People on ODSP should not be expected to take a vow of poverty.
As an advisor, I work with many people on the Ontario Disability Support Program (ODSP), which is Ontario’s social assistance program offering income support for people with disabilities who are in financial need.
The number of Ontarians with disabilities who require income assistance is staggering. At least 25% of people with disabilities between the ages of 18 and 64 in Ontario are on ODSP. There are more people on ODSP than there are people on Ontario Works – the equivalent for people without disabilities. Let me say this again. There are more people with disabilities on social assistance than their counterparts, yet people with disabilities make up only 15% of the population.
I get it, ODSP is there for people with disabilities who are in financial need. It is a social benefit, offering an income to those who are struggling. However, the amount offered is difficult to live on, especially in an urban centre like Toronto where the cost of living is high. Many of my clients receive approximately $1,170/month from ODSP. If ODSP is a person’s only source of income, the financial struggle is far from over. In some ways, 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. Enough to stay afloat, but not enough to escape the rough seas.
To qualify for ODSP, you first have to demonstrate a financial need. As a single adult, you can’t have more than $40,000 in assets, although there are some exceptions. You can own your own home and a car and there are some investments you are allowed to have, such as the RDSP, but the restrictions are, well, restrictive.
I am not suggesting that ODSP income benefits be increased, at least not in this post. My focus is the asset restrictions. People on ODSP are concerned about exceeding the $40,000 limit. If they do exceed the limit, their ODSP can be revoked for an extended amount of time, if not permanently. There are ways to legitimately supplement ODSP income without jeopardizing it, but it is not straight forward or easy to understand how. There is no roadmap and just because you are on ODSP, does not make you an ODSP expert. People on ODSP are constantly worried about what they are allowed and not allowed to do for fear of losing the monthly income.
Currently, people are allowed to accumulate savings in a Registered Disability Savings Plan (RDSP), without it affecting their ODSP. They are also allowed to have up to $100,000 in segregated funds or an inheritance trust, combined. Simple and straight-forward? Not really. The RDSP has got to be the most generous savings plan ever offered by the federal government; it also happens to be the most complex and thus misunderstood. The government will generously contribute up to $90,000 to a person’s RDSP over a lifetime, but the contribution formulas and early withdrawal penalties make your head spin. And what is a segregated fund anyhow??? Okay, I know what it is. I sell and manage them, but I can’t tell you how many people I talk to don’t know what they are.
My point is this. It should be a little bit easier. I didn’t say it should be easy. I simply think it should be a little bit easier for people to understand how to supplement their ODSP without jeopardizing it. People with disabilities have enough challenges as they navigate a society that really has not been designed with them in mind. Can we not make ODSP a little more straight-forward so those on it can improve their financial situation and join the rest of us? Or are we saying that people on ODSP must also deal with a system of rules and regulations that are more complex than what they would otherwise have to follow?
How we treat the marginalized is a profound reflection of how we are doing as a society. If we are not going to increase the amount a person can receive from ODSP, let’s make the rules a little bit easier…at least a little bit easier to understand.
Note: Figures updated for 2019
Read the follow up article – ODSP It Shouldn’t Be So Complicated Part II
You may also want to read:
An Open Letter to ODSP Caseworkers
Segregated Funds Saved My ODSP
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You can contact Ron Malis at rmalis@monarchwealth.ca
A explanation of what a segregated fund is and how someone can purchase one while on the ODSP would have been helpful. Also what is the difference between getting an inheritance and having an inheritance trust while on the ODSP?
Hi Robert,
Thanks for your comment. The simplest explanation of a segregated fund is that it is an investment offered only by insurance companies and sold only by licensed insurance representatives. In many respects, they are similar to mutual funds, offering a wide variety of investment choices. However, from a regulatory perspective they are life insurance policies. Unlike mutual funds, they offer other benefits such as death benefit guarantees, maturity guarantees, creditor protection as well as bypassing probate.
I am not sure if I fully understand your second question. What I can say is that ODSP allows an ODSP to have up to a combined value of $100,000 between a trust and the cash value of a life insurance policy (which is why you are allowed to own segregated funds because they are life insurance policies). The funds in the trust can come from an inheritance or from the proceeds of a life insurance policy. Let’s say a person on ODSP receives an inheritance from their uncle, at least a portion may be placed in a trust in order to protect their ODSP, even if the trust was not drafted before the death of the uncle (consult with a lawyer who understands ODSP regulations).
Inheritance trusts are helpful when an inheritance has not been more effectively structured in a Henson Trust which can hold any amount of assets without threatening ODSP.
Sometimes the question is should you put the proceeds of an inheritance into a trust or segregated funds or both? This really depends on the situation. One consideration is the legal capacity of the person on ODSP to enter into a contract. Many people with developmental disabilities are not in a position to enter into a contract. As a result, they may not be in a position to own a segregated fund. In these instances, a trust may be the better way to go. On the flip side, a person who has the capacity to manage their own finances may prefer segregated funds over a trust so as to avoid the legal costs of setting up the trust and the need to deal with a trustee on an on-going basis.
Ron
Hello Ron,
I’m 55, married and we sold our home. I’m eligible for ODSP. If we put our money in to a RDSP will we be able to take our moneys out to buy a home later? Thanks, Lynn
If you are planning on purchasing another home soon, ODSP should allow you to maintain the proceeeds of the sale of your home in a bank account for a while, possibly 6 months, if you tell them you are going to buy a home in that time frame. You should talk to your ODSP office to discuss this.
You should be able to put it into an RDSP and then withdraw it to purchase a home at a later date. You should be aware of a few things. First, if the government has contribtuted any grants or bonds to your RDSP and you withdraw any money from it, you may or may not be subject to withdrawal penalties. Secondly, you are not allowed to contribute more than $200,000 into your RDSP over a lifetime, keeping in mind that the last year you can contribute to an RDSP is the year you turn 59. If the proceeds of the sale of your house is greater than $200,000 you may want to consider other ODSP exempt assets in addition to your RDSP. Finally, if you put money into an RDSP, you will be forced to withdraw a minimum amount each year, starting the year you turn 60. That minimum amount is determined by a formula called the LDAP formula, which is based on your age and the market value of your RDSP.
I highly suggest you talk to an advisor who understands both the RDSP and ODSP’s treatment of assets before you take action. If you are in the southern Ontario region, feel free to contact me, if you like.
Hope this helps.
Lynn don’t do that when you put money in a RDSP it is super hard to get it back. i’m in this situation right now with my bank and they don’t want to give me my money back cause they are loosing the grant from the government so the bank don’t want that so they want to give me a portion of my money with the government portion so the bank will give me a T4 and i need to pay tax on that, so it is a big racket, scam
Sylvain, I think I should clarify a few things. Without knowing what the bank has said to you specifically, if you make a withdrawal from the RDSP, the bank does not decide how much of the withdrawal comes from government contributions, your own contributions and investment growth. There is a specific formula that determines these amounts. The government designed that formula when they created the RDSP in 2008. The bank is simply required to follow that formula.
You have the right to withdraw money from your RDSP, but those withdrawals are subject to very specific withdrawal rules set by the government. A portion of each withdrawal is taxable. The size of the taxable portion of each withdrawal is also determined by a government formula, which, again, the bank is required to follow.
The amount of tax you will pay will depend on the amount that is taxable and your marginal tax rate. Is some cases, one might not owe any tax if their marginal tax rate is low.
Also, with respect to Lynn’s circumstances, she said she was in her 50’s. If she chose to open an RDSP account at the age of 55, she would not receive any government contributions. The last year the government will make any Grant or Bond contributions is the year the person turns 49. However, if you are in your 50’s, you can still open an RDSP and make your own contributions, even if you won’t get anything from the government. If an RDSP account has never received government contributions, the withdrawal rules are simplified. The government will insist on a repayment when a withdrawal is made only if the account has received Grant or Bond contributions in the previous 10-year period. If an RDSP account never receives any Grant or Bond contributions, the government would not require a repayment. As well, the tax burden are smaller.
Why are people forced to live on ODSP if we have investments is ODSP a contract
I’m not sure of what you mean exactly, but nobody is legally forced to live on ODSP. ODSP is social assistance for those who qualify and choose to apply and become a recipient.
