Disability Special Needs Planning

Current Costs for Cancer Alone

Special Needs Disability Financial and Estate Planning

Serious and Nagging Questions Faced by those Disabled/Caregivers or Parents of Children with Disabilities

  1. Who will care for me or my disabled child when I am no longer able to do so?
  2. Will my own medical needs and the catastrophic costs of long-term care deplete my assets so that little or nothing will be left for my disabled child?
  3. Can my child maintain eligibility for government benefits and services, housing subsidies and other need-based public supports?

Planning for the Disabled

Canadians are living longer than they did in years past, including those with disabilities. According to a recent Human Resource and Development Canada (HRDC), 4.4 million Canadians — one in seven — now has a disability, an increase from earlier this decade.  This figure does not include adult children with other disabilities and those who live separately, but still depend on their parents
for vital support.

When these parents can no longer care for their children due to their own disability or death, the responsibility will fall on siblings, other family members, and the community. In many cases, expenses will increase dramatically when care and guidance provided by parents must instead be provided by a professional for a fee.

Planning by parents can make all the difference in the life of a child with a disability as well as that of his or her siblings who may be left with
the responsibility for caregiving on top of their own careers and caring for their own families and, possibly, ailing parents.

Please review our Special Needs Planning Presentation


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The Registered Disability Savings Plan (RDSP) helps Canadians with disabilities and their families save for the future. If you are a Canadian resident under age 60 and are eligible for the Disability Tax Credit (Disability Amount), you are eligible for an RDSP. Earnings accumulate tax-free, until you take money out of your RDSP. Parents or guardians may open an RDSP for a minor. With written permission from the holder, anyone can contribute to the RDSP.

Once you open an RDSP, you may apply for the Canada Disability Savings Grant and Canada Disability Savings Bond. To learn more about how the RDSP works, see RDSP Overview.

Canada Disability Savings Grant

Through the Canada Disability Savings Grant, the Government deposits money into your RDSP to help you save. The Government provides matching grants of up to 300%, depending on the amount contributed and the Beneficiary’s Family Income. The maximum is $3,500 each year, with a limit of $70,000 over your lifetime.

Canada Disability Savings Bond

Through the Canada Disability Savings Bond, the Government deposits money into the RDSPs of low-income and modest-income Canadians. If you qualify for the bond, you could receive up to $1,000 a year from the Government, with a limit of $20,000 over your lifetime. Contributions do not need to be made to the RDSP in order to receive the bond.

Enhancements to the RDSP

As of January 2011, you are allowed to carry forward unused grant and bond entitlements for a 10-year period preceeding the opening of the plan. See Carry Forward Entitlements. As of July 2011, the proceeds from a deceased parent’s or grandparent’s Registered Retirement Savings Plan, Registered Retirement Income Fund and Registered Pension Plan can be rolled over into the RDSP of a financially dependent child or grandchild with a disability.

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Disability Insurance

A disability for you or a close family member such as a child will create new challenges for you and your family. Your lifestyle may be affected and you will want to ensure that challenges can be anticipated and dealt with as efficiently as possible. Your advisor can certainly help you in dealing with any financial pressures resulting from the disability and will also have further information about dealing with lifestyle challenges.

When meeting with your advisor consider asking the following questions:

  • What are the government sources of financial support for those who are disabled
  • Will my individual or group insurance cover me or a disabled child?
  • If I have to sell assets to raise money, how should I go about this?
  • What sort of services do the provincial or municipal governments provide to the disabled?
  • How will a disability affect my tax situation?
  • How should I plan for the welfare of my disabled child after I am gone?
  • How does a Registered Disability Savings Plan work?
  • How does my financial plan change if I become disabled?

Provincial Assistance

All the provinces and territories have established programs to assist the disabled. Every province and territory is different but some of the services provided are:

  • assisted living
  • transportation
  • child care
  • prescription drugs
  • finding employment
  • homecare

Here is a list of websites that should assist you in determining what provincial/territorial programs might be available for you.

Why you should have disability insurance
By Terri Williams

What would happen if you had an accident, became disabled and couldn’t work for a period of time – or ever again?

An accident for someone who doesn’t have disability insurance could be financially devastating. If you can’t work, how do you pay the bills? How long will your emergency fund last – if you have one? How far will you end up in debt to maintain your lifestyle, pay your debts and cover extra costs due to the accident.

Unfortunately, accidents are a part of life. According to Great West Life, one in three people on average will be disabled for 90 days or longer at least once before age 65. The average length of a disability that lasts over 90 days is 2.9 years.

Disability insurance helps you replace your income if you can’t work due to an accident. How much you will pay for disability insurance can vary depending on many different factors:

  • the amount of income you want – usually not more than two thirds of your annual income
  • when the income will kick in – one month or three months
  • how long the income will last – usually from two years up to the age 65
  • your occupation. The more dangerous your job, the higher the cost and limits on your coverage
  • the coverage you buy. “Own occupation” coverage provides you with benefits if you can’t work in your regular job, even if you can do another job. If you have “regular occupation” coverage, you typically receive your monthly benefit if you can’t perform your regular job. Your income must be reduced due to the disability. If you have “any occupation” coverage, you must be unable to perform the duties of any occupation. You must be completely unable to perform any job. Sometimes the terms can be adjusted to match your education level and experience, providing you with more flexibility.

It is important to speak to your financial advisor about ensuring you have enough disability insurance and the right coverage for your personal situation.

Terri Williams, CFP®, is Vice President, Editorial Services and Production for DundeeWealth Inc.

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