Simply because you make a contribution to an RDSP account, does not mean you will get the government contributions you expect.

RDSP accounts are complex and the government doesn’t make it easy for you.  There are a number of reasons why expected government contributions don’t come in.  Many people make a contribution but don’t think to check the corresponding government contributions for accuracy.  You can’t simply assume the government will send what you expect.  Here is what you need to do.

• The first step is calculating the expected amount of RDSP Grant and Bond contributions, which is based on the amount you personally contribute and “family income”.  The Canada Revenue Agency’s webpage outlines the calculations.

• You also have to account for any previous years for which you didn’t contribute but were eligible for government contributions.  Accounting for missed years gets a bit more complex.  Click here for an explanation on how retroactive contributions are calculated.

• Once you know how much you should have received from the government, you either need to check the account statements you receive in the mail from your financial institution, check your account on-line (if you have access), or call your financial institution to determine the amount you have received from the government.

• If you have not received the correct amount of Grant or Bond contributions, your financial institution may not know why.  Due to privacy issues, the government can only share so much with the financial institution.  If there is an issue with the Disability Tax Credit, the government will tell the financial institution there is an issue, but they will not disclose more than that.

• If you want to know the exact reason, you need to call the government at 1.800.959.1953.  If the beneficiary is a minor, the parents can call.  If the beneficiary is an adult, the beneficiary has to call unless the parent has authorization to contact CRA on their behalf.  To read more about securing authorization, click here.

• Before you go through the hassle of calling CRA, you may want to check the following first:

  • Is the beneficiary’s name on the account spelled exactly as it appears on her SIN card?  It must be exact.  If the name on the account doesn’t match, government contributions will not be received.

  • Is the beneficiary’s date of birth correct?

  • Is the Disability Tax Credit Certificate still valid? While some people have a permanent Disability Tax Credit Certificate, many people have to renew theirs every few years.

  • Have taxes been filed?  Tax returns need to be completed for the beneficiary starting for the year they turn 17 years of age and every year after that.  For every year previous to that, the parents need to file their taxes.  For any given year, the government looks at “family income” from two years previous to determine Grant and Bond contributions.  For example, to calculate Grant and Bond contributions for 2012, you need to look at the family income earned in 2010.  If taxes have not been filed, Bond contributions will not be provided and Grant contributions will be or more than $1,000 per year for the missing years.

There are other factors that can affect government contributions, but the list above are some of the main ones.

Do not expect your financial institution to take the bull by the horns.  You may receive a letter from them, stating there is an issue with the Disability Tax Credit eligibility, but that is far as they will likely go.  Unless you have a financial advisor who understands how the RDSP works, you will have to be the one grabbing the horns on that bull.