Example

Linda earned more than $90,563 in 2016 and is the sole provider for her spouse Paul, who is 40 years old. She starts contributing to his RDSP in 2016 and Linda contributes $10,000 annually to Paul's RDSP for 20 years. The contributions made are eligible for the grant at a rate of 100% of the contributions made in the particular year, up to a maximum of $1,000 annually. Paul is not eligible for the bond.

After 20 years, the fair market value (FMV) of the RDSP is $261,448. Since Paul will be 60 years old in 2036, the grant can be paid on the contributions from 2016 to 2025 (until he turns 49). Contributions can be made to the plan up until the end of the year in which Paul turns 59. No DAPs were made from the RDSP since the RDSP was set up.

Therefore, in 2036, the amount that Paul can receive is $10,893.67 calculated by the LDAP formula as follows:

$261,448 ÷ (80 + 3 − 59) + $0
$261,448 ÷ 24 = $10,893.67

The non-taxable portion of the lifetime disability assistance payments is $8,333.33 and is calculated by the second formula as follows:

$10,893.67 x $200,000 ÷ $261,448

Variable B is $200,000 because no disability assistance payments were made before 2036.

Variable C is $261,448 because no assistance holdback amount exists since the last grant was paid into the RDSP more than 10 years ago.