RDSP Withdrawal Rules in Canada: LDAPs, DAPs and the Holdback
Updated
RDSP Withdrawal Basics
This page covers taking money out of a Registered Disability Savings Plan (RDSP): the two kinds of payment, the assistance holdback, withdrawal limits and tax. Eligibility, the grant and bond, and carry-forward are covered in the RDSP guide, and the RDSP calculator projects the balance available at a withdrawal age.
Feature
Details
Who requests a payment
The plan holder; payments go to the beneficiary (or, after death, the estate)
Depends on the plan type (see the withdrawal limits below)
Grant/bond repayment
May trigger holdback
The 10-Year Holdback Rule
When you withdraw from an RDSP, you may need to repay government grants and bonds received in the previous 10 years.
Assistance Holdback Amount (AHA)
Component
How It Works
Definition
Total grants + bonds from past 10 years
Repayment ratio
$3 repaid for every $1 withdrawn
Maximum repayment
AHA amount
Timing
Repaid from RDSP, not out-of-pocket
Example
Situation
Amount
Grants and bonds in the past 10 years (AHA)
$20,000
Withdrawal requested
$10,000
Repayment required ($3 per $1 withdrawn, or $30,000 before the cap)
$20,000 (capped at the AHA)
Paid to beneficiary
Full $10,000 requested
Total RDSP balance reduced by
$30,000 ($10,000 paid out + $20,000 repaid to government)
Holdback Exceptions
Exception
Result
Shortened life expectancy (SDSP election)
AHA waived as long as the taxable portion of the year’s withdrawals stays at or under $10,000
Waiting 10+ years after the last grant/bond
AHA drops to $0 for that withdrawal
Maximum Withdrawal Limits
LDAP Maximum Formula
Maximum LDAP = Fair Market Value of RDSP ÷ (83 − Age at start of year)
The 83 is 80 plus 3: once the beneficiary is 80 or older at the start of the year, the divisor stays at 3.
This formula is the hard cap only for a plan that is not “primarily government-assisted” (i.e., lifetime personal/family contributions exceed lifetime grants and bonds). If the plan is primarily government-assisted (grants and bonds exceed contributions, common for lower-income families), the maximum is instead the greater of this formula result or 10% of the RDSP’s fair market value, so the real cap can be significantly higher than the formula alone suggests.
The same formula also sets a floor: from the year the beneficiary turns 60, total payments for the year must be at least the formula amount (or what the plan’s assets allow).
Example LDAP Calculation
Factor
Value
RDSP value
$200,000
Beneficiary age
55
Formula
$200,000 ÷ (83 − 55)
Formula-based maximum
$7,143/year
If primarily government-assisted
Greater of $7,143 or 10% of $200,000 = $20,000/year
DAP Withdrawals
Situation
Limit
Primarily government-assisted plan
Total payments in a year capped at the greater of the LDAP formula or 10% of the plan’s value at the start of the year
Other plans
No annual maximum, but a DAP can’t leave the plan worth less than the assistance holdback amount
From the year the beneficiary turns 60
Total payments for the year must be at least the LDAP formula amount (or what the plan’s assets allow)
Tax Treatment of Withdrawals
Taxable Portion
Component
Tax Treatment
Government grants (CDSGs)
Taxable
Government bonds (CDSBs)
Taxable
Investment growth
Taxable
Your contributions
Tax-free (return of capital)
Withdrawal Ratio Formula
Each withdrawal includes a proportional mix of taxable and non-taxable amounts:
If RDSP Contains
Withdrawal Breakdown
60% grants/bonds/growth
60% taxable
40% contributions
40% non-taxable
This is a simplification. The exact tax-free share is your contributions not yet withdrawn divided by the plan’s value minus the assistance holdback amount, so a plan that still has a holdback gets a slightly larger tax-free share than the simple ratio suggests.
Whether your RDSP is “primarily government-assisted” (lifetime grants and bonds exceed lifetime personal contributions) or primarily funded by contributions changes your withdrawal limit, not whether the $3:$1 holdback repayment applies:
Capped each year at the greater of the LDAP formula or 10% of FMV
Primarily funded by contributions (contributions > grants/bonds)
No annual maximum on DAPs (a DAP can’t leave the plan worth less than the holdback amount); LDAPs are still capped by the LDAP formula
This status only affects how much you’re allowed to withdraw in a year. It does not exempt you from the 10-year holdback rule above: if you received grants or bonds in the past 10 years, withdrawing still triggers the $3:$1 repayment regardless of PGAP status.
