*NOTE: The proposed changes discussed in this article were reversed by the Ontario government.  See Proposed ODSP Changes Reversed by Ford Government

I know too much about the Ontario Disability Support Program to feel optimistic.

After cancelling most of the changes the previous Liberal government announced for the Ontario Disability Support Program in their final budget before leaving office, Ontario’s Ford government announced some changes of their own, late last year.

On November 22, 2018, Lisa MacLeod, the Minister of Children, Community and Social Services, held a press conference.  Promising to restore dignity and assistance to people living on the margins, Macleod said, “I’m proud very proud to stand in front of you today to announce a renewed social services approach to social assistance. One that prioritizes dignity, independence, compassion, empowerment and accountability.”

The changes Minister MacLeod announced would be implemented within the next 18 months do not reflect a renewed approach to social assistance.  Social assistance in Ontario is largely focused on eligibility and enforcement, rather than client-focused needs, support and service delivery.  The changes MacLeod described will not shift the basic framework of policing recipients who are forced to navigate a minefield of confusing rules and restrictions.

Two key changes MacLeod described are particularly concerning.  One change will modify the treatment of employment income earned by ODSP recipients. The other change will align ODSP’s definition of disability with the Federal government’s definition.  Both of these changes deserve close examination because they may very well make it harder for adults with disabilities to qualify for the needed support ODSP provides and reduce the amount of support for many on the program and working.

This post will focus on the proposed changes to ODSP’s treatment of employment income.  The change to ODSP’s definition of disability will be discussed in our next post.

ODSP provides financial assistance to adults with disabilities in financial need.  The program maintains asset and income limits.  If your assets or income exceed these limits, you may not qualify for the program or receive a reduced amount of financial support.

Once approved for ODSP benefits, recipients must abide by the program’s complex web of financial rules, limits and restrictions.  You do not have to be financially destitute to qualify for ODSP.  You are allowed to have assets and you are allowed to earn income.  But there are restrictions and the rules confuse most recipients and their families.

Setting limits is a balancing act.  The government wants to encourage people on ODSP to seek employment and hopefully earn enough money, so they no longer need income assistance from the province.  But what is “enough” income?  At what point should government assistance be clawed back because of the amount of income you earn?

Setting employment income limits is not simple.  Make it too restrictive, you weaken incentives to seek employment, trapping people in a cycle of dependency.  Increase the amount people can earn and you could have more people receiving social assistance.

It is more complicated than simply figuring out how much a person can earn at a job and still receive government assistance.  Here are a few questions that help to highlight the complexity:

  • How much employment income should a person be allowed to earn without affecting ODSP entitlements?
  • Should limits be based on monthly income or annual income?
  • How should the amount of income assistance be calculated when a recipient is earning employment income?
  • What should happen if a person’s wages exceed thresholds set by the program? Should they need to repay money received from the government because their wages exceeded certain thresholds? Should their ODSP benefits be reduced in lieu paying out of pocket? By how much? For how long?

Issues of fairness and affordability must be considered.  Then there are practical concerns.  Rules need to be administered.  Systems and processes are needed to monitor, evaluate and apply program policies.

It’s helpful to understand how employment income affects ODSP benefits, today before discussing the government’s proposed changes.

Understanding the Current Rules

Currently, ODSP recipients can earn up to $200 of net income per month without a reduction to their ODSP benefits.  Each additional dollar earned in the month, reduces a person’s ODSP benefits by 50 cents.  ODSP also provides an additional $100 per month, called a work-related benefit, if you are working.

Here is a step-by-step process to calculate the amount wages reduce ODSP income benefits:

Income earned for the month, after taxes and deductions. $1,000
Subtract $200 $1,000 – $200 = $800
Divide by 2 $800/2 = $400
The amount ODSP benefits are reduced in the following month = $400

If you are a single person with no dependents, receiving $1,169 per month from ODSP and you find a job, your ODSP is increased by $100 to $1,269 per month.  Using the example above, if the job pays $1,000 per month, your ODSP reduced by $400 per month, leaving you with $869 per month from ODSP.

Your ODSP is clawed back because you are working, but your overall financial situation has improved.  Before the job, you were receiving $1,169 per month.  With the job, your total monthly income is $1,869 ($1,000 from working + $869 from ODSP).  You’re left $700 per month more than what you had coming in before the job.

Minister MacLeod called Ontario’s social supports a patchwork of programs, mired in far too much administrative red tape.  Agreed.

Monthly income reporting is onerous for people on ODSP and their caseworkers.  The workload is tremendous.  As well, errors and fixing those errors creates more work, not to mention additional stress.

