Law:Canada Disability Savings Act

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S.c. 2007, c. 35, s. 136

Assented to 2007-12-14

An Act to encourage savings for persons with disabilities

(Enacted by section 136 of chapter 35 of the Statutes of Canada, 2007, in force December 1, 2008, see Si/2008-63.)


Contents

Short Title

Short title

1. This Act may be cited as the Canada Disability Savings Act.


Interpretation

Definitions

2. (1) The following definitions apply in this Act.

“Canada Disability Savings Bond”

« bon canadien pour l’épargne-invalidité »

“Canada Disability Savings Bond” means the bond payable or paid under section 7.

“Canada Disability Savings Grant”

« subvention canadienne pour l’épargne-invalidité »

“Canada Disability Savings Grant” means the grant payable or paid under section 6.

“child tax benefit”

« prestation fiscale pour enfants »

“child tax benefit” means a deemed overpayment under Subdivision a.1 of Division E of Part 1 of the Income Tax Act.

“contribution”(Repealed, 2010, c. 12, s. 26)

“family income”

« revenu familial »

“family income” means the income determined by the Minister in accordance with the definition “adjusted income” in section 122.6 of the Income Tax Act by using the information provided by the Minister of National Revenue for that purpose.

“first threshold”

« premier seuil »

“first threshold” for a particular year means the dollar amount referred to in paragraph 117(2)(a) of the Income Tax Act, as adjusted under that Act for the particular year.

“phase-out income”

« revenu de transition »

“phase-out income” for a particular year means the amount determined by the formula

A – (B/0.122)

where

A�is the first threshold for the particular year, andB�is the amount referred to in paragraph (a) of the description of F in subsection 122.61(1) of the Income Tax Act, as adjusted under that Act for the particular year.“second threshold”

« deuxième seuil »

“second threshold”spa for a particular year means the higher dollar amount referred to in paragraph 117(2)(b) of the Income Tax Act, as adjusted under the Act for the particular year.

Income Tax Act expressions

(2) Unless a contrary intention appears, in this Act

(a) the expressions “adjusted income”, “eligible individual” and “qualified dependant” have the same meanings as in section 122.6 of the Income Tax Act;

(b) the expressions “contribution”, “designated provincial program”, “DTC-eligible individual”, “holder”, “issuer” and “registered disability savings plan” have the same meanings as in section 146.4 of that Act; and

(c) any other expression has the same meaning as in that Act.

2007, c. 35, s. 136 “2”; 2010, c. 12, s. 26, c. 25, s. 166.

Previous Version

Purpose

Purpose

3. The purpose of this Act is to encourage long term savings through registered disability savings plans to provide for the financial security of persons with severe and prolonged impairments in physical or mental functions.


Minister

Designation of Minister

4. The Governor in Council may, by order, designate a minister of the Crown to be “the Minister” for the purposes of this Act.

Informing Canadians

5. The Minister may take any measures that the Minister considers appropriate to make known to Canadians the existence of Canada Disability Savings Grants and Canada Disability Savings Bonds.


Payments

Canada Disability Savings Grants

6. (1) Subject to this Act and the regulations, on application, the Minister may, in respect of any contribution made to a registered disability savings plan of a beneficiary, pay a Canada Disability Savings Grant into the plan. The grant is to be paid on any terms and conditions that the Minister may specify by agreement between the Minister and the issuer of the plan.

Amount of grant

(2) The amount of a Canada Disability Savings Grant that may be paid for a particular year is equal to

(a) 300% of the part of the total contributions made in the particular year that is less than or equal to $500, and 200% of the part of those contributions that is more than $500 but less than or equal to $1,500, if the beneficiary is

(i) an individual who is at least 18 years of age on December 31 of the year preceding the particular year and whose family income for the particular year is less than or equal to the second threshold for the particular year,

(ii) a qualified dependant of an eligible individual whose adjusted income used to determine the amount of a child tax benefit in respect of January in the particular year is less than or equal to the second threshold for the particular year, or

(iii) a person in respect of whom a special allowance under the Children’s Special Allowances Act is payable for at least one month in the particular year; or

(b) 100% of the total contributions made in the particular year, up to a maximum of $1,000, in any other case.