Or do you mean to ask why must people live ONLY on the money they receive from ODSP without dipping into investments they may have? If this is what you meant, let me clarify that a person can supplement their monthly ODSP income benefit by drawing on investments or money in the bank they might have. ODSP has rules that limit the amount of money, investments and other assets. It also has rules about how much money you can receive, depending on the source of the money and what the money is used for. But the rules certainly allow recipients to supplement their ODSP income benefits by meaningfully drawing on money or investments they may have.
The rules for withdrawing money from an RDSP are RDSP rules…not ODSP rules. You are not prevented from withdrawing money from an RDSP, but it could mean the loss of Grant and Bond contributions previously made by the federal government. Many feel those rules are excessively restrictive. But, at least at this point in time, those are the rules.
I advise clients against putting as much money into an RDSP account if it could leave them in a position where they would have to withdraw money from the RDSP prematurely,to cover unexpected expenses.
My son was in a car accident in 2013 and has settlement benefits the OPGT refuses to allow him to access they only give him access to ODSP is this a contract he is under what if he revoked his ODSP will he be able to access his investment my OPGT we wanted nothing to do with them my foster sister fraudulently applied to be his property guardian what options do we have
Hi, I had a pension plan with my work and was laid off and took it to my bank and it was put into a pension plan with them that was locked in. That was 2010. I told my husbands ODSP worker at the time about it. And it kept getting locked in. In 2022 my bank suggested it be put in a registered savings investment and is locked in for 5yrs. Will this affect our ODSP?
If the investments are in a Locked-In Retirement Account (LIRA), it shouldn’t affect your husband’s ODSP. ODSP benefits might be affected when funds are withdrawn from the LIRA account or transferred to a different type of account.
The following is from ODSP policy directive 4.1 — Definition and treatment of assets
ODSP rules regarding income and assets must be applied to any money that is withdrawn from a locked-in account. However, the assets that remain in a locked-in account (the capital) remain locked-in and do not count toward the recipient’s asset limit. If the assets have been withdrawn and transferred to an unlocked vehicle (an RRSP or RRIF) the assets are not exempt and will count toward the recipient’s asset level.
Could you please clarify something for me? Do the assets in the Life Insurance Segregated fund HAVE to be from an an inheritance or proceeds from a life insurance policy? Or can they be for example an RRSP from from previous employement income, but owned in a Segregated fund? Thanks
Hi John. The assets do not need to come from an inheritance or the proceeds of a life insurance policy. In fact, I have transferred assets within an RRSP from “non-exempt” ODSP assets, such as mutual funds, to segregated funds in order to safeguard ODSP benefits. However, you need to keep in mind that an ODSP recipient is not allowed to have more than $100,000 in segregated funds, an inheritance trust (different from a Henson Trust) and cash value life insurance, collectively. Before you make such a shift, I strongly suggest you consult with an advisor who understands ODSP regulations to explain your (or the person’s) financial situation. I hope this helps. Ron.
Thanks Ron. My friend has less than $50,000 already existing inside a Segregated fund RRSP that was transferred from a pension plan. He has not applied yet, but was initially told by an ODSP worker that these assets would have to be drained first. I would hate to see him lose his hard earned retirement fund due to a misunderstanding. By the way do you find in general that ODSP tries not to admit that Segreated funds are exempt? My other question is are they not also exempt from ODSP income calculations for up to a $6,000 a year withdrawal?
My experience is that many people working for ODSP don’t know that segregated funds are an exempt asset to a max of $100,000. ODSP regulations are quite extensive and the assumption that ODSP workers are aware of each regulation has been proven false in a number of my experiences. I have heard of ODSP workers say that they don’t believe segregated funds are allowable, but when pushed to check, they have come back and retracted their initial position.
Money withdrawn from seg funds is subject to the $6,000 every 12 month rule. To be clear, it is every 12 month and not a calendar year. So, in essence, it is a rolling 12 months. So, an ODSP recipient can’t put $100,000 into seg funds and then take out the money and spend it however they like. However, whatever money is used for “disability related” expenses, is exempt from the rule. So, if your friend takes $10,000 out of his seg funds and uses it for a qualified disability related expense, none of that money should be attributed towards the $6,000 limit.
Hope this helps.
i have applied for odsp and approved, applied for cppd and reappling. I am on lots of meds. we have sold our home due to no job for either of us. now where and what to do with our (retirement)funds. can you suggest anything? thanks, Lynn
Hi Lynn,
There may be a number of things that you can do with the proceeds of the sale of your home, however it depends on a number of factors, including your age, the amount you received from the sale of your home, whether you have secured the Disability Tax Credit Certificate and possibly some other factors. I would suggest you contact me directly to discuss the details.
Also, given that you are applying for CPP-D, it is important to understand your ODSP will be reduced by the amount you receive from CPP-D.
Hi ron, how’s it going,
I was reading ur post & i read u got approved easy for odsp, i’m having a hard time getting approved, if possible i could use help & some tips to get approved since they declined me twice, i much appreciate the help & advice if u could, thanx, Joey..
Hi Joey. If you explain why you were rejected for ODSP, I can let you know if I have suggestions for you.
Hi Ron this is off topic, but I have been doing some research on ODSP and I am having a hard time understanding why ODSP has the right to take away a chunk of CPP money. Could you explain this as it is hard to find information about ODSP and CPP as well as OAS
Hi Mel,
Good question. ODSP is what is called a “means tested” benefit. In other words, the first thing you have to prove in order to receive ODSP is financial need. If you are receiving money from another source, such as CPP, your financial need is not as great as compared to somebody who is not receiving CPP. As a result, people who are receiving CPP are either not eligible for ODSP or they get a reduced amount; it depends on how much money they are receiving from CPP or other benefits.
Thanks,
Ron
Hello Ron,
My son is 24, he receives ODSP. He will start college in Toronto soon.
He will soon inherit over 1/2 a million.
Can you give me some direction on what to do with this. Thank you
Hi Maryanne,
Thanks for your question. This is a situation I come across of a somewhat regular basis. I can’t give you specific advice without know more about the situation but here are some thoughts. First, I am assuming that your objective is to protect your son’s ODSP. Given the strict asset limit restrictions ODSP has in place, protecting it from an inheritance of half a million dollars is obviously a challenge. However, there are a number of ODSP exempt assets. One of the most well known ones is the RDSP, which allows you to put up to $200,000 in over a lifetime, but I would not recommend contributing the full $200,000 in one year as it would bar your son from receiving government contributions in future years.
The other factor is how is the money structured in the first place? Is it set up in a trust? More specifically is it set up in a Henson Trust?
There are other ODSP exempt assets, but whether they should be pursued or not, really depends on your son’s circumstances. In my view, you should consult appropriate professionals. Specifically, a wills and estate lawyer who specializes in working with parents of children with disabilities and an advisor in the financial services sector who understands the RDSP and ODSP.
Ron
how much can i earn in a month working before i lose my osdp benefits. i dont want to lose my osdp benefits.
Hi Tianna,
This is not a straight forward question that is easily answered. However, I suggest you read the following page from the Ministry of Community and Social Services’ website: http://www.mcss.gov.on.ca/en/mcss/programs/social/odsp/income_Support/odsp_workearn.aspx
The general rule of thumb is, the first $200 you earn in a month from employment does not affect your ODSP. For every dollar earned above the $200 a month reduces your ODSP by 50 cents. In other words, if you earned $300 in a month, you can expect that the first $200 does not reduce your ODSP. The next $100 will reduce your ODSP by $50.
Determining how much you can earn before your ODSP is revoked is partially dependent on how much ODSP you receive. Additionally, there may be other factors that come into play. As much as I would like to give you a straight forward calculation, it really is not possible to do so. You could start with talking to your ODSP worker, call ODSP anonymously if you are not comfortable talking to your worker, or speak with a lawyer who has a strong understanding of ODSP directives. If you want referrals to such lawyers please contact me and I can provide you with some names.
