Money Matters: Transcript of Lisa’s Live Chat
Each month, Lisa our Regional Coordinator for Interior BC hosts a live Q&A on our Facebook Page. During the chat, Lisa answers questions and encourages other people to add their ideas/answers and share resources.
Below is a transcript of the conversation broken down by question.
Q1—Okay, here is our first question. What is an RDSP and should I bother investing in one for our child?
Lisa: An RDSP is a Registered Disability Savings Plan. It was created just over 10 years ago I believe. It’s similar to an RESP but is for families that have kids with disabilities/diversabilities. Short answer, yes, it is worth it! If your loved one qualifies for the Disability Tax Credit they are eligible for an RDSP. To not start one is like saying “no” to free government money. You don’t need the autism diagnosis, just proof of the disability tax credit and a few other things. (Bring proof of disability tax credit eligibility, and the child’s and one parent’s SIN number (Original document, not copy). My go-to site for RDSPs: https://www.rdsp.com/
We realize that as a parent/caregiver to a child with a diversability you have a lot on your plate. What if you just can’t figure it out on your own? PLAN Institute can help you! https://planinstitute.ca/what-we-do/innovation/rdsp/. Disability Alliance BC is another great resource that will help walk you through the process—http://disabilityalliancebc.org/
I am by no means an expert when it comes to money matters (I’ve never even filed my own tax return lol). However, these are my top tips about RDSPs. Any errors are mine and I apologize in advance!
1) Do your due diligence, ask questions, look at statements, this is an important tool for your loved one and deserves some TLC.
2) Even if you can’t contribute much it will still grow. Around for a few years is a program called Endowment 150, that kick starts an individual’s RDSP at $150. Check out this link: https://www.rdsp.com/endowment-150/
3) RDSPs are for the long term, think even longer than an RESP (Registered Education Savings Plan). These are savings vehicles that are meant for when our loved one is well into adulthood. They are not meant to pay for that trip to Hawaii they want to go on. There are specific restrictions surrounding withdrawals from RDSPs and their timing. These organizations can help you to answer your questions! https://www.rdsp.com/ http://disabilityalliancebc.org/
DL: Autism BC there is a 10-year vesting period. The maximum contribution age is 49 to receive grants and bonds. Must start withdrawing at age 60. You can rollover an RESP into an RDSP and they are treated very differently.
Lisa: DL thank you! Lucky to have professional advice tonight on this live chat. (DL is a Financial Advisor for Edward Jones)
DL: It is absolutely worth it! It has been around for over 10 years. However, you can only go back 10 years to retroactively get the tax credits for it.
Lisa: Facebook Live Videos about RDSPs and taxes below:
Q2—MN: DL my daughter has an RESP and RDSP. Does this mean we can move money from her RESP to RDSP?
Lisa: MN I will message Debbie to see if she can email you.
Lisa: Hi Mandy, it’s Lisa Watson. I’m responding to your question the other night on the Live Chat. Regarding rolling RESPs into RDSPs I would contact Plan Institute or a professional and they can advise you. We still have both for our son even though we know that he won’t go to post-secondary. rdsp.com—Plan Institue, free advice and phone #. 🙂
Q3—Lisa: Let’s talk some more taxes…because tis’ the season! Thank you, C for this question about online resources related to taxes! As mentioned I’ve never actually done my own tax return but these are some tried and true resources that I would use if I did my own filing.
Autism Funding in BC is one of the best sites out there! Written by a parent and there is so much more than tax information on this site, find out about RDSPs, BC Funding, Federal Funding and more than money matters! You should bookmark this site!
DL: You can rollover RRSPs into an RDSP on a tax-deferred basis for a dependent adult child.
Lisa: DL thank you! Debbie also happens to be a financial advisor and knows what you can and can’t do! She’s also a fellow parent.
DL: Autism BC you’re welcome Lisa. I’ve also replied to a couple above. I got on late.
Lisa: Some useful government resources:
https://www.canada.ca/en/revenue-agency/services/child-family-benefits/child-disability-benefit.html (Child Disability Benefit)
https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/canada-caregiver-amount.html#what_is_CCC (Caregiver Credit)
Q4—Another question, thank you Q! Does the DTC (Disability Tax Credit) last forever or does it expire?
Lisa: Great question, thank you Q! When you or your loved one qualifies for the DTC there will be a date listed on your paperwork or your online CRA account stating the expiry. For example, our son was diagnosed at 3, and the DTC said it was good for 5 years. Well, guess what? 5 years later and he was still autistic. We applied again and had no issues getting it renewed. It is now expiring when he becomes an adult. However, that is not always the case! We posted a great story earlier this month about the Doughty family. They had the DTC but when their son turned 11 the CRA asked for a re-assessment and denied their application. What you may ask? See below for what followed…
How did you go about appealing the decision we asked the Doughty’s. “We had our GP fill out the DTC form three times. They were in the process of changing the forms at the time so we tried both versions of the form. All three times came with the same letter from CRA that more information was needed. We finally decided to have a psychologist fill out the form. She gave a very detailed account of our son and his challenges. The cost was $250 but it was approved after they received the letter from her.”
Q5—T: Any resources you would recommend to someone who has been denied the DTC?
