (Ontario)

What Are the ODSP Asset Limits?

ODSP is Ontario's disability income support program. It has strict limits on how much money and property a person can hold and still remain eligible. as of 2026, the basic asset limit for a single person is $40,000. This includes cash, savings accounts, investments, and the cash value of life insurance policies.

Certain assets are exempt from this limit. The most important exemptions are:

• The home you live in (primary residence)
• One vehicle (a second may be exempt where it is needed for medical or employment reasons)
• Assets held in an RDSP
• Assets held in a fully discretionary trust (such as a Henson Trust)
• Prepaid funeral arrangements up to certain limits

How Receiving Money Can Affect ODSP

If a person on ODSP receives a large sum of money, such as an inheritance, a legal settlement, or even a large gift, and it brings their assets above the limit, they must report it. Their benefits may be suspended until their assets fall back below the limit.

This is called a benefit suspension, not a disqualification. Once assets fall below the limit, the person can reapply. But the process is stressful and can leave someone without income support for months.

How to Protect ODSP Eligibility

The most effective way to protect ODSP eligibility when leaving an inheritance is to use a Henson Trust. Money in a fully discretionary trust is not counted as the beneficiary's asset.

Other strategies include:

• Maximizing RDSP contributions. Money in an RDSP is exempt from ODSP asset limits.
• Giving gifts in the form of exempt assets: home modifications, a vehicle for disability-related purposes, or prepaid funeral arrangements.
• Spending down non-exempt assets on exempt purchases before an estate is settled, if the person is already over the limit.

Section 6: Supported Decision-Making, Guardianship, and Powers of Attorney

The Core Principle

Canada signed the United Nations Convention on the Rights of Persons with Disabilities (CRPD) in March 2007 and ratified it in March 2010, which is the point at which it became binding on Canada. One of its central principles is that people with disabilities have the right to make their own decisions, just like everyone else. Legal systems should support decision-making, not replace it.

This principle pushes back against the traditional approach of guardianship, where one person is given legal authority to make decisions for another adult. Guardianship strips away legal rights and should be a last resort, not a default.

What Is Supported Decision-Making?

Supported decision-making means that a person with a disability makes their own decisions, with help from people they trust. A supporter might explain options, gather information, provide context, or help communicate a decision. But the decision belongs to the person with the disability.

Supported decision-making can be informal, relying on a network of trusted family and friends. Or it can be formalized through a written agreement that names specific supporters and describes their role. British Columbia has legislation recognizing supported decision-making agreements. Other provinces are at different stages of developing formal frameworks.

Power of Attorney in Ontario

A power of attorney is a legal document where a person (the grantor) gives another person (the attorney) authority to act on their behalf. In Ontario, there are two types:

• Continuing Power of Attorney for Property: gives authority over financial decisions, and continues even if the person becomes mentally incapable.
• Power of Attorney for Personal Care: gives authority over personal decisions, including health care, housing, diet, and clothing.

A power of attorney can be limited in scope. It does not have to cover everything. A person might grant authority only over specific financial accounts.

Importantly, only a person with legal capacity can grant a power of attorney. If a person has been found legally incapable, it is too late to draft one. Planning ahead matters.

Guardianship in Ontario

Under Ontario's Substitute Decisions Act, guardianship can be granted by the courts when a person is found legally incapable of managing their own affairs. A guardian of property manages financial decisions. A guardian of the person manages personal care decisions.

Guardianship is the most restrictive form of substitute decision-making. Courts are required to consider less restrictive alternatives before granting guardianship. If a family believes guardianship is needed, they should first explore whether supported decision-making, a power of attorney, or a limited representative agreement would meet the same need.

Section 7: Wills and Estate Planning for Families with Members with Disabilities

What Happens Without a Will

If a person dies without a will (called dying intestate), provincial law decides who inherits. In Ontario, the Succession Law Reform Act sets out the rules. A family member with a disability would typically inherit a share of the estate directly. Depending on their benefits situation, this could cause serious problems, including loss of benefit eligibility.

Without a will, there is no way to direct an inheritance into a Henson Trust. The money flows directly to the person.