Ron,volunteered and taken 2 temporary (I month, 2 months)jobs that I could do with my disability. I am afraid if I do a part time job or volunteer now it will hurt my chances of permanent ODSP which I will eventually need as my condition will not improve but get worse.Related to this comment and reply. Is it wise for me to apply for a part time job, that my disability will allow me to do, even though I will have a scheduled Medical Review for ODSP in March 2016. I am on ODSP now but told it was temporary due to the fact that my disability could change after a surgery. When I applied the first time(2011) for ODSP I was denied because while waiting I had
Paula Vallee
My Response:
I can’t really comment on how ODSP will view your eligibility from a medical perspective if you have a part-time job. That is more of a legal/medical question. All I can tell you is how the income you receive will affect your ODSP. The first $200 you earn in a month does not affect your ODSP. For every dollar you earn above and beyond the $200 in each month will reduce your ODSP by 50 cents.
Hi Ron. A person on ODSP who receive CPP from 60 to 65 will have its ODSP reduced. I read ODSP website and ODSP legal advice. Everything. They don’t explain the calculation. Can you find me a website I can read about that to be able to help people who turn 60 +. Merci
I have done my own searching on this topic and couldn’t find a website that explains this explicitly. My understanding is that ODSP benefits are reduced dollar for dollar earned from CPP or CPP Disability. If you think your ODSP may be jeopardized as a result of CPP, I suggest you consult a lawyer who understands the related legislation.
Hello Ron,
This information is very helpful, thank you for providing it. My brother’s doctor has advised him to apply for ODSP and I would like to help him preserve as much as possible of an inheritance he received six years ago from our father. He is now in difficulty: he cannot work because his body can no longer tolerate the medication he needs to take for a mental illness he has had since he was a teenager (he is now 57). From my reading of the Ontario regulations, it appears we would have had to anticipate this at the time I settled the estate, or within six months. However, at the time we had no idea his health would deteriorate so much so soon. Even if I had thought of it I don’t think I would have wanted to say, “Let’s put your half in a trust because of your mental illness” since he has always been proudly independent and managed his finances competently. I still have the paperwork from the estate settlement so could show that his assets did come from our father. Is it really too late? Could we put a sum in one of these segregated funds with myself or his girlfriend as trustee?
Hi Gill,
Whether it is too late for you to set up a trust is a legal question, so I am not in a position to really advise you on that other than to say that you should consult with a lawyer who understands the relevant ODSP legislation. My guess is that, if the estate has been settled, you may have a difficult time of it.
With respect to your other question, a segregated fund account may be an option. However, setting up yourself or the girlfriend as the trustee of the account is another legal question that should really be put to a lawyer. One question I have is, has your brother drafted power of attorney for property in the event that he is incapacitated to manage his own assets? If he still has the capacity to name a power of attorney at this time, I would imagine he could open a segregated fund account without a trustee and if/when he is not able to manage his own finances due to deteriorating health, the power of attorney will allow the appropriate person to manage the account. Again, my suggestion is to consult with a lawyer who understands ODSP.
Dear Ron,
My brother has just made me power of attorney for property (and his girlfriend for personal care) in case his situation gets worse, but naturally wants to manage his own affairs as long as possible. Things like segregated funds are unknown territory for us, but I will try to find out more about them. The information above is a great starting point. Meantime he has been advised by an acquaintance on disability to apply for CPP disability before ODSP and is preoccupied with the paperwork for that. If it looks like he might qualify, I’m glad to know he can consider the segregated funds.
I found your site when googling to find out about disability and assets, and couldn’t agree more that ODSP, CPP disability, and the financial issues around them shouldn’t be so complicated! What do people do who are in a vulnerable state, can’t afford lawyers, and don’t have relatives or friends capable of helping? Anyway thank you for your explanation and advice. Every bit helps.
Hi Gill,
If your brother is eligible for CPP Disability, it important that he applies for that first before he applies for ODSP. My understanding is that if he receives more from CPPD than he would from ODSP, he may very well not qualify for ODSP. The only issue is that ODSP offers health, dental and vision care benefits, whereas CPPD does not provide those same benefits.
Segregated funds are much like mutual funds except that they an insurance investment product provided by insurance companies, only. The management costs are typically higher than those associated with mutual funds, but they offer other benefits such as potential creditor protection, maturity guarantees, death benefit guarantees and the ability to bypass probate at death.
People who can’t afford lawyers or have people around them for support often have a tougher time. If they can advocate for themselves, there are legal services they can access, at least to a certain degree.
I also spend a portion of my time working with clients who have little in the way of financial resources and few people around them to help.
Hello Ron,
I have only one question.I have a cottage in Huntsville(ON)and’m scared of losing it as I’ll go on ODSP.Please tell me if ODSP can compel(force)me to sell the house and on what basis?.
Thank you
Hi Eugene,
Only under certain conditions can you own a property other than your primary residence. I have copied and pasted the following from website for the Ministry of Community and Social Services.
Second Property
An interest in a second property other than the principal residence is exempt as an asset if the Director is satisfied that the property is necessary for the health or well-being of a member of the benefit unit. If the Director does not approve a health/well-being exemption, the property will be exempt as an asset for a period of six months provided that reasonable efforts are made to sell the property and that reasonable efforts continue to be made thereafter if the property remains unsold.
Unless you can demonstrate the cottage is necessary for your health or well-being (or another member of your immediate family – spouse, child) ODSP will not allow you to maintain it.
To be exact, ODSP is not able to force you to sell your cottage. All they can do is revoke ODSP benefits if they do not accept your cottage as a necessity. If you choose to sell it, the next question would be, “What would you do with the proceeds of the sale?” The proceeds of the sale of the cottage would not be an exempt asset unless you use that money to purchase exempt assets.
Ron
Hi Ron, ODSP sounds like a nightmare, this shouldn’t be like welfare, not only are these people disabled but its like the government is looking for excuses so they can to revoke it making them homeless or more of a burden on other people.
The risk of losing ODSP is tossed around constantly and honestly should it be that easy to lose life support? because its nothing less then that and its not easy to get onto it!
It’s like if you’re born disabled and its not overwhelmingly obvious.. you’re a damned soul, i feel for them and i feel like i am in the minority in that regard.
I suggest they make things clear that shouldn’t be such a hard task and i think its worth while and be allowed to make $200 extra a month from any source without having to tell mommy and daddy government all the time out of fear, i just don’t think that is asking to much and it would make a world of difference to these people!
My son has just been approved for ODSP. He is a student at a college in ON. We have money set aside in a RESP account. We have paid for his tution out of our own pocket and would like to take some of the money out of the RESP to offset what we payed in tution costs. However we do not want to jeporadize what he is now receiving on ODSP.
I see that you can have a RESP account and be on ODSP but what are the rules for withdrawing money from a RESP and effecting your ODSP income. Can we take out money from the RESP account and not have this effect his ODSP?
Thanks
Candy
Fundamentally, you have to be able to demonstrate that the money withdrawn from an RESP is used for qualified post-secondary education expenses. I suggest you read ODSP Directive 5.11 – Post-Secondary Education. Just google ODSP 5.11. I think the following exerpt from the directive will help you:
…payments received from the RESP that will be applied by the beneficiary to the cost of tuition, other compulsory fees, books, instructional supplies and equipment, transportation and post-secondary education expenses related to the person’s disability approved by the Director.
So, unless you are confident the expenses paid for by the RESP are covered in the above passage, you can ask for clarification and possibly approval from ODSP for unusual expenses.
Hi Ron,
I don’t have a question for you, but I just wanted to let you know that I stumbled upon your site as I am on ODSP myself.
I read throughout your comments and found them to be straight-forward and very informative.
Thanks for a sound understanding of one living with a restricted source of financial means.
Cheers,
Pat
hello Ron, quick question what happens if an ODSP recipient in absent from ontario for more than 30 days, for reasons other than medical treatment.
thx.
