Registered Disability Savings Plans for Group Home Residents

1. Registered Disability Savings Plans for Group Home Residents Presented by Wendy Howick Larman Community Living St. Catharines

2. What is an RDSP • A long-term savings plan for individuals with disabilities administered by the federal government (HRSDC) The individual must be under the age of 50 at the time the plan is established The disabled person is called the “beneficiary” of the plan The following website gives a detailed description of the plan and its benefits: http://www.hrsdc.gc.ca/eng/disability_issues/disability_savings/index.shtml

3. Who is eligible to be a beneficiary • Canada Revenue Agency determines who is eligible • A Disability Tax Credit Certificate (Form T2201) must be completed by the individual’s medical practitioner • The Disability Tax Credit is then submitted to Canada Revenue Agency who can approve or reject the application • The DTC application can be obtained at CRA’s website: http://www.cra-arc.gc.ca/E/pbg/tf/t2201/README.html The medical practitioner may charge a fee to complete the form – the fees may be avoided in some cases if the form is brought in with a regularly scheduled doctors’ appointment.

4. How you can find out if the individual already has a DTC • Canada Revenue Agency will only co-operate with third parties if they have an authorization from the individual for that person to represent them – on Form T1013 • Form T1013 can be obtained from CRA’s website http://www.cra-arc.gc.ca/E/pbg/tf/t1013/README.html The form should be signed by the individual we support, initialed by a witness, and submitted to your taxation centre. When the form is received by CRA, they will discuss the individual’s status by telephone or letter – but have a copy of their last year’s income tax return or notice of assessment when you call because you will be asked questions about it to prove your identity (examples- date of birth and mailing address of the individual, the balance on a specific line of the return, or the method in which the last year’s return was filed (ie. electronically or by mail)

5. Who can be the Holder of the Plan • The holder is the person who administers the plan. Canada Revenue Agency regulates who is eligible to be a holder, so this site should be visited to review the rules: http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/rdsp-reei/pln-eng.html • It can be the beneficiary if he or she is capable of entering into a contract, or a parent if the beneficiary is a minor • If the beneficiary is not capable of entering into a contract, the holder can be a “qualified person”

6. Qualified person • a guardian, tutor, or curator of the beneficiary, or an individual who is legally authorized to act for the beneficiary; or • a public department, agency, or institution that is legally authorized to act for the beneficiary • Each province has its own rules on legal authorization, and Canada Revenue Agency allows the provinces to make the determination

7. Who is legally authorized to act as a representative in Ontario? • Power of attorney - a person who is not able to enter into a contract may also not be able to appoint a Power of Attorney • Legal guardian appointed by the Ontario Trustee Office • The Royal Bank has accepted the “Appointment of Trustee Form” issued by the Ontario Disability Supports Program if the appointment form names the agency as the trustee- this enables the agency to become the holder of the plan

8. Paperwork to provide to bank • A Letter of Direction signed by your executive director appointing a specific employee (or employees) to administer the plan • An indemnity signed by the employee designated in the letter of direction and sufficient officers with authority to bind the corporation • You do not need to bring the Disability Tax Credit approval to the bank – but the application will be rejected when the bank submits it to CRA if the certificate has not been approved

9. Letter of Direction • Letter of Direction • Insert Your Company Name • Insert Your Address • Insert City, Insert Province • Insert Postal Code • Date: • RBC • Branch Manager • Dear Sir or Madame: • On behalf of [Company Name],we request that you open a registered disability savings plan (the “Plan”) for [name of client], the individual named on the Appointment of Trustee document dated ___________, attached herewith. We also attach an indemnity dated _________________ , for and in favour of Royal Bank of Canada (“RBC”), that is duly executed by ourselves and acknowledged by [name of caregiver(s)], our designated employee(s) who will be operating the Account on behalf of [name of client with a physical condition]. • The Account will be operated in accordance with RBC’s standard Client Agreement – Registered Disability Savings Plans subject to such modifications as may be agreed to, and accepted by RBC. • Signing authority for the Account is to be established as follows: • [ ] Any two to sign • [ ] All to sign • [ ] Any one to sign • We acknowledge our duty to maintain and operate the Account at all times in a manner that is in the best interests of [name of client] • Yours truly,

