RDSP 10-Year Rule for Grants, Bonds and Withdrawals

Search for Registered Disability Savings Plan (RDSP) withdrawal rules and a good share of what comes up describes a version of the rule that stopped being true in 2014. The old version said any withdrawal from an RDSP triggered full repayment of every grant and bond paid into the plan over the prior decade, a punishing rule that made small withdrawals financially reckless. That’s not how it works anymore, and it hasn’t for over ten years, but the outdated version keeps circulating because it’s a simpler story to tell than what actually replaced it.

Since 2014, withdrawing from an RDSP triggers the proportional repayment rule, not full repayment. For every $1 withdrawn, $3 of grants and bonds paid into the plan in the prior 10 years must be repaid to the government, capped at whatever the total assistance holdback amount actually is. A $500 withdrawal, for example, triggers at most $1,500 in repayment, never the entire decade’s worth of government money at once.

What the Rule Actually Says Today

The mechanism the government uses to protect its own contributions is called the assistance holdback amount, or AHA. It’s calculated by adding up every dollar of Canada Disability Savings Grant (CDSG) and Canada Disability Savings Bond (CDSB) paid into the plan over the 10 years before whatever event triggers the calculation, then subtracting anything already repaid within that same window.

When a withdrawal happens, the proportional repayment rule kicks in specifically, requiring $3 of repayment for every $1 taken out, up to that AHA ceiling. It’s a genuine, dollar-for-dollar penalty on early access, just not the all-or-nothing version that made headlines when the program first launched.

What Counts as the Assistance Holdback Amount

The AHA isn’t a fixed number sitting somewhere on your statement. It moves every time a new grant or bond payment lands in the account and every time an old one ages past the 10-year mark. ESDC’s own technical definition describes it as the total CDSG and CDSB received in the trailing decade, minus whatever’s already been repaid in that same period, recalculated fresh whenever it matters.

That rolling structure means the AHA on a plan can shrink on its own over time, purely from grants and bonds aging out of the 10-year window, with no withdrawal required at all. A family that stopped contributing years ago and hasn’t touched the account may find their AHA considerably smaller today than it was five years back, simply because the oldest payments have fallen outside the repayment window.

Two Different Ten Year Rules on This Site

It’s worth being direct about a source of confusion that comes up constantly with this program. Our breakdown of grant and bond carry-forward also involves a rolling 10-year window, but that one governs collecting unused government money you’re entitled to. This page covers the opposite end, the risk of having to give some of that money back. Both windows happen to be 10 years long, both move forward as time passes, and that’s essentially where the similarity ends. Confusing the two is an easy mistake, and it’s worth keeping them mentally separate.

When Full Repayment Applies Instead of Proportional

The proportional rule only governs withdrawals specifically. A handful of other events still trigger repayment of the entire assistance holdback amount at once, with no 3-to-1 softening.

Closing the RDSP outright requires full AHA repayment. So does the plan losing its registered status through non-compliance, and so does the death of the beneficiary. Losing Disability Tax Credit (DTC) approval, on its own, doesn’t automatically trigger anything, according to ESDC’s technical guide for RDSP issuers, the AHA only becomes repayable if the plan is actually closed while the beneficiary is DTC-ineligible. A beneficiary whose DTC status lapses but who keeps the account open and doesn’t withdraw anything doesn’t trigger a repayment event from that lapse alone.

The Order Repayment Comes Out Of the Plan

When a repayment happens, whether proportional or full, the government doesn’t pick and choose which specific grant or bond payment to claw back. It works through the AHA in the same chronological order the payments originally arrived, oldest first, moving toward the most recent.

This mirrors the same oldest-first logic that governs the grant and bond carry-forward window on the way in, just running in the opposite direction. Money the government paid in longest ago is both the first to be recovered from unused entitlement and the first to be clawed back on repayment, a small but useful thing to understand if you’re trying to picture which specific payments a withdrawal is actually pulling from.

A Worked Example, Withdrawal Versus Closure

Picture a beneficiary who opened an RDSP and contributed $1,500 annually for six straight years, drawing the maximum $3,500 grant each year. By year six, the plan has received $21,000 in grants, none of it repaid yet, so the assistance holdback amount sits at $21,000.