It really depends on the reason for their absence. ODSP also makes allowances for attending post-secondary education outside of the province and for “exceptional circumstances”. One exceptional circumstance may be that you have a very sick relative who you must visit. ODSP directive “2.4 Absent from Ontario,” states the following:
“Attending to family matters outside of the province, such as serious illness/injury/death, can also be approved as an exceptional circumstance. Recipients should provide an expected date of return that is within a reasonable time frame based on the circumstance”
If an absence greater than 30 days is not approved, a repayment may be imposed. If the absence is “an extended period of time” which could be months, an prior approval is not secured, ODSP benefits may be cancelled and an overpayment may be charged as well.
I suggest you read ODSP directive 2.4.
Thank You, Ron!
I am on ODSP and have no extra cash. My Dad died last April and I expect to receive@$140,000. I’m 56 and need to stay on ODSP for as long as I can, as the inheritance has to last until I die. So far, I have found no help from ODSP and no replies from the legal services I’ve called.
My Father didn’t set up a trust, so I assume I’ll receive a cheque from his lawyer. Can I set up a trust for myself? Also, I haven’t bought myself anything new for16 years, what are my options?
Hi there,
You may have a number of options, but they will depend on your circumstances. You may be able to put a portion of it in a trust, but no more than $100,000. Whether or not you can set up a trust is a question for a lawyer. One question you should consider when opening a trust is who would be the trustee?
Alternatively, if you have the Disability Tax Credit, you can put the money into an RDSP. You are allowed to contribute up to $200,000 into an RDSP over a lifetime. Money in an RDSP will not jeopardize your ODSP.
My suggestion is that you contact me directly to discuss your circumstances.
Thanks, Ron.
Hi Ron my name is mark I am on odsp I am 34 and live in the brockville area I am wondering if you can answer a question for me?I have been on odsp for approx 5yrs. just after I started to recive odsp I called my worker and asked if I could apply for a student loan so I could either go back to school or take some home online courses she flat out said no cause it would be an income I even suggested to apply just for school materials and cost of the courses and still she said no tr leger was not for me I did not enjoy trying to do school work with teenagers acting immature that was her only option for me so this last 5 years was pretty well wasted in my opinion I am Kind of confused by it I thought they would be happy that I was trying to get of my butt and better myself i have grade 11 but i want a grade 12 diploma then maybe a trade unlike alot of people i dont want to be on odsp the rest of my life so my question is can you tell me if there are some options for me to get schooling?and was my worker right if you are on odsp you can’t better educate yourself unless it’s free?I am from the east coast so I am not familiar with the school options in ontario thank you Ron………mark
Hi Mark,
According to ODSP Directive 5.10
Loans are exempt as income if used for the following approved purpose(s):
Approved personal loans for training or post secondary education, applied to the training or education costs within a reasonable period of time;
There are a number of other things loans are allowed for. Read the directive.
Simply, a loan can be viewed as income or it can be excluded from income. It depends on the purpose of the loan. It sounds like you may have a case for loan to cover schooling. Largely depends on the details of your situation.
Dear Ron:
Re: RDSP and inheritance..one can receive up to 200,000 and put into RDSP without being cut off from ODSP or is it 100,00
please let me know. thank you
The lifetime maximum contribution into an RDSP is $200,000. In the majority of circumstances, it does not matter where they money comes but there are some situations where it might be a problem. If it is a gift from a friend, family member, proceeds of a life insurance policy or an inheritance, it shouldn’t be a problem. One thing to be mindful of is, if a $200,000 contribution is made all at once, there is no more room to allow for contributions in future years. As a result, there would be no possibility of collecting RDSP Grants in those years.
Hello, was referred to your site by a friend,,,,I recently got married and my husband is on ODSP, he has been enrolled on full time college as of last year september,,,,my concerns are these,,,as wedding gifts we received cash which we deposited in our tfsa,,,it is a bit over the 5k limit and we are worried,,,although part of this will go towards paying off his OSAP loan,,,,what do you suggest we do? I have been Looking into the RDSP,,,as he got a letter about this plan,,,also I am unemployed,,,as I am Currently waiting for my permanent residence and work permit,,,will anything be affected (meaning ODSP support)now that he is married?
Thank you so much for this service,,,as it seems to be alot of red tape, long delays, when we try to get information elsewhere.
Because you are married, the ODSP limit on assets is $7,500. ODSP increases this limit when the ODSP recipient is married. So, as long as you are under $7,500 you are fine. ODSP will look at your assets and income and your husband’s when they evaluate eligibility.
Let me know if you have any questions about the RDSP. It is a great long-term savings plan because of the government contributions. Given the fact that neither of you are working, he is likel eligible for the full Bond which does not require a personal contribution as it is a government contribution for people of low income. If you do open one up and contribute money to it, be aware that you will not be able to touch this money for years to come without significant government penalties. The government imposes these penalties to prevent people from spending the money until later in life (i.e. retirement age in most cases).
Thank you, your reply really helped,,,It seems ODSP is supposed to help nut they do really treat receipiants at times very unfairly,,,and have them tip toeing,,,,I will like your advice on one other issue, last week my husband who is on ODSP got a call from his worker stating he was overpaid as he got non educational funding from his OSAP loan,,,although my husband had ticked he was receiving ODSP funds on the OSAP form, he stilled received it,,,and prior to our marriage,,,he never really looked at his bank statements so he wasn’t aware of extra funding,,,,nevertheless, we understand, the overpayment,,,,but this is where it gets ridiculous, he faxed his t4 to his worker and she saw the non educational funds and says he has to pay in back , 5% of the total monthly from now on,,,and in addition my husband has to pay this amount back anyways to OSAP!!!!!! So we are paying back the same amount twice!!!! We told the worker this and she says she knows,,,I am amazed, angry and confused,,,how is this possible and is this right? Please advise us,,,,thank you
Thank you, your reply really helped,,,It seems ODSP is supposed to help nut they do really treat receipiants at times very unfairly,,,and have them tip toeing,,,,I will like your advice on one other issue, last week my husband who is on ODSP got a call from his worker stating he was overpaid as he got non educational funding from his OSAP loan,,,although my husband had ticked he was receiving ODSP funds on the OSAP form, he stilled received it,,,and prior to our marriage,,,he never really looked at his bank statements so he wasn’t aware of extra funding,,,,nevertheless, we understand, the overpayment,,,,but this is where it gets ridiculous, he faxed his t4 to his worker and she saw the non educational funds and says he has to pay in back , 5% of the total monthly from now on,,,and in addition my husband has to pay this amount back anyways to OSAP!!!!!! So we are paying back the same amount twice!!!! We told the worker this and she says she knows,,,I am amazed, angry and confused,,,how is this possible and is this right? Please advise us,,,,thank yo
Hello. My brother is 55 years old and has had a lifetime mental disability,that has only recently been formally diagnosed. We are in the process of applying for ODSP and the Disability Tax Credit. We want to open a RDSP for my brother but a friend suggested its too late and that it should have been opened by age 49 for the government to make contributions. Have we lost that window of opportunity? Thanks
Your friend is right in that the government will not provide any contributions to the RDSP. However, there may be benefits to opening an RDSP even though your brother is in his 50s. If he has any money exceeding $5,000 the RDSP may be a good place to put it as it is an ODSP exempt asset. Also, any money withdrawn from an RDSP is not subject to ODSP income restrictions. So the money can be used for anything as long as it is not used to purchase a non-exempt asset that pushes him over the $5,000 asset limitation. Example: if he has $4,000 in the bank and he takes $3,000 out of his RDSP, he should be able to use it for a vacation without issue, but he could jeopardize his ODSP if he purchased a mutual fund with it. Please do not take this a financial advice. It is important to consult with an advisor on the particular situation and possibly talk to an ODSP representative where appropriate. If you have specific questions, please feel free to contact me by phone or email. My contact information is on my website.
Hello Ron,…I’m hoping you can answer a few questions…I am currently on ODSP and my son lives with me on a full time basis… So 1st I’ll like to share that sometime in the future I’m expecting a settlement from an accident in the amount of approximately $100 000..however if I receive more I’m under the impression that anything more has to be paid back to odsp unless the director approves it which in most cases its unlikely when u receive such a lump sum…However I would like to buy a home with this settlement I receive and need to know if this is an option or not? Also if it is possible, since equity of homes rises, would this cause a problem in the future and have to sell my home? Also what happens if I ever decide to sell, would I have to pay anything back to odsp if the equity of the home is more then $100 000? Lastly, we are also part of the HOUSING program and my rent works out to be under $250/monthly however I’m aware that my eligibility for rent is higher if needed, I believe close to $800 through ODSP,,so If the possibility of buying a house with my settlement is an option, would I receive close to the full amount or the full amount for the mortgage/heating/water/taxes/insurance or how does ODSP work when owning a home??