What a Good Will Does

A will that accounts for a family member with a disability should include:

• Direction that the family member with a disability's share of the estate flows into a Henson Trust rather than to them directly.
• Naming a trustee (and a backup trustee) for the trust.
• A letter of wishes explaining how the trust should be used. This is not legally binding but gives the trustee guidance.
• Naming a guardian for any minor children.
• Clear instructions about specific assets, such as a home that a family member with a disability lives in.

Working with an Estate Lawyer

Estate planning for families with members with disabilities is specialized. Not every general practice lawyer has the experience to do it well. Look for a lawyer with experience in disability trusts and RDSP planning. Some community legal clinics also offer estate planning assistance for low-income families.

Reviewing Your Will Regularly

Benefits rules, family situations, and the law change over time. Review your will after any major change: a shift in benefits programs, a change in trustees, a change in provincial law, or a change in your family's financial situation.

Section 8: Canada Pension Plan Disability Benefit (CPP-D)

What Is CPP-D?

The Canada Pension Plan Disability Benefit is a federal benefit paid to people who have worked and contributed to the Canada Pension Plan and who now have a severe and prolonged disability that prevents them from working regularly. It is an earned benefit based on contributions made during working years, not a needs-based program.

Who Qualifies?

• You must have a severe and prolonged disability that makes you regularly incapable of doing substantially gainful work.
• You must have made sufficient CPP contributions in 4 of the last 6 years, or 3 of the last 6 years if you have 25 or more years of contributions.

A disability is considered prolonged if it is expected to be of indefinite duration or likely to result in death.

How to Apply

You apply through Service Canada. The application includes a medical report from your doctor. The process can take several months. Many first applications are denied; if yours is denied, you have the right to appeal.

How CPP-D Interacts with Other Benefits

CPP-D income counts as income under most provincial disability programs. If you receive ODSP and begin receiving CPP-D, your ODSP is reduced dollar for dollar. The monthly earnings exemption does not help here: ODSP defines earnings as money from work, and payments under an income replacement scheme such as the Canada Pension Plan are treated as unearned income with no exemption. Receiving CPP-D usually leaves your total income roughly unchanged in the short term, though CPP-D is generally the more secure benefit and carries no asset test.

When a child with a disability turns 18 and their parent retires or dies, the child may also be eligible for a CPP Children's Benefit or Survivor's Benefit. These are separate programs worth exploring.

Section 8b: The Canada Disability Benefit

The Canada Disability Benefit is the newest federal program and this guide previously did not mention it. Enacted by Bill C-22, which received royal assent on 22 June 2023, it had its first month of eligibility in June 2025 and began paying in July 2025. For July 2026 to June 2027 the maximum is $204.20 a month ($2,450.40 a year), indexed each July.

To qualify you must be aged 18 to 64, resident in Canada, approved for the Disability Tax Credit, and have filed a tax return. The benefit is income tested and reduces as adjusted family net income rises.

You have to apply. It is not automatic and nobody enrols you. Disability Tax Credit approval makes you eligible, it does not register you. The benefit is administered by Service Canada, not the Canada Revenue Agency, and you can apply online, by phone, at a Service Canada office, or on form CDB0004 (CDB0005 for a legal representative). Back payments reach 24 months from the date Service Canada receives your application, never earlier than June 2025, so applying late costs money permanently.

From September 2026 there is also a one-time $150 supplemental payment for each approved Disability Tax Credit certificate, to offset the cost of having the certificate completed. That one does arrive without a separate application.

Every province and territory except Alberta exempts the benefit from provincial disability income calculations, so it sits on top of your provincial payment. Ontario confirmed in 2026 that it will not claw it back from ODSP. Alberta recovers it dollar for dollar from AISH and from the Alberta Disability Assistance Program that launched alongside AISH on 2 July 2026, and is the only jurisdiction doing so.

Section 9: Provincial Disability Benefit Programs Across Canada

Each province runs its own disability income support program. The rules, amounts, and eligibility criteria differ significantly. This section provides a brief overview. No matter where you live, the key message is the same: know your provincial program's rules before making any financial decisions that could affect eligibility.

For up-to-date information, visit your provincial government website or contact a disability advocacy organization in your area. Rules change, and the amounts in any guide can quickly become outdated.