Deemed year of contribution

(2.1) For the purposes of subsection (2), a contribution allocated to a year under subsection (2.2) is deemed to have been made in that year.

Allocation of contribution

(2.2) The Minister may allocate a contribution made to the beneficiary’s registered disability savings plan in a year after 2010, in parts — to the year in which it is actually made and to each of the previous 10 years that is after 2007 — in the following order:

(a) up to $500 to each year in which the beneficiary is one referred to in paragraph (2)(a), beginning with the earliest year, less any contributions allocated to the year in question;

(b) up to $1500 to each year in which the beneficiary is one referred to in paragraph (2)(a), beginning with the earliest year, less any contributions allocated to the year in question including those so allocated under paragraph (a); and

(c) up to $1000 to each year in which the beneficiary is not one referred to in paragraph (2)(a), beginning with the earliest year, less any contributions allocated to the year in question.

Residency and DTC-eligibility

(2.3) No contribution made to the plan in a year may be allocated to a previous year unless, during that previous year, the beneficiary was resident in Canada and a DTC-eligible individual.

Limit

(2.4) The Minister may allocate only the portion of contributions made to the plan in a year in respect of which, in accordance with subsection (2), a Canada Disability Savings Grant of up to $10,500 may be paid into the plan in that year.

Contributions made before 2011

(2.5) For the purposes of determining the contributions allocated to the year in question under any of paragraphs (2.2)(a) to (c), contributions made to the plan in 2008, 2009 or 2010 are considered to have been allocated to the year in which they were actually made.

Family income

(3) For the purposes of subparagraph (2)(a)(i), the family income for a particular year is that income determined for the year that ended on December 31 of the second preceding year.

No determination for January

(4) If there has been no determination of eligibility for a child tax benefit in respect of January in a particular year, the adjusted income to be used for the purposes of subparagraph (2)(a)(ii) is the adjusted income used to determine the amount of a child tax benefit for the first month in the particular year in respect of which eligibility has been established.

Beneficiary born in December

(5) In applying subsection (4) in respect of a beneficiary born in December, the reference to “the first month in the particular year in respect of which eligibility has been established” in that subsection is to be read as a reference to “January of the next year”.

(6)�(Repealed, 2010, c. 12, s. 27)

Lifetime cap

(7) Not more than $70,000 in Canada Disability Savings Grants may be paid in respect of a beneficiary during their lifetime.

Annual cap

(8) Not more than $10,500 in Canada Disability Savings Grants may be paid in respect of a beneficiary in a year.

Annual statement to plan holders

(9) Once a year, the Minister shall cause each holder of a registered disability savings plan to be provided with a statement that sets out the amount of Canada Disability Savings Grants that may be paid for particular years on the basis of future contributions.

2007, c. 35, s. 136 “6”; 2010, c. 12, s. 27, c. 25, s. 167.

Previous VersionCanada Disability Savings Bonds

7. (1) Subject to this Act and the regulations, on application, the Minister may pay a Canada Disability Savings Bond into a registered disability savings plan of a beneficiary

(a) for each year after the year in which the plan is entered into; and

(b) for the year in which the plan is entered into and for each of the previous 10 years

(i) that is after 2007,

(ii) during which the beneficiary was resident in Canada, and

(iii) for which a Canada Disability Savings Bond has not previously been paid.

Terms and conditions

(1.1) A Canada Disability Savings Bond is to be paid on any terms and conditions that the Minister may specify by agreement between the Minister and the issuer of the plan.

Amount of bond

(2) The amount of a Canada Disability Savings Bond that may be paid for a particular year is

(a) $1,000, if the beneficiary is

(i) an individual who is at least 18 years of age on December 31 of the year preceding the particular year and whose family income for the particular year is less than or equal to the phase-out income for the particular year,

(ii) a qualified dependant of an eligible individual whose adjusted income used to determine the amount of a child tax benefit in respect of January in the particular year is less than or equal to the phase-out income for the particular year, or

(iii) a person in respect of whom a special allowance under the Children’s Special Allowances Act is payable for at least one month in the particular year; or

(b) the amount determined by the formula set out in subsection (4), if the beneficiary is

(i) an individual who is at least 18 years of age on December 31 of the year preceding the particular year and whose family income for the particular year is more than the phase-out income for the particular year but less than the first threshold for the particular year, or

(ii) a qualified dependant of an eligible individual whose adjusted income used to determine the amount of a child tax benefit in respect of January in the particular year is more than the phase-out income for the particular year but less than the first threshold for the particular year.