10. Indemnity • INDEMNITY • WHEREAS [name of corporation] has been appointed on ________________ by the Director/Administrator of the Ontario Disability Support Program, pursuant to the Ontario Disability Support Programs Act, 1997 (the “Appointment of Trustee”),as trustee to act for [client name] (the “Client”) and to receive and administer the monies paid out pursuant to the Family Benefits Act, Ontario Disability Support Programs Act, 1997 and/or Ontario Works Act, 1997, as the case may be, for the benefit of the Client; • AND WHEREAS[name of corporation] wishes to establish a registered disability savings plan with [client name] as beneficiary and deposit monies pursuant to such Appointment of Trustee into the plan (the “Plan”) maintained with Royal Bank of Canada (“RBC”) in the name of the Client, but under the administration of [name of corporation] who is empowered and authorized pursuant to the Appointment of Trustee to withdraw and disburse monies from the Plan for the sole benefit of the Client; • NOW THEREFORE for valuable consideration (the receipt and sufficiency whereof is hereby acknowledged) [name of corporation] hereby agrees to pay, indemnify and hold harmless RBC, its directors, officers, employees, agents, successors, assigns and associated entities (collectively, the “Indemnified Persons”) from and against any and all loss, liability, obligations, actions, causes of action, claims, damages, statutory rights or remedies, complaints, demands, costs and expenses incurred by it with respect to, or in any way arising from, the Account and/or the maintenance or operation thereof with RBC and/or the deposit and/or withdrawal or disbursement of monies to and from the Account from time to time or at any time. • [name of corporation] has the power, capacity and authority to provide this Indemnity. This Indemnity is and shall be binding upon [name of corporation] and its successors and assigns and shall enure to the benefit of the successors and assigns of the Indemnified Persons. • IN WITNESS WHEREOF, [name of corporation] has executed this Indemnity as of ______________, 2011. • [name of corporation] I, We[name of designated employee(s)] have been designatedby [name of corporation]to act on its behalf • Relative to the Appointment of Trustee for [client name] • Per: ____________________ I have read and understand the terms and conditions set forth in this Indemnity • Per: ____________________ . • I/We have authority to bind the corporation. • _______________________ • _______________________

11. RBC’s Process • RBC has financial planners on staff who are familiar with the process of setting up an RDSP- you will be directed to such a person when you contact RBC • Advise the planner that you have a letter of direction and indemnity and will be setting up an account with your agency as the holder of the plan. The employee designated by the letter of direction should arrive at the meeting to set up the plan with the appropriate paperwork. You should have the beneficiary’s social insurance number, address and date of birth for each plan you wish to establish. • RBC will set up a single client number for the agency’s RDSP’s – and each new account will be opened with that number as the identification. If you already have an RBC account, they need to open a new one for the RDSP’s. • I set up a single RDSP in my test case, but will do the rest of them in batches for which I will provide all of the information before the appointment to set them up. The bank is happy to process the applications one at a time, but would likely be happier if we can facilitate the process.

12. Other good news about RDSP’s • All individuals eligible to set up an account will be able to apply for bonds (with no contribution necessary) and grants (if contributions are made) for 2008-2010 in the new carry-back provisions • RDSP’s do not affect the individual’s ODSP -even when withdrawals are made from the plan

13. Do the math- FREE MONEY • All group home residents should be eligible for bonds of $1,000 – DONATED by the federal government for each year starting in 2008 and extending to (and including) the year they turn 49 – WITH NO CONTRIBUTION REQUIRED– to a maximum of $ 20,000 EACH • Any contributions of up to $ 500 to the plan will earn a federal RDSP grant of triple the contribution • Any additional contributions of up to $ 1,000 will earn a federal RDSP grant of double the contribution

14. Involve the Families • Families of group home residents may have already set up RDSP’s – but others may have encountered difficulties in meeting the criteria as a holder of the plan • Families should be consulted before setting up the plans so they are able to consider the role your agency could play • Families may already have savings or trusts which can be transferred to the plan to earn grants

15. The Future of the Plan • The bonds and grants must be left in the plan for at least ten years or must be repaid • The bonds, grants and income earned are taxed in the hands of the beneficiary when they are withdrawn (usually at no tax cost if it is done in a planful manner) • The plan becomes part of the individual’s estate when he or she dies • Policies should be established and discussed with families to determine how the withdrawals will be used