Each month, you must report your income to ODSP. And each month, your caseworker must determine if your ODSP benefits should be reduced in the following month and by how much.  If you forget to report your income or it somehow gets lost along the way, your ODSP benefits might be suspended until your reporting is brought up to date.

People have complained about reporting their income, only to be told it was never received.  Income reports can be submitted by fax, regular mail, or by dropping it off at your ODSP office.  ODSP does not confirm they have received your income report.  ODSP does not have an online system you can check and reaching your caseworker by phone is difficult, given the significant caseloads they carry.

Too often, recipients are not notified their income report was never received until they get a letter explaining their ODSP has been suspended because of a missing report. Some recipients have chosen to deliver their employment income reports in person, insisting they get a copy date-stamped by their ODSP office for proof of receipt.

Reviewing income reports creates a great deal of administrative work.  In March of 2017, 74,398 people on ODSP were earning employment income (See: Social Assistance Trends – Ontario Disability Support Program Table 11). That is close to 900,000 income reviews per year.

British Columbia’s disability income support program assesses employment income on the amount a recipient earns, annually.  In B.C., recipients can earn up to $12,000 per year (more if they are married) before their disability income benefits are affected.  Even though the B.C. program looks at annual rather than monthly employment income, reports must be submitted each month.

Unlike those in Ontario, B.C. recipients can submit their income reports online. They still have the option to fax, mail or deliver reports in person, but the online option reduces the risk of paperwork getting lost in the shuffle.

Also, B.C. the online system notifies recipients of errors or issues. Every recipient can set up an online account where they can review any messages from the program, including ones about income reporting issues.

Understanding the Changes

At the November press conference, Minister MacLeod described how her government intended to change ODSP’s treatment of employment income, confident people will be better off.  Here are the core components of the changes:

  • Employment income will be assessed on an annual basis, putting an end to monthly assessments.
  • Recipients will be able to earn up to $6,000 for the year, without a reduction in ODSP benefits.
  • Each dollar earned beyond the $6,000 exemption will reduce a person’s ODSP benefits by 75 cents.

Seems like an improvement.  It will be for some, but not for everyone.

Before diving into what the numbers mean, a few thoughts on how the changes may or may not improve ODSP’s administrative effectiveness.

In Minister MacLeod prefaced her description of the changes, stating, “The changes we will make to support the disabled will focus on simplifying our program, reducing red tape and providing people with more flexibility as we commence on this redesign.”

Making changes in the name of simplifying ODSP could make it easier to understand and easier to manage.  But a simplified support program does not guarantee improved outcomes for the people it is intended to support.

To clear the waitlist of children with autism in need of therapy, the Ontario government announced efforts to provide funding to families as quickly as possible.  The amount of funding a family could expect, would be based on the age of the child with autism and the parents’ income.  For children under 6 years of age, parents could receive up to $20,000 per year, depending on their income.  Parents earning less would receive more than higher income households.  The formula seems simple enough. This might clear the waitlist much faster.  But it doesn’t mean it will improve things for those in need of assistance, if the amount of support is reduced.

ODSP is complex program.  Providing income assistance to hundreds of thousands of people who need it presents many challenges.  Simplifying the myriad of policies, limits and exemptions might make it easier to administer.   Workloads might ease.  Assessing eligibility and enforcing the program’s limits and restrictions may not be as complicated.  But will efforts to simplify ODSP improve things for the people on ODSP?

Speaking about how ODSP will treat employment income Minister MacLeod went on to say, “Rather than forcing ODSP recipients to undergo a review of eligibility for benefits on a monthly basis, this will now be done annually.” Whether or not she meant recipients would need to report their income once per year, wasn’t clear.  Might they adopt B.C.’s approach where the affects of employment income on disability benefits is determined on an annual basis, but earnings must be reported each month?

On the face of it, who wouldn’t prefer reporting their employment income once a year instead of each month?  But what unintended consequences might there be by moving to an annual review?  If they put an end to monthly reporting, what happens when a person’s income is reviewed at the end of the year after they earned enough income to merit a large reduction to their ODSP benefits?

Today, if you earn more than the monthly limit, your ODSP is reduced in the following month.  But that is the extent of the reduction.  Reporting wages only once per year could lead to some painful surprises. Your ODSP could be reduced not just for one month but for several months or even an entire year.  Failing to anticipate and prepare for the reduction would create problems some may not be able to address.

The B.C. program reduces a person’s disability income entitlements for the following year, if their income was high enough in the previous year.  If Ontario does the same, you will need to set aside some of your money each month. If this year’s wages result in a drastic cut to your benefits for next year, you will need some savings to draw from to make up the shortfall.  Easier said than done.