Unless you get the director to approve the amount in excess of $100,000 there could well be be issues with your eligibility coverage. Getting the director’s approval is not a process I am appropriately familiar with to provide guidance; this question is best suited for a lawyer to answer. I can put you in touch with lawyers I believe have experience in this area. Please contact me directly, if you would like some names.
Generally, you are allowed to own your own residence and be on ODSP. If it is purchased with the first $100,000, I don’t think it would be a problem. Since you are receiving an injury settlement, I would check that with ODSP. ODSP rules are different when an injury settlement is received. Also, you have to be careful that the associated costs of owning the house (i.e. mortgage, taxes, upkeep, bills, etc.) do not exceed your ODSP monthly benefit as that could put you into financial hot water. ODSP may even question the viability of it.
If you are allowed to own a residence, it won’t matter if the value of the home increases. However, if you sell the home and decide not to buy another home, the proceeds of the sale of your home could threaten your ODSP. I have clients who have faced this situation. In most cases, I have been able to restructure the money in ODSP exempt assets in order to safeguard the ODSP.
I urge you to speak to a lawyer about your circumstances. Your questions are much more suited for a lawyer to answer.
PS..when I receive the settlement do I have a time limit on how quickly I have to spend it without being penalized or have my ODSP cut off???
Thank you in advance,
Mike
I am not sure of the answer for this question. Better to consult with a lawyer who understands the relevant legislation.
I will like your advice on one other issue, last week my husband who is on ODSP got a call from his worker stating he was overpaid as he got non educational funding from his OSAP loan,,,although my husband had ticked he was receiving ODSP funds on the OSAP form, he stilled received it,,,and prior to our marriage,,,he never really looked at his bank statements so he wasn’t aware of extra funding,,,,nevertheless, we understand, the overpayment,,,,but this is where it gets ridiculous, he faxed his t4 to his worker and she saw the non educational funds and says he has to pay in back , 5% of the total monthly from now on,,,and in addition my husband has to pay this amount back anyways to OSAP!!!!!! So we are paying back the same amount twice!!!! We told the worker this and she says she knows,,,I am amazed, angry and confused,,,how is this possible and is this right? Please advise us,,,,thank you
Hey Ron just wondering I do quallify for odsp but not sure if my wife’s salary effect it could yo let me no
Yes your wife’s income will be taken into account by ODSP in order to determine if you are eligible for ODSP. Also, assets she holds, you hold or that you hold together will be considered by ODSP for eligibility purposes.
Dear Sir,
My mother has recently died in a fire at our home.I am on ODSP and lived in the upper apartment. The home and all her belongings have been left to me. The home will be repaired in about six months time. All of the furniture and personal belongings have been removed due to smoke damage. I will be given a settlement for the belongings. It is now an empty home, nothing left for belongings. Will this be exempt from being taxed or punished from ODSP. Can I inherit the home? I will not be able to move back in until the fall of 2014. Could I take the settlement for belongings and pay off the mortgage and other bills owed by my mother’s estate? If you could at all help me with any of these questions, I would be grateful. I’m very much overwhelmed at present. Thank-you sincerely, JS
I am really so sorry for your loss.
I can’t speak to any tax implications, but I don’t see any at this point – best to consult with an accountant regarding possible tax implications.
You are allowed to own the home that you live in. If you inherit the home and live in it, that should be fine with ODSP. If you choose not to live in it, it could threaten your ODSP.
Did your mother have a will? Is it safe to assume that the contents of the home belonged to her? Who is the executor of her estate? I am assuming the proceeds of her estate needs to pay off any debts she owed at death. Do you have a lawyer helping to settle the estate? You should work with the lawyer to best figure out how to deal with the estate, debts and the possible impact on your ODSP.
I would hope that ODSP would show compassion, given the circumstances. It is not unusual for them to provide special dispensation when the circumstances are as serious and difficult as yours.
I would like to know if I will be in trouble for purchasing a vehicle while on ODSP. The vehicle is in my name and the loan is in my name and a close family friends name . Since my credit was good enough I thought this would be a great way to improve it since I have never purchased anything of value in my name. I actually do not pay the monthly payments on the Truck the friend does. Question 2 I just finished College and started a new job 2 months out of school when I was stricken with Cancer .Initially I was not on ODSP because I was married but during my illness my husband left me /divorced me and I was raising our 14 yr old daughter so after our divorce which I walked away with not a cent I applied for ODSP. Long and short of it I never had the opportunity to repay OSAP and now I’m trapped on ODSP I would like to know if I’m entitled to retraining for something I can do because of limitations and complications of Cancer my training in Policing is no longer viable for me.
ODSP allows recipients to own a vehicle for personal use without affecting their ODSP benefits. Since your friend is paying for the vehicle, I suggest you review this with your ODSP worker to make sure there are no issues with this. I don’t think there should be an issue, but you may want to make sure with your worker. If you don’t get a satisfactory answer, I suggest you review the policy directives, ask to get clarification from the worker’s supervisor or even speak to a lawyer who has a very strong understanding of ODSP directives and the relevant legislation.
With respect to retraining, ODSP offers “Employment Supports” there are government funded employment programs you should be able to utilize. Many not for profit organizations offer these programs. You can talk to your ODSP worker about finding an appropriate one and you can google “ODSP employment supports service providers”. Do the research and find the program that you think best fits your needs. Remember, you are the client. Even if you don’t pay for the service, you are the client – the service provider often needs you and other clients to continue receiving funding from the government.
iam currently on odsp due to an auto accident. I received $100,000 from insurance which is exempt from odsp charges. is it possible for me to buy a house in nova scotia and use it as a holiday home and still be eligible for my odsp allowance. I am putting down $30.000 towards the house in nova scotia.
regards from southern ontario
ODSP allows you to own the home that you live in without jeopardizing your ODSP. Under certain circumstances, ODSP will allow recipients to own an additional property, like a cottage, without jeopardizing ODSP benefits. However, you have to demonstrate that the property is required for the health and well-being of a member of the benefit unit.
The following is an exerpt from ODSP Policy Directive 4.1 Definition and Treatment of Assets
So you need to get approval from ODSP to maintain this property and remain on ODSP. By no means is it automatically viewed as an exempt asset.
Also, if you are out of the province for more than 30 days, you could lose your ODSP income benefits. The following is an exerpt from ODSP Policy Directive 2.4 – Absent from Ontario
So, if you are outside of Ontario for more than 30 days, you could lose income support unless you are able to demonstrate to ODSP to their satisfaction that you needed leave the province for more than 30 days.
Hope this helps.
Hi Ron. Thanks for the good advice and comments. My son who is on ODSP has listed his house for sale. Neither his health or finances allow for the purchase of another principle residence in future. After expenses, disbursements and mortgage repayment the net proceeds will be approximately $25,000. We understand that this could be invested in a trust (as it is under the $100K limit) and that this can then be disbursed over time into a RDSP in order to maximize government grants, all without affecting his ODSP eligibility. A trust is expensive to set-up and maintain. Could a segregated fund be used to the same effect instead of the trust?.. thank you
Opening a segregated fund account is something I would suggest you consider pursuing, but I can’t tell you if it is an appropriate vehicle without a better understanding of your circumstances. I would need to speak to you directly before I felt confident segregated funds are the right way to go. While I can say segregated funds are something to consider, I can’t provide definitive financial advice on my blog. Please feel free to contact me directly to discuss.
With respect to setting up a trust, I actually don’t believe your son could put the proceeds of the sale of the home into a trust even though it would be under $100,000. The following is from ODSP Policy Directive 4.7 – Funds held in trust
The trust you are speaking about can only be funded by the proceeds of a life insurance policy or an inheritance. A person applying for ODSP may not sell a personal asset and transfer the proceeds to a trust in order to satisfy eligibility requirements.
