CRA refers to some guidelines applied by it in considering financial-hardship requests for excess withdrawals from a PGAP RDSP

For a registered disability savings plan (“RDSP”) that is a primarily government assisted plan (a “PGAP”), i.e., government contributions exceed plan holder contributions, annual withdrawals are limited to 10% of the value in the RDSP at the beginning of the year – except that CRA has indicated that it may permit withdrawal requests above that limit in circumstances of financial hardship where it is just and equitable to do so.

CRA referred to three of its financial-hardship guidelines in this regard:

1. Whether the RDSP beneficiary would suffer significant hardship, loss or disadvantage from a refused waiver, e.g., failure to meet the basic necessities of life, or harm to health.
2. Whether the granting of the waiver would negatively impact the financial viability of the trust, e.g., referencing impact on family members or caregivers who rely on the trust’s integrity for planning and support.
3. Whether the granting of the waiver is consistent with the legislative intent; for example, the RDSP program is not intended to help anyone other than the beneficiary.

CRA indicated that it also has a general guideline that the plan holder must also be the plan beneficiary, given that most waiver requests received, where the holder and beneficiary are not the same individual, are clearly requests to help plan holders who are having financial hardship issues themselves, and not the RDSP beneficiary. However, where the holder and the beneficiary are not the same individual, and the RDSP issuer nonetheless is of the view that the beneficiary is experiencing financial hardship and that a waiver is in the beneficiary's best interests, the issuer is welcome to send a waiver request to CRA explaining why the request warrants an exception to this guideline.

Neal Armstrong. Summary of 17 June 2025 STEP Roundtable, Q.5 under s. 146.4(4)(j).