Gone, Gone, Gone ... You've Been Gone Too Long

For awhile there, it seemed like we were talking about nothing but the new RDSP non-stop and it felt like time to give it a break. But I now realize that it may have been gone a little too long. So, perhaps an update of sorts is due.

For those of you saying "RDSP? What RDSP?", I refer you to the RDSP Fact Sheet courtesy of the RDSP Blog.

For the rest of you hearty souls, I can advise that regulations for the Registered Disability Savings Plan are expected to be finished and passed in late June. Yep, that's this June as in this month.

Apparently, financial institutions have been waiting for the Regulations to come out before they begin adapting and creating their systems for the RDSP. This reluctance on their part makes sense in a way, I suppose, in that they would likely be pretty unimpressed if they began setting up their systems and then had to redo the work as a result of amendments to the Regulations.

It's also been noted that the whole issue of the implementation of the RDSP should lead to a natural follow-up around the issue of how Trust funds, in general, are treated. Given that the RDSP surpasses trusts for flexibility and the amount of assets allowed within the plan, it should be a logical extension for provinces to grant trusts the same flexibility and treatment as the RDSP, right?

But the devil is, as always, in the details and in this case, the details are exactly how the various provinces will choose to treat the RDSP.

So what's up in that regard in Nova Scotia?

So glad you asked. Unfortunately, the answer appears to be ... not a lot.

You might recall from our previous (numerous) discussions around the Henson Trust that the Department of Community Services (DCS) appears to take the position that no trust (including the Henson Trust) is valid in Nova Scotia when it comes to protecting eligibility for government benefits as from their point of view the beneficiary of the trust has access to assets and thus will be ineligible for benefits. And although I and many others beg to differ from their view when it comes to the Henson Trust, it's correct that, as the legislation is currently worded, discretionary trusts will not protect your child's access to government benefits.

The problem with your typical garden-variety discretionary trust is created by a regulation passed pursuant to the Employment Support and Income Assistance Act which reads as follows:

58 Trust Money Where a sum of money is set aside in trust for an applicant or recipient or a spouse or dependent of an applicant or a recipient by a court or a person other than the applicant or recipient, assistance shall not be granted where it is feasible for the applicant or recipient to obtain support for himself or herself or his or her spouse or dependent child from the sum set aside.

So that's the current situation. And to the best of knowledge, the Department has not made any move to change this regulation. Or given any indication of how they plan to deal with the RSDP.

The RDSP, you see, is a creation of the federal government. So now the feds get to play the 'good guys' while the Provinces have to pony up to the table and allow for fair implementation of the program. And although many provinces have either already done so or have taken some good solid steps in that direction, alas, to date, Nova Scotia does not appear to be one of them.

'So what's up with that?' I ask.