I hope this helps.
Hey there, I have a question. I am disabled. My doctor says I am a good candidate for ODSP as I cannot work due to my illness. I have not applied yet because I think that it is likely I won’t get anything. You see, my wife earns a good salary. However, given that I am completely financially dependent on her and have a large student loan debt which she is paying off, (on top of her own debts) we are having trouble keeping on top of bills, and her retirement is not looking good. Do you think it’s at all likely that I would receive even a small monthly amount that I might be able to contribute to student loan debt payment? I’m pretty much a burden and anything would also go a long way with respect to improving my feelings of personhood/autonomy as a disabled person!
I wish I had a better answer for you but, ODSP will look at your wife’s income and assets as well as yours in order to determine eligibility. Unless you demonstrate financial need in accordance with ODSP directives, you will have a tough time securing ODSP. There are those who believe that a spouse’s income and assets should not be taken into account as it discourages people from entering into marital or common-law relationships and places many spouses under serious financial hardship, however ODSP directives insist that a spouse’s income and assets are considered at time of application.
I received an inheritance which was put in a Henson trust/ If I get money from this trust do I have to report ot the ODSP what I spend it on.
I would suggest you do keep track of what you spend the money on. An ODSP recipient is allowed to receive $6,000 every 12 months for non-disability related items and expenses from sources other than ODSP, including gifts and money from investments (the RDSP is an exception) and trusts, including Henson Trusts. If you go over that $6,000 amount, you may jeopardize your ODSP benefits. However, money from a Henson Trust that is used for disability related items and expenses is not subject to that same rule. In other words, there is no limit on how much money is used for qualified disability related items and expenses. You should check with ODSP if you want to know if a particular item or expense is considered to be a disability related item or expense before you even receive the money from the Henson Trust or any other source.
I was left an inheritance in a Henson trust. If I get money from that trust do I have to report to the ODSP what I spend it on/
ODSP will want to know how much money you receive from the Henson Trust. They may likely want to know what you spent it on, especially if you receive more than a total of $6,000 from the trust and other sources including but not limited to gifts from others, money from another trust, money from segregated funds. An ODSP recipient is not allowed to receive more than $6,000 for “non-disability related expenses”. Money used for “disability related items and expenses” is not included in the $6,000 per 12 month allowable limit. Money received from an RDSP is treated differently by ODSP and income is also subject to different rules. Some people find these rules confusing. What I have written is an overall, somewhat high-level explanation. If you need more specific advice, please feel free to call me directly.
me and my partner are having a child im on odsp but me and him dont live together yet not till baby is born. But i am going to claim him but he works he makes 18 hundred a month will they cut me off odsp if they take half of what he makes how much will i get from odsp
Hi im 22 my dad give me a car to years ago it starting to go and now im looking for a new one mosly a truck shood odsp help me with that pleas let me know brandon
I don’t believe ODSP will help you with finding a new car and I do not believe they will help you pay for a new car.
Hello, is it true that if you have locked in GIC acounts the amount invested here is not considered assets by the odsp ?
A locked in GIC is not considered an exempt asset by ODSP, unless it is in a Locked In Retirement Account (LIRA)and the ODSP recipient is under the age of 55. If it is not in a LIRA and you want to move it, there are options to safeguard your ODSP. You can consider segregated funds or an RDSP. I strongly suggest you consult with an experienced advisor first. While some GICs are “Locked in” you can usually cash them out, but you will lose the interest if it has not matured. If the bank says you are not allowed to withdraw the money until the GIC matures, you should be able to get special dispensation to move it if you explain that you may lose your ODSP unless you are allowed to move the money to a different type of investment. Again, please speak to an experienced advisor before taking action. You can contact me directly to discuss your situation.
I have read all of the posts and answers that I will definitely be getting my BF of 15 years to read it over with me once more.
I’m on ODSP. I want to marry him. Hi income is approx. 39000 after deductions.
I work a part time job just to have a few extra dollars in my own pocket.
We rent an upper floor of a house and would like to buy one ourselves if we could.
I’m hoping you’d be able to shed some let on what I can do etc..
thank you.
I am glad the posts have been helpful. As an ODSP recipient, you are allowed to own your residence. A personal residence is an ODSP exempt asset. However, I am not suggesting that owning a residence is what you should necessarily do.
I understand people want to own a home for personal reasons and I respect that. We do not make buying decisions solely based on financial calculations. However, I do think looking at the numbers before you buy is important.
From a financial perspective, it is important you are able to manage the costs associated with maintaining a home. Mortgage rates are incredibly attractive right now (2014), but you have to ask yourself if you will be able to manage the mortgage payments if they rise. I am not sure when the mortgage rates will rise, but I am pretty sure they will at some point, probably within the next few years. I believe that many people owning homes today will face some serious financial challenges as interest rates rise and their mortgage payments stretch if not break their budget.
In addition to mortgage payments, home owners have property taxes, monthly bills and maintenance costs to deal with. When you own a home and your furnace needs to be repaired or replaced, the owner is on the hook to cover that cost. If you rent, many if not all of these costs are the landlord’s responsibility.
From a numbers perspective owning a home may make better sense than renting, but not necessarily. In other situations, renting can make better sense. When you hear people say, “I paid $400,000 for my house and it is now worth $500,000” it does not mean they made $100,000 because they have or will pay much more than $400,000 for that home. To calculate the amount they actually gained (that is if they actually could sell the house for the amount they claim their house is worth) you have to take into account, mortgage interest payments, property tax, monthly bills, repairs, not to mention the legal and real estate costs associated with selling a home.
Renting can make more sense, financially, depending on how you manage your money. If renting saves you a few hundred dollars a month, it starts to make a lot of sense if you invest that savings in a retirement fund or some sort of asset that will hopefully grow in value. If you simply spend the money and have nothing to show for it, renting becomes less attractive, at least from an asset accumulation perspective.
If you want to discuss your situation, please contact me directly. I would be happy to discuss and help if I can.
Hi, I am looking forward to buy a car but I can’t buy one that cost more than $5000. I have a season job and I am planning to buy a car that cost less than $9000. Is it possible for me to buy a car or I can’t buy more than $5000? Please help. What happen if I am planning to buy a car that cost about $9000 (I found a car that I like), I am using my work money and some supports from ODSP. Is it a risk or is it okay? thanks
An ODSP recipient is allowed to own a personal car and remain on ODSP.
Hi
I am on ODSP and will be inheriting funds. Could I use this inheritance to purchase a house. I am an beneficiary of a Hensen trust fund. Do I need to put the inheritance in this trust fund then withdraw for a house purchase. I am splitting this house purchase with my sister who is not on ODSP.. She will be paying the majority of the house purchase. Can we be split owners?
Hi Lynne,
I can’t provide specific advice to your questions. I would need to have a conversation with you to do so. In the meantime, the following should hopefully clarify a few things.
If an inheritance is left for you and it is to be directed into a Henson Trust, the trustee (or trustees) of the Henson Trust control those assets. Legally, the beneficiary (in this case, you) does not have control over those assets. If the beneficiary did have legal control of the funds in a trust, those assets would be seen as the beneficiary’s assets and, as a result, threaten their ODSP benefits. That being said, there is nothing stopping a beneficiary of a Henson Trust from talking to the trustee about purchasing a home.
As a person on ODSP, you are allowed to own the home that you live in. If you own it with somebody else, it may affect the amount of money you receive from ODSP, especially if they own the majority of the home.
Ron I love this site.
My question is I will be applying for ODSP as I can no longer walk , but my wife has an RRSP and she shouldn’t be penalized as we have only been married two years and she was saving well before that.
Should she transfer her mutual funds in RRSP into segregated funds within an RRSP? Will this help her maintain what little she has while I apply for ODSP?
Thank you for everything you do for us!
Hi Michael,
ODSP will look at your assets and your wife’s assets as well when evaluating your eligibility for ODSP. If you and your wife have more than $7,500, collectively, in assets that are not ODSP exempt, you would not likely qualify. Unfortunately, it doesn’t matter when your wife contributed to her RRSPs
If you and your wife do not have life insurance policies with cash value and neither of you are the beneficiaries of any trusts, segregated funds may be something to consider. I can’t tell you definitively if that is your best course of action without knowing more about your situation. I can say that I have successfully helped others purchase segregated funds inside an RRSP in order to satisfy ODSP asset limits.
