Making the RDSP Work for Homeownership: Exploring New Options

DECEMBER 2019

In our May 2019 blog post we shared My Home, My Community’s goal of finding ways to make Registered Disability Savings Plans (RDSPs) more useful for people with disabilities and their families when it comes to housing security. We believe that giving people with a disability the opportunity to use the money saved in an RDSP to pay for safe, stable housing has amazing potential, but we need to be clear on what we’re working with. And so, in our work to date, we have:

  • Held focus groups. We’ve talked to self-advocates, families of people with an intellectual disability, and professionals working in disability in order to understand their experiences with the RDSP, their thoughts and concerns about homeownership, and their suggestions for needed changes. 

  • Completed a market analysis. This research collects information about how much money is in RDSPs now, how long people usually wait before accessing the money, the rules for taking money out, and what groups of people are or are not opening RDSPs.

  • Prepared a technical analysis. This report looks at how the RDSP program is currently structured, its limitations, and any barriers that may stop people from using the money in their RDSP to buy a home.   

Our next step was to come up with some options about how the RDSP could be used for housing stability or homeownership. Some possible options include: 

  • Improving Eligibility and Access, including separating the RDSP from the Disability Tax Credit (DTC); accepting people who qualify for other federal and provincial disability programs; removing or reducing the need for people with intellectual disabilities to reapply for the DTC; and, automatically creating RDSP accounts for people who don’t have them. 

  • Increasing Money in the RDSP for Homeownership, including increasing contribution limits; increasing annual and lifetime maximums for Grants and/or Bonds; allowing people to “borrow forward” - apply for some or all future year grants and benefits that they will be entitled to, up to the lifetime maximum; and, increasing the amount of past grants that a person can “catch up” on at one time. 

  • Opening Access to RDSP Funds for Homeownership, including reducing the 10-year waiting period and/or reducing the penalty repayment amount; creating an RDSP Home Buyers’ Plan; creating a Disability Homeownership Assistance Payment option, providing regular withdrawals to cover a mortgage; expanding eligible investments in an RDSP so that buying a home could be considered an investment inside the RDSP and not a withdrawal; and, making sure the First-time Home Buyers’ Incentive also supports RDSP beneficiaries.

We used the ideas laid out in the Options Paper to assess viable solutions to be further developed. While many of the options hold promise for improving the housing security of people with developmental disabilities, the creation of an RDSP Home Ownership Plan will be our focus moving forward. 

We’re envisioning the RDSP Home Ownership Plan as a set of initiatives that could offer greater flexibility, encourage more growth of RDSPs, and make it easier to access funds for homeownership or other long-term housing.  We’ve started exploring what this would look like practically, including: 

  • Broadening the eligibility for Bonds and Grants

  • Increased flexibility in when people can claim Bonds and Grants

  • A new RDSP withdrawal option that would allow people to withdraw from their accounts without penalty if funds are used for the purchase of a principal residence

This solution does not address all the limitations of the RDSP program, but instead focuses on changing the program design to make it more suited to home ownership as a goal.  

Keep following the blog for exciting updates as we dive into designing the proposed RDSP Home Ownership Plan, get input from experts in the field, and share our learnings with you!