Section 10: Working While Receiving Disability Benefits

Federal Programs

CPP-D requires you to report any work activity. If you earn above the substantially gainful employment threshold (updated annually), your CPP-D benefits may stop. However, a provision called the CPP-D Return to Work provision allows you to attempt a return to work for a trial period without immediately losing benefits.

ODSP (Ontario)

ODSP has an earnings exemption. As of 2026, a person with a disability can earn up to $1,000 a month in net employment income with no reduction in ODSP. Above that, ODSP deducts 75 cents of every dollar, not 50. Put another way, 25% of your net earnings above $1,000 is exempt. Child care costs and approved disability-related work expenses are deducted before that calculation, which softens it, and you also receive a $100 Work-Related Benefit in any month you earn. The 50% figure that circulates widely applies to a non-disabled spouse or an adult child, who have a $200 monthly exemption and then a 50% deduction. It does not apply to the person with the disability. Working can still increase your total income, even while on ODSP.

Reporting all income to ODSP is legally required. Failing to report can lead to overpayment demands and potential fraud allegations.

Other Provincial Programs

All provincial disability programs have their own income reporting rules and exemptions. Some are more generous than others. Before accepting employment, check the specific rules for your province to understand how earnings will be treated.

Section 11: Where to Get Help

You do not have to figure all of this out on your own. There are organizations and professionals across Canada that specialize in exactly these issues.

Legal Help

• ARCH Disability Law Centre (Ontario): provides legal representation and advice to people with disabilities in Ontario. archdisabilitylaw.ca
• Community Legal Clinics: many communities have free legal clinics that help with benefits, wills, and disability-related legal issues. Find yours through legalaid.on.ca in Ontario or your provincial legal aid program.
• Estate and Disability Lawyers: look for lawyers with experience in disability trusts, RDSPs, and disability estate planning. The Society of Trust and Estate Practitioners (STEP Canada) has a directory at step.org.

Financial and RDSP Planning

• RDSP Resource Centre: independent, non-profit source of information about RDSPs. rdsp.com
• PLAN Institute (Planned Lifetime Advocacy Network): helps families build networks of support and plan for the future, including trust administration. planinstitute.ca
• Your bank or credit union: financial institutions that offer RDSPs can walk you through opening an account and applying for government grants and bonds.

Benefits Navigation

• Income Security Advocacy Centre (ISAC): Ontario-based organization focused on income support for people with low incomes, including those with disabilities. incomesecurity.org
• Service Canada: for federal programs including CPP-D and RDSP bonds. canada.ca/en/employment-social-development

National Advocacy

• Disability Without Poverty: national campaign for a federal disability benefit with dignity. disabilitywithoutpoverty.ca
• Council of Canadians with Disabilities: national organization working for the rights of Canadians with Disabilities. ccdonline.ca

A Final Word

Planning for the future is an act of love and of advocacy. When families take the time to understand these tools and put them in place, they protect the rights and wellbeing of the people they care about. They also push back, in a small but meaningful way, against a system that was not designed with people with disabilities in mind.

This guide is a starting point. Every family's situation is different. The rules change. What matters most is that you do not wait, because the cost of waiting is almost always higher than the cost of planning now.

Take the first step today: apply for the Disability Tax Credit, make an appointment with an estate lawyer, or call the RDSP Resource Centre. You do not have to do everything at once.

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Sources. Registered Disability Savings Plan, grant and bond amounts, income thresholds and carry-forward rules: How much you could get in grants and bonds, Employment and Social Development Canada (2026 figures). Disability Tax Credit: Canada Revenue Agency. Canada Disability Benefit eligibility, amount and application: Do you qualify, How much you could receive, Apply. Bill C-22: Parliament of Canada. CPP disability eligibility and amounts: Employment and Social Development Canada. ODSP earnings rules, the 75% deduction and the Work-Related Benefit: Working and earning on the Ontario Disability Support Program, Government of Ontario. ODSP deductions and the treatment of unearned income: ODSP policy directive 5.3. CRPD signature and ratification: United Nations.

Dollar figures and thresholds change, most often each January or July. Every figure here carries the year it applies to. Confirm any amount with the program itself before making a decision that turns on it.