Family income

(3) For the purposes of subparagraphs (2)(a)(i) and (b)(i), the family income for a particular year is that income determined for the year that ended on December 31 of the second preceding year.

Formula

(4) For the purposes of paragraph (2)(b), the formula is as follows:

$1,000 - ($1,000 × (a - B) / (c - B))

where

A�is, as the case may be, the family income referred to in subparagraph (2)(b)(i) or the adjusted income referred to in subparagraph (2)(b)(ii);B�is the phase-out income for the particular year; andC�is the first threshold for the particular year.Rounding of amounts

(5) If an amount calculated under subsection (4) contains a fraction of a cent, the amount is to be ronded to the nearest whole cent or, if the amount is equidistant from two whole cents, to the higher of them.

No determination for January

(6) If there has been no determination of eligibility for a child tax benefit in respect of January in a particular year, the adjusted income to be used for the purposes of subparagraphs (2)(a)(ii) and (b)(ii) is the adjusted income used to determine the amount of a child tax benefit for the first month in the particular year in respect of which eligibility has been established.

Beneficiary born in December

(7) In applying subsection (6) in respect of a beneficiary born in December, the reference to “the first month in the particular year in respect of which eligibility has been established” in that subsection is to be read as a reference to “January of the next year”.

(8)�(Repealed, 2010, c. 12, s. 28)

Lifetime cap

(9) Not more than $20,000 in Canada Disability Savings Bonds may be paid in respect of a beneficiary during their lifetime.

2007, c. 35, s. 136 “7”; 2010, c. 12, s. 28, c. 25, s. 168.

Previous VersionPayment

8. Neither a Canada Disability Savings Grant nor a Canada Disability Savings Bond may be paid unless

(a) the Minister is provided with, as the case may be,

(i) the Social Insurance Number of the beneficiary,

(ii) the Social Insurance Number of the eligible individual referred to in subparagraph 6(2)(a)(ii) or 7(2)(a)(ii) or (b)(ii), and

(iii) the business number of the department, agency or institution that maintains the beneficiary in respect of whom a special allowance is payable under the Children’s Special Allowances Act for a month in the particular year; and

(b) the beneficiary is resident in Canada, in the case of a Canada Disability Savings Grant, at the time the contribution to the plan is made and, in the case of a Canada Disability Savings Bond, immediately before the payment is made.

Interest

9. The Minister may, in prescribed circumstances, pay interest, calculated as prescribed, in respect of Canada Disability Savings Grants or Canada Disability Savings Bonds.

Payments out of CRF

10. All amounts payable by the Minister under this Act shall be paid out of the Consolidated Revenue Fund.

Waiver

11. On application made by the holder or the beneficiary, to avoid undue hardship, the Minister may, in prescribed circumstances, waive any of the prescribed requirements of this Act or the regulations that relate to the payment of any amount or the repayment of any amount or earnings generated by that amount. The application must be in the form and manner approved by the Minister.


General

Debt due to Her Majesty

12. (1) An amount required to be repaid under this Act, the regulations or an agreement entered into under this Act constitutes a debt due to Her Majesty in right of Canada as of the date on which the Minister issues a written notice to the person responsible for the debt indicating the amount that is due.

Recovery of payments and interest

(2) Debts due to Her Majesty in right of Canada under this Act are recoverable, including in the Federal Court or any other court of competent jurisdiction, by the Minister of National Revenue.

Deduction and set-off

(3) Despite subsection 14(1), debts due to Her Majesty in right of Canada under this Act may be recovered at any time by way of deduction from, set-off against or, in Quebec, compensation against, any sum of money that may be due or payable by Her Majesty in right of Canada to the person responsible for the debt, other than an amount payable under section 122.61 of the Income Tax Act.

Deduction and set-off by the Minister

13. Despite subsections 12(2) and 14(1), an amount required to be repaid by a person under this Act, the regulations or an agreement entered into under this Act may be recovered by the Minister at any time by way of deduction from, set-off against or, in Quebec, compensation against, any sum of money that may be due or payable under this Act to the person.