Setting aside enough money is not easy. Let’s be honest, lots of people, including those earning six figure incomes, fail miserably at saving for a rainy day.  But people on ODSP are living close to the margins.  Without a financial buffer, a severe drop in overall income would create severe consequences.

Recipients will need to understand the new rules and calculate how their income could affect their ODSP support down the road. But math skills alone won’t be enough.  They will need to make real life choices.  Setting aside money means eliminating expenses.  Which expenses should be excluded when money is tight already?  Sticking to a budget, particularly when an unexpected expense appears, is difficult.

People have a difficult time understanding today’s formula, but only so much damage can be done when things are assessed each month.  Reporting once a year would make it difficult to assess your situation along the way if you’re not sure how things should be calculated.  Your benefits for the following 12 months could suffer a much larger reduction than you thought. Annual reporting would be less of an administrative burden, but annual employment income reviews could affect lives, profoundly.

Might this be the reason why the B.C. program maintains monthly reporting? Even though employment income does not affect their benefits on a monthly basis, monthly income reporting helps B.C. recipients understand how they are doing along the way.

In my mind, it is the difference between receiving grades on tests throughout the school year and not finding out how you did until you receive your report card at the end of the year.  You thought you did fine on the tests, when in fact you failed, but you didn’t find that out until the end of the year.  You might not like writing tests throughout the year and you might not enjoy reviewing test results, but regular feedback gives you time to make adjustments to avoid more serious problems.

Reducing the frequency of reporting, should reduce the amount of administrative work for ODSP.  But let’s be clear, doing less of something doesn’t mean things are done more effectively.  Going from monthly to annual reporting should free up time to do other things, but effectively managing that reporting process remains important.  Arguably, the stakes are increased, if so much is determined once per year.

Efficiency improvements are realized by changing the process itself.  In B.C., people can submit their income reports online by signing into a personal account, which automates at least part of the reporting process and eliminates the risk of mailed and faxed reports getting lost.  An online system allows recipients to login to see if there is an issue with their income reports they need to address.  They do not need to call their worker who would then have to take time away from other tasks to let you know if there is a problem and discuss any issues that might exist.

Ontarians are still stuck with snail mail, fax or personally trekking down to their ODSP office.  Email isn’t even an option.  In an age where you can use your smart phone to deposit a cheque into your bank account, submit your taxes online, reserve a library book via the internet, and look up the status of your amazon delivery, why is it that ODSP is so far behind the times?

Whether or not the government will actually improve efficiencies will depend on the type of changes they make.  Simply reducing the frequency of income reporting reduces workload; it doesn’t make the program more efficient.

A Look at the Numbers

Whether you end up better off or worse when the new rules kick in, will depend on how much employment income you earn in a year.  Also, the timing of when you earn income in the year matters.  These factors will determine if you will have more money in your pocket than you do today, or less.

Where the New Rules Will Put More Money in People’s Pockets

With today’s rules, a job paying you $500 per month ($6,000 per year), reduces your ODSP by $150 per month ($1,800 per year).  Under the new rules, earning this amount won’t affect your ODSP income benefits at all, leaving an additional $1,800 in your pocket.

Evaluating employment income on an annual basis, rather than monthly, can help as well. A seasonal worker earning a larger amount over a matter of a few months, could fair better under the new rules.  Let’s say…

  • You are single with no dependents
  • You receive $1,169 per month from ODSP
  • You work for only two months in the year
  • You earn $3,000 of net income in each of those months ($6,000 for the year)
  • You are entitled to an additional $100 from ODSP for each of the months you work, increasing your ODSP benefits to $1,269 for each month you are working.

Under the current rules, you would lose two months of your ODSP income benefits.  The first $200 of income in a month is exempt.  This leaves $2,800 of income.  Every dollar of the $2,800, reduces your ODSP for the month by 50 cents. So, your ODSP for the month is reduced by $1,400.  Since you are entitled to $1,269 for the month you are working, your ODSP is clawed back to zero for each of those months.

Under the new rules, your ODSP would not be reduced at all because income will be assessed on an annual basis instead of monthly.  The new rules would allow you to earn up to $6,000 for the year.  It doesn’t matter if you earn the $6,000 over 12 months, six months, two months or one week.

But the new income rules won’t work in everyone’s favour.

Where the New Rules Will Leave the Same Amount in People’s Pockets

If you earn $1,100 per month ($13,200/year), your ODSP benefits will be reduced by the same amount under the proposed rules as they are under the current rules.  Both approaches to the treatment of income reduce ODSP by $5,400 for the year.

