A Private Members Bill to Protect RDSPs and RESPs from Creditors
Today in the legislature I introduced a private members Bill M208 – Court Order Enforcement Amendment Act, 2016. The bill adds Registered Disability Savings Plans (RDSPs) and Registered Education Savings Plans (RESPs) to the list of plans protected under the act.
If a person files for bankruptcy in B.C., their RRSPs are protected from being seized by creditors. However, the same protection does not exist for RESPs or for RDSPs. A child should not have their education investment seized due to misfortune that befalls their parents. Alberta has protected RESPs; we should follow suit.
I asked the Minister of Justice about this problem in question period two years ago. At the time, the Minister said that it was an important issue and that she’d be glad to work with me to move it forward. Yet two years have now passed and still nothing has changed. Seeing as I haven’t seen any meaningful progress from the government on this simple legislative change, I decided to offer them a possible solution.
Text of Bill Introduction
A. Weaver: I move a bill, intituled Court Order Enforcement Amendment Act, 2016, of which notice has been given in my name on the order paper, be introduced and read a first time now.
Motion approved.
A.Weaver: Registered Retirement Savings Plans (known as RRSPs) were first introduced federally in 1957. Legislation enabling Registered Retirement Income Funds (known as RRIFs) was subsequently brought forward in the late 1970’s.
RRSPs and RRIFs are protected in this, and most other provinces, from creditors in the case of personal bankruptcy. Protecting these funds provides a glimmer of hope that individuals undergoing bankruptcy will not be destitute in their old age.
In 2008 Federal legislation was passed to allow for the creation of Registered Disability Savings Plans (RDSPs). The RDSP is a federal, tax-deferred, long-term savings plan for people with disabilities who want to save for the future.
Unfortunately, under our outdated Court Order Enforcement Act, 1996, RDSPs are not listed as a registered plan in BC’s legislation and are therefore not exempt from creditor protection. Should an individual with an RDSP go into debt, their savings in the RDSP will not be protected from seizure. The same is true for Registered Education Savings Plans (known as RESPs).
Recognizing that a child should not have their education investment seized due to a misfortune that befalls their parents, the Alberta government also passed legislation two years ago protecting from creditors.
This Bill amends the Court Order Enforcement Amendment Act to ensure that RESPs and RDSPs are protected by law from creditors.
I move that the bill be placed on the orders of the day for second reading at the next sitting of the House after today.
Motion approved.
BILL M208, Court Order Enforcement Amendment Act, 2016, introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.
One Comment
Thank you for doing this. I would also like another policy changed because I feel it discriminates against our children that their earnings are included in family income if their parent is on income assistance. My daughter left home and moved in with her boyfriend because she didn’t want her earnings deducted from my cheque when she started working after graduating at the age of 17. I feel this falls under child slave labour.
As well,due to the lack of affordable housing, this policy puts my child into risky behaviour because she could get pregnant and is exposed to sexually transmitted diseases at a younger age, not to mention abusive relationships.
This policy is wrong in so many ways. Please contact me if that would help. Thank you.