BMO Bank of Montreal is calling on Ottawa to increase the lifetime contribution limit for the Registered Disability Savings Plan to $500,000 from $200,000.

On Tuesday, the bank provided its comments and recommendations to the federal government’s review of the Registered Disability Savings Plan.

“When Finance Minister Jim Flaherty took the important step of introducing the RDSP, Canada showed the world how smart policy can help provide financial security and independence for people with disabilities,” says Hugh McKee, president and chief operating officer, BMO Investments Inc. “The RDSP is a terrific savings vehicle. We believe that increasing the lifetime contribution limit from $200,000 to $500,000 will provide both parents and contributors with even more peace of mind.”

The bank (TSX:BMO) notes that about 4.4 million Canadians (14.3%) reported having a disability in 2006; more than 200,000 were children aged 14 and under.

Among its recommendations, BMO has suggested an increase to the lifetime contribution limit from $200,000 to $500,000, which it says is “a more realistic amount to meet the financial needs of people with disabilities that affords a greater opportunity for extended family members to support a loved one.”

The bank has also recommended a change to the so-called 10-Year Rule. Currently people who receive grants or bonds from the government must wait 10 years after the last contribution in order to withdraw money from their RDSP. BMO proposes lowering the period to a shorter term, such as five or three years, and the creation of specific exemptions for circumstances such as financial hardship.

The submission also noted the results of a recent BMO survey that revealed only 10% of Canadians with a disability, or those with a family member with a disability, are knowledgeable about the RDSP and its benefits.

“Clearly there is a need to ensure more people who are eligible for the RDSP are made aware of how it can help them,” says McKee.

“BMO is engaged in efforts to inform and educate our clients and Canadians about the existence of the RDSP, including free seminars and workshops that we have held across the country for groups supporting people with disabilities. We encourage all stakeholders to do the same.”