Limitation or prescription period

14. (1) Subject to this section, no action or proceedings shall be taken to recover debts due to Her Majesty in right of Canada under this Act after the expiry of the six-year limitation or prescription period that begins on the day on which the Minister issues the notice referred to in subsection 12(1).

Acknowledgement of liability

(2) If a person’s liability for debts due to Her Majesty in right of Canada under this Act is acknowledged in accordance with subsection (4), the time during which the limitation or prescription period has run before the acknowledgement does not count in the calculation of that period.

Acknowledgement after expiry of limitation or prescription period

(3) If a person’s liability for debts due to Her Majesty in right of Canada under this Act is acknowledged in accordance with subsection (4) after the expiry of the limitation or prescription period, an action or proceedings to recover the money may, subject to subsections (2) and (5), be brought within six years after the date of the acknowledgement.

Types of acknowledgements

(4) An acknowledgement of liability means

(a) a written promise to pay the money owing, signed by the person or his or her agent or other representative;

(b) a written acknowledgement of the money owing, signed by the person or his or her agent or other representative, whether or not a promise to pay can be implied from it and whether or not it contains a refusal to pay;

(c) a part payment by the person or his or her agent or other representative of any money owing; or

(d) any acknowledgement of the money owing made by the person, his or her agent or other representative or the trustee or director in the course of proceedings under the Bankruptcy and Insolvency Act or any other legislation dealing with the payment of debts.

Limitation or prescription period suspended

(5) The running of a limitation or prescription period is suspended during

(a) the period beginning on the day on which the Minister receives an application under section 11 and ending on the day on which the Minister issues a decision;

(b) the period beginning on the day on which the Minister of National Revenue receives an application concerning subsection 146.4(12) of the Income Tax Act and ending on the day on which that Minister makes a decision;

(c) the period beginning on the day on which an application for judicial review, with respect to a decision of the Minister to issue a notice under subsection 12(1), is filed and ending on the day on which the final decision is rendered; and

(d) any period in which it is prohibited to commence or continue an action or other proceedings against the person to recover debts due to Her Majesty in right of Canada under this Act.

Enforcement proceedings

(6) This section does not apply in respect of an action or proceedings relating to the execution, renewal or enforcement of a judgment.

Collection of information

15. If the Minister considers it advisable, the Minister may, subject to conditions agreed on by the Minister and the Minister of National Revenue, collect any prescribed information for the administration of section 146.4 and Part XI of the Income Tax Act.

Notification by Minister of National Revenue

16. When the Minister of National Revenue considers that a registered disability savings plan is no longer registered by virtue of the application of paragraph 146.4(10)(a) of the Income Tax Act, the Minister of National Revenue shall as soon as possible notify the Minister in writing.

Regulations

17. The Governor in Council may make regulations for carrying out the purpose and provisions of this Act and, without limiting the generality of the foregoing, may make regulations

(a) establishing requirements that must be met by a registered disability savings plan and by persons in respect of the plan before a Canada Disability Savings Grant or a Canada Disability Savings Bond may be paid in respect of the plan;

(b) establishing the manner of determining the amount of a Canada Disability Savings Grant that may be paid in respect of contributions made to registered disability savings plans or the amount of a Canada Disability Savings Bond that may be paid into those plans;

(c) specifying terms and conditions to be included in agreements entered into between an issuer of a registered disability savings plan and the Minister;

(d) governing the repayment of any amount paid under this Act or earnings generated by those amounts including providing for the circumstances under which an amount or earnings must be repaid and the manner of calculating such an amount or earnings;

(e) specifying the circumstances in which the Minister may pay interest on Canada Disability Savings Grants or Canada Disability Savings Bonds as well as the manner of calculating interest;

(f) specifying the requirements of this Act or the regulations relating to the payment of any amount or the repayment of any amount or earnings generated by that amount that may be waived by the Minister to avoid undue hardship;

(g) specifying the circumstances in which the Minister may waive the requirements provided under paragraph (f);

(h) specifying information that the Minister may collect under section 15; and

(i) requiring issuers to keep any record, book or other document containing any information relevant to the administration or enforcement of this Act or the regulations, and respecting where, how and how long it is to be kept.


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