Effective September 1, 2017, Ontario has relaxed some of the asset limits and other rules required for individuals to be eligible for benefits under the Ontario Disability Support Program (“ODSP”). The changes are generally seen as long overdue, given the ever-rising cost of living and difficult in finding affordable housing (in the GTA especially).
The New Changes
The main changes that were introduced are as follows:
- Monthly benefit allowances are increased by 2%;
- Asset limits have been increased from $5,000 to $40,000 for individuals and from $7,500 to $50,000 for couples; and
- The limits on cash gifts, voluntary payments, or amounts received under a trust or inheritance were increased from $6,000 to $10,000 per year.
Notably, cash gifts or inheritance payments to an ODSP recipient which are used by the recipient to purchase a principal residence (a home or condominium, for example), a motor vehicle, or is used to pay first or last month’s rent on a rental unit, are exempt from being counted towards the limit under the ODSP rules. Otherwise (with a few further exceptions), any amounts received over the $10,000 limit, will be included as income for the recipient and could jeopardize their eligibility for benefits.
The Impact of the Changes
As a number of my fellow colleagues in the estates bar have noted in other blogs on this subject, it is essential that solicitors who practice in estate planning be aware of the changes and ensure that they are advising clients who have disabled children or other family members appropriately, so that the ODSP benefits of those individuals can be preserved to the greatest extent possible after the death of the testator.
However, it is not only the solicitors in the estates bar who should be taking notice of these changes, but the litigators as well. Estates litigators are often in the position of advancing Dependants Support Claims on behalf of disabled or incapable adults, who were dependent on their parent(s) prior to death and who are also receiving ODSP benefits.
When negotiating settlements on behalf of clients who may be receiving ODSP (or if incapable, for their litigation guardians), litigators need to be aware of the potential impact these settlements may have on the disabled person’s benefits, so that they can discuss this with their clients.
For example, a litigation guardian for an incapable person has a fiduciary duty to act in the person’s best interests at all times. Accordingly, any settlement entered into which results in the loss of valuable medical and financial benefits for the incapable person, should be undertaken with caution by a litigation guardian and only with a full understanding of the potential impact on the person’s ODSP.
Litigators should ensure that they discuss these implications with their clients prior to settlement and might wish to propose some creative solutions during negotiations to ensure the payments can be sheltered, if possible – whether in the purchase of a principal residence or other exempt mediums under the rules.
Fortunately, in addition to increasing the benefits and asset limits for disabled individuals in Ontario, the new changes allow both solicitors and litigators a little more breathing room when advising their clients on how to best plan for the future of their disabled loved ones, or for themselves personally.
Thank you for reading.
For questions about this case or for advice and guidance on other Estate Litigation matters, contact the estate litigation lawyers at Eisen Law in Toronto to find out how we can help. Call us at 416-591-9997 or contact us online.