Law Commission of Ontario Final Report on Capacity and Legal Representation for the Federal Registered Disability Savings Plan

The Law Commission of Ontario (LCO) has released its final report on Capacity and Legal Representation for the Federal RDSP. RDSP refers to the Registered Disability Savings Plan:

"Under the Income Tax Act (ITA), adults can open an RDSP for themselves and decide the plan terms as the 'plan holder'. However, the ITA provides that where an adult is not 'contractually competent to enter into a disability savings plan' with a financial institution, another 'legally authorized' person must act as the plan holder. Therefore, a financial institution may decline to enter into an RDSP arrangement with a beneficiary who does not meet the common law test of capacity to enter into a contract. An adult or another interested person, such as a family member, may also believe that an adult lacks capacity to establish an RDSP and wish to appoint a plan holder before approaching a financial institution. "

"The RDSP program does not provide a means to name a plan holder. Instead, a plan holder must be appointed under separate provincial laws. The existing provincial laws that apply in these circumstances, however, tend to address areas of property management that are broader than the RDSP, such as paying bills, buying and selling real estate, and covering daily expenses. With few exceptions, they are also very much focused on protecting adults from the serious harm that can occur when they are unable to make decisions for themselves; rather than on facilitating access to a benefit program, such as the RDSP. The federal government has reported that in some provinces, opening an RDSP can involve a considerable amount of time and expense and may have a significant impact on the beneficiary. "

"Following our presentation of essential background to the RDSP in Chapter II, the third chapter of the report explains the rationale for a streamlined process to appoint a plan holder specifically in the province of Ontario. The LCO undertook extensive research and consultations to understand the interests of affected individuals and organizations in the Ontario context (...)"

"The LCO’s recommendations are intended to respond to stakeholders’ aspirations for a streamlined process that is inexpensive, user-friendly and narrowly focused on the RDSP. Chapter IV is dedicated to our recommendations. In addition to recommending a streamlined process, we address questions about how it could be implemented. We consider measures to safeguard beneficiaries against financial abuse; whether community organizations should be eligible to act as RDSP legal representatives; the role of RDSP legal representatives; and the provision of accessible information to members of the public; among other issues." 

"The Law Commission of Ontario recommends that the Government of Ontario implement a process that would enable adults to personally appoint an 'RDSP legal representative' to open and manage funds in an RDSP, where there are concerns about their capacity to enter into an RDSP arrangement with a financial institution. The process would be available to adults who do not have an attorney or guardian for property who could act as their plan holder. It would enable adults to choose who they would like to assist them in gaining access to an important social benefit."