Hi Ron, I’m currently receiving ODSP and like you’ve explained it’s pretty hard to try and get ahead when you’re stuck in a situation that is hard to get out of when you’re dealing with about $1000 a month. I want to go to school to upgrade myself and try to make a dull situation into something better however because I have limited funds which basically cover my rent and food I’m also in debt because I simply can’t afford to pay it out. I have a couple credit card debts from years back and an OSAP debt which was acquired before I fell ill and because I want to go back to school I wanted to know if there were any grants available to someone like me on ODSP? I’m trying to get my life back on track and into a better situation however it’s posing to be very difficult and I just don’t know who to talk to and how I should even go about putting my ideas in to process. My case worker isn’t the friendliest of people either so I try to avoid talking to her unless need be. Any help or advice from you would be greatly appreciated.
Thank You
Kristine
Hi Kristine,
I don’t know of any grants that you could access to pay off your debts and from what I have read, OSAP does not forgive outstanding debts even if you are on ODSP. However, as an ODSP recipient, you are eligible for employment support programs and possibly educational upgrading programs. I suggest you start by googling ODSP employment supports. There are many government funded agencies that offer programs specifically geared for people on ODSP. I also suggest you google Employment Ontario as this is another government funded program offered by many agencies throughout the province which you would also qualify for if you are not working or not working many hours.
Hi Kristine,
I don’t personally know of grants that could help you out, but maybe you should look at grants offered by the schools you are interested in. I wish I could be of more help.
Hi Ron,
My parents have been with ODSP for 10+ years and have received 100,000 that ODSP has exempted. They are now considering purchasing a house and i’d like to be part owner of the house to help them with mortgage and bills. I currently don’t live with them am 25 and make roughly 30,000 a year. My question is would the 50 cent on a dollar affect me since i am their child and will be living with them, or are there any other things i should know.
Thank you,
Mike
Hi Mike,
This is more of a legal question, but here are my thoughts. Would you be living in the house with them? If you do end up living with them, I do believe your income would affect their ODSP. I am not sure to what extent, though. To be clear, it would not affect your income. Your income would possibly reduce their ODSP.
Hello Ron. My question concerns a client that was informed that the ODSP caseworkers have the right to retrieve all spending i.e. “where the client spend their funds”. I find this a breach under the Canadian Privacy Act as well as her rights in the Canadian Charter of Rights and the Human rights Act. Can the ODSP divisions request this information lawfully? I believe that where one spends their monetary resources is their business and has no specified value to the ODSP caseworkers. Can you please elaborate on this issue.
Respectfully, Chaplain R. Manning
Hi there,
You concern is really a legal one which is not my expertise. What I can say is this. My understanding is that, in order to receive ODSP, you need to consent to the disclosure of your financial information. The reason why they want to see what she spends her money on is to determine if they are disability related expenses, non-disability related expenses or exempt expenses. These different types of expenses are treated differently by ODSP. ODSP is a means-tested benefit. It is not just about having a disability; it is also about financial eligibility. In order to evaluate the financial eligibility piece, they need access to a recipient’s financial information.
As an example, if your client invests her money in stocks and the value of those stocks exceeds the asset limit, she can lose her ODSP. She has to disclose her holding to ODSP so they can calculate her total holdings.
Thanks,
Ron
HI Ron,
My dad passed away a few years ago leaving my mom in a bad financial spot and a house she could not maintain with her disability. She went on ODSP and her $800 a month wasn’t enough for her to keep her house/bills. She sold it and moved into a condo (paid for with sale) but now she has $40000 left that she put in a GIC. ODSP called yesterday telling her that they are cutting her off beacuse she has “money”.
What can she do/or where can she put it. It’s for her future and all the “just in cases” that life throws at us.
if there is no where to put it..Can she give it to me as a early inheritance?
Any advise you can provide would be wonderful 🙂
thanks
Hi Lisa,
Sorry to hear about your father. I am sorry for your loss.
There may be a couple of things you mom could do with the $40,000. It partially depends on how old she is and if she qualifies for the disability tax credit. If she is under the age of 60 and is not turning 60 this year and has the disability tax credit, she might want to consider a Registered Disability Savings Plan, which is an ODSP exempt asset. Alternatively, a segregated fund account may be an option as, under certain circumstances, she is allowed to hold up to $100,000 in seg funds without jeopardizing her ODSP.
She can’t give you the money as an early inheritance to reduce her assets. This is called dumping assets at less than fair market value which ODSP does not view as an acceptable strategy.
Thanks,
Ron
Dear Ron, I want say thank of all you advices, only very nice guy like you do and need as vulnerable or sickens person. you do it without selfish and envy, that kind the professional we need in Ontario and Canada.
My first question my friend go to receive CPP-disability and he is already in ODSP, he not want reduce his Money from ODSP, what he can do.
the second question is how he can open Registered Disability Saving Plan?, the Banks know about it?
Thank you for the help, my good bless you and take care
Justo
Hi Justo,
There is nothing your friend can do to protect his ODSP from reducing because he receives CPP. For every dollar he receives from CPP, his ODSP is reduced by one dollar. As long as your friend has the Disability Tax Credit, is not turning 60 years old or older this year, and is a resident of Canada, he can open an RDSP. The banks do offer it. I also open and manage RDSPs for my clients. He may want to contact me to discuss the RDSP. I hope this helps and thank you for the kind words.
Ron
hi,ron,
thank your previous information, I am on ODSP, my wife and I want to borrow some money from my friend to buy a house, we can afford this money and later maintain this house, will this behaviour jeopardize my ODSP.
thanks
Hi Peter,
ODSP policy directive 5.10 states that “Loans are exempt as income if…applied to the purchase of an asset exempt under section 28 (1) of the ODSP Regulation.” Section 28 (1) of the ODSP Regulation states:
28. (1) For the purpose of section 27, the following are not included as assets:
1. Subject to paragraph 2, a person’s interest in the principal residence for the benefit unit.
2. If a person has an interest in property that includes his or her principal residence and the property is normally used for a purpose other than as the principal residence for the benefit unit, that portion of the interest in the property that may reasonably be regarded as attributable to the principal residence, as determined by the Director.
So, if you plan to live in the home and you do not use it for purposes other than living in the home, the loan to pay for the home is allowed.
However, I do not know how ODSP will view a loan from a friend. I would imagine ODSP would want to see documentation of the loan. I do not know if they need the loan to have specific characteristics, such as an interest rate, stipulated payment amounts, and/or state length of term.
I suggest you might want to talk to a lawyer who understands the relevant legislation and/or speak to ODSP before you proceed with the loan.
Hi Ron. Great job you are doing. Hip hip hurray to u. I am on o.d.s.p and received a 66 thousand dollar inheritance. Can I purchase a house with 40 thousand of it and put the rest in my 14 yr. old sons bank account for his future schooling expenses ? Or, if I buy a house with the 40 and then start a RDSP account ( I’m 57 end of yr.) can I take out 6 thousand a yr. from the RDSP for travel etc? Or, should I put the 26 thou. Into a segregated fund and withdraw 6 thou. A yr. for various things with out affecting my odsp monthly amount benifits? Thanx again , your a true humanitarian. Ben.
Hi Ben. Thank you for your kind words. I can’t really give you specific advice in a blog post. We would need to talk directly. However, I can say that you should not put the money in your son’s name. ODSP could easily see that as dumping assets in order to qualify for ODSP. One of the advantages of an RDSP is that any money that comes out of it is not subject to the limit of $6,000 every 12 months for non-disability related items and expenses set by ODSP. If you want more clarification, please contact me directly. Thanks, Ron
Hi Ron, I have read all your comments and replies and found them very informative, Thank You.
However I have a question regarding my son who recently got on odsp. He was initially refused odsp support and went through the appeals process which lasted almost 2 years.
He was finally approved after going to the appeals tribunal.