Where the New Rules Will Leave Less Money in People’s Pockets

Beyond $1,100 of monthly income, the new rules will leave less money in people’s pockets.

Let’s say you earn $1,200 per month at your job. Under the current rules, your ODSP would be reduced by $500 per month, or a total of $6,000 for the year. Once the new rules come into effect, the clawback will be $6,300 for the year, leaving you with $300 less for the year.

But how much do people on ODSP earn?  Will the new rules impact many people?  How severely?

In March 2017, 28% of married couples with two children on ODSP were earning employment income. The average monthly net income for these families was $1,464 (See: Social Assistance Trends – Ontario Disability Support Program Table 11).  Under the current rules, earning $1,464 per month reduces ODSP benefits by $632 per month ($7,584 for the year).*  Under the proposed rules, their ODSP would be reduced by $8,676 for the year.  The new rules will leave the family with $1,092 less for the year.

ODSP provides a married couple with two children with $1,484 per month for shelter and basic needs. If one of the adults is employed, ODSP provides an additional $100 per month, for a total of $1,584 per month or $19,008 per year. Today, they could earn up to $3,368 per month ($40,416/year) before their ODSP income is reduced to zero.  $40,416 of net income is not a meagre amount, but it is not a lot, particularly when there are four mouths to feed and additional expenses associated with living with a disability.

By comparison, under the proposed rules, if you are married with two children and your job pays you $2,612 per month in net income ($31,344/year) your $1,584 of monthly ODSP income assistance would be wiped out, entirely.  Leaving you and your family with $4,536 less for the year.  This is tantamount to a 12.64% reduction in total annual income.

Current Proposed
Employment Net Income (Monthly) $2,612 $2,612
Employment Net Income (Annual) $31,344 $31,344
Annual ODSP Income Benefits $19,008 $19,008
ODSP reduction due to earned income -$14,472 -$19,008
ODSP Income Benefits after Reduction $4,536 $0
Total Net Income (Employment + ODSP) $35,880 $31,344
Total Reduction Net Annual Family Income ($): -$4,536
Total Reduction Net Annual Family Income (%): -12.6%


Minister MacLeod has flatly stated that the best social program is a job.  If she and her party believe employment is the solution, how is their proposed treatment of employment income an incentive to work?

Living on ODSP income benefits alone, puts you about 30% below the poverty line.  You will be able to earn up to $6,000 from working, without affecting your ODSP benefits, but this would leave you hovering close to the poverty line.  From there, every dollar of additional income earned from a job will reduce ODSP benefits at an accelerated rate.

ODSP recipients often live quite close to the edge.  Many do not have any money remaining at the end of the month.  Many don’t have enough to cover the cost of their basic needs, run out of money before the end of the month, fall behind on bills, and go without key necessities.

The family with two kids getting by on ODSP plus another $2,612 of monthly employment income will have to get by with 12.6% less once the new rules are applied.  Unless they find a way to rapidly increase their employment income to cover the shortfall, they will be forced to reduce their expenses, when they are just making ends meet as it is.

Consider how a 12.6% sudden drop in income would affect your family.  Even if you are earning a healthy income, 12.6% less means you would not be able to afford everything you do today, even if that means you have less money for long-term savings.  It would hurt.  You would feel some pain. But losing this much income will seriously undermine the efforts people with disabilities have been making to achieve economic stability.

Minister MacLeod began the November 22nd press conference by giving the social assistance programs her government inherited a failing grade.

“The sad truth is that social assistance in Ontario is simply not working for the people it is intended to support. It traps people into a cycle of dependency and far too often it robs them of the dignity and independence of a job.”

In a post from almost six years ago, I wrote, “ODSP is like throwing a life preserver to a person out at sea, but not pulling them to shore to join the rest of us.” I don’t see how the government’s proposed treatment of income will help people get to shore and off ODSP.  The new rules will leave more money in some people’s pockets, but not enough to get them off ODSP.  And for those earning more than $13,200 per year will receive less from ODSP than they do today, once the new rules kick in.  Thousands of individuals and families with a realistic chance of earning enough to eventually escape ODSP will have far less in their pockets.  Instead of helping them remain in the workforce and truly become self-supporting, the government’s treatment of income will push people further from shore.

If they intend to truly help people with disabilities and their families escape the cycle of poverty they are in, I would ask Minister MacLeod and her colleagues to examine the effects these changes will have on people already dealing with very challenging circumstances and consider alternative approaches that will assist all ODSP recipients.


*Assumes only one of the parents is earning employment income