Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Principal Issues: 1. Could the CRA expand on the circumstances in which it would be just and equitable to permit a withdrawal that exceeds the 10% threshold? 2. Would the CRA provide a form to be used to capture the required information for making such a request? 3. Why does the CRA require that the plan holder also be the plan beneficiary, as this requirement would not be met in cases where an adult beneficiary is incapable of managing property or where the beneficiary of the RDSP is a minor and unable to be the plan holder? In both cases there could still be financial hardship.
Position: 1. In general terms the CRA looks at whether the waiver request conforms to the rule of law, the principles of fairness, and due process. 2. The CRA will create a form for RDSP issuers to fill out when requesting a waiver of the 10% threshold for financial hardship. It is anticipated this form will be posted to our website in 2026. 3. As the sole purpose of an RDSP is to benefit the RDSP beneficiary, the CRA must make sure that the beneficiary's funds are only being used for the beneficiary's benefit, and not for the benefit of other people.
2025 STEP CRA Roundtable – June 17, 2025
QUESTION 5. RDSP Financial Hardship Withdrawals
A registered disability savings plan (“RDSP”) is categorized as a primarily Government assisted plan (“PGAP”) if government contributions exceed plan holder contributions. Where an RDSP is a PGAP, annual withdrawals are limited to 10% of the value in the RDSP at the beginning of the year. In 2024, the CRA advised that it may permit certain withdrawal requests above the limit in circumstances of financial hardship where it is just and equitable to do so. One of the requirements set out by the CRA was that the plan holder must also be the plan beneficiary.
1. Could the CRA expand on the circumstances in which it would be just and equitable to permit a withdrawal that exceeds the 10% threshold?
2. Would the CRA provide a form to be used to capture the required information for making such a request?
3. Why does the CRA require that the plan holder also be the plan beneficiary, as this requirement would not be met in cases where an adult beneficiary is incapable of managing property or where the beneficiary of the RDSP is a minor and unable to be the plan holder? In both cases there could still be financial hardship.
CRA Response
Part 1.
The CRA considers a waiver request in conformity with the rule of law, the principles of fairness, and due process. We consider each individual circumstance in order to achieve fair treatment and outcomes, especially when rigid application of the law would lead to undue hardship, inequity, or unintended consequences.
These are some of the guidelines that the CRA uses when considering whether it is just and equitable to approve an RDSP waiver request for financial hardship:
- Would the RDSP beneficiary suffer significant harm, loss, or disadvantage from a refused waiver? (Compliance of the law would lead to an unjust or inequitable result).
- e.g. Could the beneficiary meet the basic necessities of life without access to the trust’s funds? Would the beneficiary’s health suffer if they do not have access to the trust’s funds?
- Would granting the waiver negatively impact the financial viability of the trust? Would there be any impact on family members or caregivers who rely on the trust’s integrity for planning and support?
- Would application of the waiver be consistent with legislative intent?
- e.g. Is the beneficiary using the money for their own benefit or to help someone else? (Perhaps the intention is to help out a relative who is undergoing financial difficulty). The RDSP program is not intended to help anyone other than the beneficiary.
These guidelines are intended to help make sure that the underlying intent of the waived requirement is met while still safeguarding the trust’s resources and ensuring the disabled person’s long-term financial well-being.
Part 2.
The CRA will create a form for RDSP issuers to fill out when requesting a waiver of the 10% threshold for financial hardship. We anticipate having this posted to our website in 2026.
Part 3.
As the sole purpose of an RDSP is to benefit the RDSP beneficiary, the CRA must make sure that the beneficiary’s funds are only being used for the beneficiary’s benefit, and not for the benefit of other people. The RDSP trustee also has a fiduciary duty to make sure that the RDSP trust is only being used for the benefit of the beneficiary.
Where the beneficiary and the holder are separate individuals the determination of whether the property of the RDSP is used for the benefit of the beneficiary becomes difficult. Currently, most waiver requests that the CRA has received where the holder and beneficiary are not the same individual are clearly requests to help plan holders who are having financial hardship issues and not for the benefit of the RDSP beneficiaries.
Where an RDSP issuer is of the view that the beneficiary (where the holder and beneficiary are not the same individual) is experiencing financial hardship and the issuer feels that requesting a waiver is in the beneficiary's best interest, they are welcome to send the waiver request to the CRA. The issuer should provide an explanation for why they feel the request warrants an exception to the posted guidelines.
William King
2025-106155
Response prepared by:
Christina O’Quinn
Specialty Products Policy Section
Policy, Actuarial and Communications Division
Registered Plans Directorate
Legislative Policy and Regulatory Affairs Branch
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