Shortened Life Expectancy
If a medical doctor or nurse practitioner certifies the beneficiary is not likely to survive more than 5 years, the plan holder can formally elect Specified Disability Savings Plan (SDSP) status:
Feature
SDSP Rules
AHA repayment
Waived, as long as total taxable withdrawals for the year stay at or under $10,000 (or the LDAP formula amount if greater)
Withdrawal limits
Annual withdrawal maximum removed, subject to the $10,000 AHA-waiver threshold above
Trade-off
No further contributions, grants, or bonds can be added to the plan while it is an SDSP, and no grant or bond entitlement for those years can be carried forward
Documentation
Formal SDSP election plus a medical certificate
Because SDSP status stops new grants and bonds for as long as it lasts (the holder can end it by election), it tends to matter most once the beneficiary is close to or past the end of the year they turn 49, when grants and bonds stop anyway, or when the flexibility is worth more than the remaining matching room.
What Happens at Different Ages
Before Age 59
Action
Rules
DAP withdrawals
Allowed, subject to holdback
LDAPs
Not required yet; once started, they must be paid at least once a year
Contributions
Can continue until age 59
Grants
Available until age 49
Age 60
Requirement
Details
LDAPs must begin
By December 31 of year turning 60
Payment amount
Total payments for the year must be at least the LDAP formula amount (or what the plan’s assets allow); LDAPs alone can’t exceed it
Contributions
No more contributions allowed
After Death
Outcome
What Happens
Plan closes
Must close by December 31 of following year
Grants/bonds (past 10 years)
Repaid to government
Remaining funds
Paid to estate
Taxes
Taxable portion reported
Provincial Benefit Interaction
RDSP income is excluded from federal income-tested benefits, and most provinces fully exempt RDSP withdrawals from social assistance and disability benefits. Quebec, New Brunswick and Prince Edward Island exempt withdrawals only partly, so a large withdrawal there can reduce a provincial benefit. The RDSP guide covers how the plan interacts with other benefits.
Strategic Withdrawal Planning
Minimize Holdback Repayment
Strategy
How It Helps
Wait 10+ years after last grant
AHA will be $0
Withdraw gradually
Spread over multiple years
Tax Planning
Strategy
Benefit
Time withdrawals
Lower income years = lower tax
Coordinate with other income
Stay in lower brackets
Spread withdrawals
Avoid pushing into higher brackets
Step-by-Step: Making a Withdrawal
Process
Contact your RDSP provider (bank, credit union, broker)
Request withdrawal form: specify DAP or LDAP
Calculate holdback: the provider determines the AHA
Tax withholding: tax may be withheld at source
Receive payment: paid to the beneficiary
Documentation Needed
Document
Purpose
Withdrawal request form
Initiates process
Identity verification
Standard security
Medical certificate
If shortened life expectancy
Common Questions
Can I withdraw my original contributions tax-free?
Yes, but each withdrawal contains a proportional mix of contributions (not taxed) and grants/bonds/growth (taxed). You can’t choose to withdraw only your contributions.
What if I need emergency funds?
You can make a DAP withdrawal at any time, but:
May trigger AHA repayment
Taxable portion will be taxed
Could affect provincial disability benefits
Can someone else receive the payments?
Payments must go to the beneficiary. The holder or a legal representative may help manage funds if the beneficiary cannot.
RDSP vs RRSP Comparison
Feature
RDSP
RRSP
Contributions
After-tax
Tax-deductible
Withdrawals
Partially taxable
Fully taxable
Government matching
Yes (grants/bonds)
No
Withdrawal age
60 for LDAPs
71 mandatory
Holdback
Yes (10-year rule)
None
Key Takeaways
LDAPs must begin by end of year you turn 60
10-year holdback may require repaying recent grants/bonds
Only grants/bonds/growth are taxable; contributions returned tax-free
Strategic timing can minimize taxes and holdback
Shortened life expectancy provides more flexibility
The figures and rules on this page come from these sources, last checked against them between August 29, 2026 and September 17, 2026. How we check facts.