Lisa: Yes! Check out this Facebook group: https://www.facebook.com/search/top/?q=disability%20tax%20credit%20and%20rdsp%20(canadians%20only)&epa=SEARCH_BOX (Disability tax credit and RDSP (Canadians only)
Some other tips:
1) Get the DTC if you can!
2) You can backdate the DTC up to 10 years, it is worth trying to backdate.
3) See if your doctor will backdate to birth or when symptoms arose.
4) Consult a professional.
5) DON’T PAY AN AGENCY THAT WILL TAKE A CUT OF YOUR DTC CREDIT IF APPROVED.
Q6—Here’s another question, thank you L!
“When and who do I let know that my son with ASD has recently moved into his dad’s place but I’ve been the one receiving child disability tax credits?”
Lisa: You may want to join this Facebook group: disability tax credit and RDSP (Canadians only) https://www.facebook.com/groups/disabilitytaxcredit/. You can search for previous topics. I did a search for DTC and who can claim it and there is a thread about changing which caregiver claims it. I would also encourage you to call Disability Alliance BC as they provide free (and professional) tax advice for families that have kids with diversabilites. http://disabilityalliancebc.org/
Autism BC: Let’s talk books! Did you know that Autism BC has a free lending library and we will ship books for free throughout the province (there and back)? Here are two books you should definitely check out, this first one is available to download for free. Attainment’s Explore Budgeting Introductory Kit by Attainment Co. (2012). Also, Plan Institute’s Safe and Secure downloadable book, the go-to for financial planning for your loved one. https://planinstitute.ca/learning-centre/publications/safe-and-secure/
Q7—Final tips about what to do if you are denied the DTC?
1) Flood them with information, reports and assessments.
2) Include all your daily challenges.
3) Access your elected Member of Parliament.
4) People often don’t realize that the DTC approval is not about the label, it is about how the disability impacts the caregivers and the child/to what degree the child’s disability requires additional support beyond what is expected of a “typical” child their age, especially around daily functioning.
5) It is important to address what occurs at home or out in the community, not only what occurs in a work or school environment.
Lisa: Thanks everyone for engaging tonight! We are finishing out our Money Matters theme at the end of the week and Dave Taylor will be talking about Money Matters on our Facebook Live on Feb 27th at 10:30 (video, not text chat). Link to the event is here: https://www.facebook.com/events/236463654042686/
He is a parent and a wealth of information! If you can’t tune in live it will be here on our Facebook page…..forever! 😊Thank you, Dave Taylor, for volunteering to take part in this Facebook live on Thursday.
If you are more tech-savvy and prefer podcasts, here is one that may pique your interest. https://omny.fm/shows/life-on-the-spectrum/autism-and-your-family-finances
Here are some final tips about applying for the DTC (the first or second or third time). Imagine yours or your child’s worst day when filling out the form.
Having the DTC will be an amazing asset as he/she grows into adulthood – savings e.g. RDSP (which you need the DTC to receive) access to special rates for housing even if he wants to one day build/buy his/her own home – just to name a few.
You need the DTC to qualify for PWD (persons with disabilities) when you reach adulthood.
Reassessment happens again at age 19 when the individual becomes an adult under the law and a resubmission of the T2201 – Disability Tax Credit is required. (IS THIS CORRECT?) I think we should remove this as I’m not totally sure but think it is right lol.
The Disability Tax credit is not based on having a diagnosis, it’s the extent to which that diagnosis affects your ability to perform functions, independently, that are necessary for everyday life. The key I found is to have a doctor (or psychologist) who is very familiar with Autism, including the fact that higher functioning does not equate to lower needs. Often CRA will send a “follow up questionnaire” to the doctor. It’s important to anticipate that and ask your doctor to call you back into the office to get your input in completing it. For example, one question on the follow-up form was something like: “Does your patient have the ability to communicate to be understood, and understand others?” Anyone having a brief conversation with my child would have said: “of course he can”. However, my doctor said he was going to answer the question using the broadest sense of the word “communicate.” Communication includes reading body language, understanding nuanced conversation, understanding idioms, sarcasm, and putting that together with knowledge of the person and doing so often with background noise, anxiety and sensory issues, etc. Now suddenly the answer to that question becomes “no. I think this information came from one of my questions, not sure if this should be in here or not as may be subjective?
Q8—CC: Can we backdate all the money that we pay the BI?
Autism BC: Hi Carmen, thanks for your question. Can you clarify? Do you mean you hired a BI before an autism diagnosis and autism funding was granted?
CC: No, my son got diagnosed at the age of 2.5, and he is 16 now. So we have been having BI (services).
Autism BC: CC do you mean can you deduct the BI on your taxes? If you are using your autism funding to pay for the BI you can not use that as a tax deduction as you aren’t paying out of pocket. If you are paying above and beyond the autism funding then I would check with an accountant about if you can claim it perhaps as childcare or medical expenses. You can also contact http://disabilityalliancebc.org/ and they provide free tax information.
DL: Thanks Lisa for hosting this!
Lisa: Thanks Debbie for helping me along. Debbie is a financial advisor in Penticton BC with Edward Jones.
Q9—CC: For the money that we pay the BI, should we claim them under medical expenses in our income tax?
Lisa: Definitely check with who does your taxes. If you are paying out of pocket there is a good chance you will be able to deduct some of the costs. Again http://disabilityalliancebc.org/ should be able to answer this question.