September 20, 2017

By Paul Jasiura

Co-authored by Adam Castonguay (Law Student, Bora Laskin Faculty of Law)

Disabled persons in Ontario are eligible for income support benefits through the Ontario Disability Support Program (ODSP). In order to ensure that only people in need receive the benefits, there is a limit on the assets owned by the recipients and on the income recipients may have from other sources. These limits have been slow to change and for years, people have argued that the rules were out of date. To its credit, the Ontario government has listened.

Effective September 1st, 2017, amendments to Ontario Regulation 222/98 (the “Regulation”) under the Ontario Disability Support Program Act, 1997 will affect who is entitled to income support and change the way in which the assets of disabled Ontarians are managed.

The changes brought about by the Regulation increased the limit of non-exempt assets for disabled persons receiving ODSP by 800% from $5,000 to $40,000, plus $10,000 for a spouse, up from $2,500. The additional $500 for other dependants remains the same.

This means that a person with a spouse and two children can receive ODSP even if they have up to $51,000 in savings or other assets on top of the excluded assets, like a home or car.

The limit for payments received from a trust or life insurance policy, or gifts or other voluntary payments, was raised by $4,000 so people can now receive up to $10,000 in these payments each year without affecting their income calculation or eligibility for income support.

The amendments also added a new income exemption for gifts or voluntary payments to a person receiving ODSP to help them purchase a car or a house, or to cover first and last month’s rent.

Furthermore, the amendments removed the $100,000 cap on awards of damages by revoking subsection 43(2) of the Regulation, so that people will no longer lose their ODSP when they receive the compensation listed below for devastating losses in the family:

41. 13 Subject to subsection 43 (5), an amount received as compensation for non-economic loss under section 46 of the Workplace Safety and Insurance Act, 1997 or section 42 of the Workers’ Compensation Act…

43 (1) 4. Subject to subsections (3) and (5), an amount received as damages or compensation for,

i. pain and suffering as a result of injury to or the death of a member of the benefit unit, or

ii. expenses actually and reasonably incurred or to be incurred as a result of injury to or the death of a member of the benefit unit.

43 (1) 4.1 Subject to subsection (5), an amount received as an award for damages under clause 61 (2) (e) of the Family Law Act to compensate for loss of guidance, care and companionship as a result of death or injury.

Note, however, that there is still a $100,000 cap on disability trusts which can be set up from monies received from an inheritance or life insurance. Any amount above that will count towards a person’s assets, affecting their ODSP eligibility.

While the cap on disability trusts remains in place, the increased prescribed asset limit can allow for an increase in payments allowed out of these trusts, or out of the standard “Henson Trusts” which have no cap. As well, the new “gift” income exemption will give people greater access to funds and support when they need it most, without affecting their ODSP benefits.

These updates will make it easier for more disabled Ontarians and their families to meet their basic needs in the face of ever-rising expenses, while also given them a chance to save money, live more comfortably and escape the confines of a mere subsistence living.