ODSP Information

Overview

• Estate Planning is especially important when you have beneficiaries with disabilities, particularly if those beneficiaries are receiving benefits from the Ontario Disability Support Program (“ODSP”).

  In Ontario, ODSP provides support to persons with mental or physical disabilities. Support provided includes a small living allowance and disability-related benefits, such as a drug plan. Depending upon the disability, this coverage can be critical, as some medications can be prohibitively expensive if not covered by other plans.

  Eligibility for ODSP is tied to a stringent income and asset limitation, and a large gift made directly to an ODSP recipient may render the disabled person ineligible for ODSP support.

  In order to be eligible to receive ODSP, a person must:

  • Be an Ontario Resident;
  • Be at least 18 years old;
  • Be in financial need; and
  • Be a person with a disability or be a member of a prescribed class: CLICK HERE.
  • To meet the financial need criteria, the person’s assets and income cannot exceed allowable limits. CLICK HERE

  These limits increased significantly on September 2017 to:

  Assets:

  • A single individual’s asset limit has gone up from $5000.00 to $40,000.00
  • A couple’s asset limit has gone up from $7500.00 to $50,000.00.

  Income:

  • An individual’s income limit in any consecutive 12-month period is now $10,000.00 (from $6000.00).

  There are certain assets that are exempt from these calculations, including, for instance:

  • An interest in a principal residence
  • One motor vehicle
  • A prepaid funeral
  • The cash surrender value of life insurance policies
  • All funds held in a Registered Disability Savings Plan
  • Tools of the trade
  • Student loans
  • Loan used for the purchase of an exempt asset, a principal residence or an asset necessary for health or welfare

  An ODSP recipient can be the beneficiary of a fully discretionary trust (often referred to as a “Henson Trust”), but if he or she receives assets directly that are not in trust, his or her eligibility for ODSP can be unintentionally impacted. A Henson Trust is a tool to consider when estate planning for beneficiaries with disabilities. CLICK HERE FOR HENSON TRUST

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