If that beneficiary withdraws $600 in year six, the proportional rule applies. Three times $600 is $1,800, well under the $21,000 ceiling, so $1,800 gets repaid to the government and the remaining $19,200 of grant stays untouched in the plan. Compare that to what happens if, instead of a small withdrawal, the family closes the RDSP entirely that same year. Closure isn’t a withdrawal in the eyes of this rule, so the proportional cushion doesn’t apply. The full $21,000 assistance holdback amount comes due at once, a dramatically different outcome from the $1,800 a modest withdrawal would have triggered on the exact same account balance.

The Shortened Life Expectancy Exception

There’s one path that avoids this repayment structure almost entirely, and it exists specifically for beneficiaries facing a terminal or severely limiting diagnosis. When a licensed medical doctor or nurse practitioner certifies in writing that a beneficiary is unlikely to survive more than five years, the plan holder can elect to convert the RDSP into what’s called a Specified Disability Savings Plan (SDSP).

Withdrawals from an SDSP don’t trigger AHA repayment or the proportional rule, as long as the total taxable portion withdrawn in a year doesn’t exceed $10,000. That’s a meaningful trade for a family facing exactly the kind of circumstance where flexible access to savings held in the plan matters most. The cost of that flexibility is real, though. Once the SDSP election is made, no further contributions can go into the plan, and the beneficiary stops earning any new grant or bond entitlement for as long as the designation is active.

What Happens When the Beneficiary Dies

Even under an SDSP election, death changes the calculation entirely. Whether or not the shortened life expectancy provision was ever used, any grant or bond paid into the plan within the 10 years before the beneficiary’s death has to be repaid to the government at that point, with no proportional softening available. Whatever remains in the account after that repayment becomes part of the beneficiary’s estate.

This is worth knowing well before it becomes relevant, since it shapes how much of an RDSP’s balance a family can realistically count on passing through to other purposes versus what the government will recover first. Our separate piece on what happens to an RDSP when a beneficiary dies covers the estate side of that process in more depth than fits here.

Mistakes That Cost Families More Than Expected

The most common one is avoiding withdrawals altogether out of fear of the old, no-longer-accurate full-repayment rule, leaving money actually needed for disability-related expenses sitting untouched because of outdated information. A modest withdrawal against a plan with a large AHA is often far less costly than people assume once the proportional math actually gets run, a calculation ESDC walks through in detail for a range of scenarios.

The second is withdrawing right after a large carry-forward payout inflates the AHA, without checking how that timing affects the repayment exposure first. A plan that just received several years of backdated grant entitlement in one lump sum has a temporarily larger AHA than it did the year before, and a withdrawal made immediately afterward triggers a bigger proportional repayment than the same withdrawal would have a year earlier or later. And the third is assuming closing an underperforming or unnecessary plan works the same way a withdrawal does. It doesn’t, and the difference, as the worked example above shows, can run into thousands of dollars.

What to Do Before You Withdraw

Ask your RDSP provider for the current assistance holdback amount before making any withdrawal decision, since it’s not something most people can calculate accurately from memory or an old statement. Once you have that figure, multiply your planned withdrawal by three to see the proportional repayment exposure, and compare it against the AHA ceiling to confirm which number actually applies. If the timing is flexible, consider whether a recent carry-forward payout has temporarily inflated the AHA, since waiting even a year can change the math meaningfully. For questions specifically about how withdrawals get taxed rather than what triggers repayment, our guide to RDSP withdrawal taxes covers that separate piece of the puzzle.

A Few More Questions Worth Answering

Does the assistance holdback amount ever reach zero on its own? Yes. If 10 full years pass with no new grant or bond payments and no repayment events, every dollar that was part of the AHA eventually ages out of the rolling window, leaving nothing subject to repayment even without a single withdrawal being made.

Is the repaid amount taxed on top of being repaid? No. The repayment itself isn’t a taxable event, though the taxable portion of whatever you actually withdrew (as opposed to what gets sent back to the government) is still subject to the usual RDSP withdrawal tax rules.

Can I split a large withdrawal into smaller ones to reduce the repayment? Not meaningfully. The proportional rule applies per dollar withdrawn regardless of how the withdrawal is split across multiple transactions, so breaking one $2,000 withdrawal into four $500 withdrawals in the same year triggers the same total $6,000 in proportional repayment exposure either way.