He therfore received a retroactive cheque for $14000.00
This however created another problem for him as he now has more than $5000.00 in assets. His case worker has given him till 31 January 2015 to reduce his assets to $5000.00
We do not think he qualifies for the disability tax credit as his psychologist has dismissed it in the past. This would prevent him from opening a disability savings plan.
Would a segregated fund be an option for him?
He is 40 years old and living at home, what would be an appropiate amount to charge him for board that odsp would accept? He is receiving $800 fron odsp and working part time earning about $400 a month.
Thank You and appreciate the time you take to help
Gary
Hi Gary,
Thanks for your post. Yes I think a segregated fund account may be an option for your son as long as he has contractual capacity to manage his own finances. With respect to how much rent you should charge, my understanding is that rent should equal the full amount of his shelter allowance from ODSP. However I also believe you need to demonstrate that he purchases and prepares his own food as well.
In your previous replies, you stated that if a person receives an inheritance, they can put the inheritance into RDSP as long as the $200,000 limit is not exceeded. Where on the ODSP website does it say this. I have seen that inheritance can be put into a trust in Ontario Disability Support Program – Income Support Directive 5.1.
However, I haven’t seen something similar for putting an inheritance into RDSP. Can you point me to where it states it.
Is there any chance that one could lose the ODSP benefit permanently? The inheritance is only about $30,000 so we won’t run into the $200000 limit.
Brian
Actually directive 5.1 near the bottom of page 5 speaks about the RDSP. Also directive 4.1 states on page 14, “All funds held in an RDSP are fully exempt as assets.” Finally, directive 4.10 is entirely dedicated to the RDSP. If you put the money into an RDSP (as long as the ODSP recipient is eligible for the RDSP), this should not impact their ODSP eligibility unless and until they lose their eligibility for the RDSP.
With that being said, I strongly suggest you consider depositing at least a portion of the inheritance into a different exempt asset, such a a non-discretionary trust or a segregated fund account, especially if the beneficiary is eligible for RDSP Grants in future years. If all the money in put into the RDSP and there are no other sources of money to make contributions in future years, they may lose out on collecting RDSP Grants. One strategy to consider is leaving a significant portion of the inheritance in segregated funds and/or a non-discretionary trust from which future year RDSP contributions can be made and thus continue to receive RDSP Grant contributions from the government. Also, if the money in the inheritance is needed for items and expenses sooner than later, the RDSP is not necessarily the best option because of the significant withdrawal penalties that may be imposed when withdrawals are made.
There are a number of factors that need to be considered before one decides where the money should be placed. The age of the ODSP recipient, their immediate and future financial needs, and their contractual capability are factors, to name a few.
Thank you for your comment. You have raised a very important situation I see regularly that is not as straight-forward as we wish it to be.
Dear Ron:
I recently applied for ODSP, and with all the horror stories I have read and heard about applying for and qualifying for ODSP, I am really scared that I may not get it. I had some money in a rrsp and transferred it to a Henson Trust Fund, in reading about qualifying for ODSP and the information on Trust Funds and what is accepted and not accepted, would my Henson Trust Fund be excluded from this category? and is it a detriment to my case.
As long as the Henson trust is set up correctly and that the trustee is not you the assets that were originally in the trust.
You mentioned that you transferred some of your own RRSPs into the Henson Trust. That is something you are not allowed to do. ODSP would take issue with that. You can’t put your own money into a Henson Trust if you are the beneficiary. You should consider an alternative ODSP exempt asset.
Hello sir ,
I want to know if my parents can buy a house with down payment in ODSP and if they can then are they still going to pay the house repair by their self and property tax??
Thanks in advance
I am not sure if I fully understand your question. However, if a person (or married couple) is on ODSP, they are allowed to own the home they live in. Yes, your parents would still be responsible for the maintenance, repairs, and property taxes for the home.
I have a question that I need help with.
My boyfriend, when married had opened a type of investment (unsure which one) which was for his 2 children’s future education. In each of the 2 investments he deposited $2500.00, and understood that it was matched dollar for dollar by our Canadian Government (Sudbury Ontario) this took place in 1998 and his oldest was 2 and youngest was just born. Meaning each child started with $5000.00 ($2500 from Dad $2500 from Government) he has since separated in 1999 and basically forced out of an financial goings-on and believes he was tricked into signing his name off as title owner of his children’s investments, (she slept with the financial and loans officer that opened this investment for the children) and tricked him into believing her ex-husband was in the car out in parking lot and didn’t want to come into bank to sign investment title name switch, but she would be more that happy to take forms out to car and have him sign them there!!!
AS YOU GUESSED….he wasn’t in the car, she forged the signature. for the record HE lost his job but we didnt know this change was for all investments not just for her ex-husbands 17000.00 investment (which matured just the month prior) it meant the kids investments too!!! what I want to know is what type of investment is matched by Canadian government dollar for dollar (back in 1998) and could you give me an idea on value if it only had the $5000.00 put in 1998 and left untouched for 16 yrs.? oh one more thing….the youngest child’s investment, if it was to be untouched till age 18 (he is 16 now) is there a chance it is still there. My boyfriend is much too afraid of outcome (being she spent it all) and feels better left alone, he knows in his heart its gone but if he were to go to bank, the results are final and it would hurt him to know that his ex-wife would do that to her children. thanks hope this isn’t too complicated
Chris
You are probably thinking of the Registered Education Savings Plan, however the government does not match dollar for dollar. They match 20% up to an annual maximum. I can’t tell you what it would be worth today. It would depend on how it was invested.
Hello Mr. Ron I want ask you.. I am on ODSP and I have brother who want put down payment for me for buy a home…can he do it for me and how much he can put? thank you
Hi Irina. A relative can provide a down payment for a home for you as long as you live in it. There is no limit other than the actual cost of the home. I really suggest that you speak to a financial advisor or lawyer who understands ODSP before you do so. Will other people live in the home? Will your brother live in the home? Will your ODSP cover the cost of the mortgage and other home related expenses? All of these are important questions I think you should explore.
Hi Ron,
If I own my own home, can I rent out a room and declare that as income? my current thinking is that if I rent it out, it could be declared as income. Now since I would lose any rent benefits since I own my home outright, is it possible to simply declare a boarder and gain the first 200.00 then 50% of the rest???
Hi Doug. I think you are referring to your ODSP Shelter Allowance. I don’t think you should lose your shelter allowance since you own your home outright. The Shelter Allowance will still help cover other related expenses such as property tax, heating and other utilities. From what I have read in ODSP Policy Directive 5.1 “Definition and Treatment of Income,” only 60% of gross income for renting self-contained quarters (i.e. a separate apartment in your home) is considered income. If you are providing lodging (i.e. renting out a room), the greater of $100 or 60% of gross income received for providing lodging without meals is considered income. If you are just renting a room, the amount above and beyond the $100 or 60% is not considered income. I suggest you read ODSP Policy Directive 5.1 “Definition and Treatment of Income”
Hi Ron,
I was wondering if you could help me with this issue. I live with my parents and receive ODSP and would like to move out. I am on a waiting list for Ontario housing, but that might take years to get.
If I get a down payment from my parents, for a small townhouse once they sell their home, would that affect my ODSP? for the down payment received. Also would I be able to own the home without it affecting my ODSP?
Thank you,
Tony
You are allowed to own your own home as long as you live in it, without jeopardizing your ODSP. However, if the expenses to maintain that home exceed what you are receiving from ODSP by a significant amount, ODSP may wonder where you are getting the money from to support the costs of the home. Also, I suggest you talk to your ODSP worker about receiving the money from your parents before they actually give it to you to make sure you handle the receipt of that money appropriately.
What am I liable for? Husband disabled with terminal illness. ODSP overpayment. Husband died. Estate insolvent.
What am I responsible for as his widow?
Hi There. This is more of a legal question than I financial one so I am not able to provide you with appropriate guidance. However, I suggest reading the following piece which discusses a court decision that confirms ODSP overpayments can be waived for a number of reasons, including financial hardship. http://incomesecurity.org/documents/Surdivall-Overpayments.pdf
I don’t know what region you are in, but you might want to connect with a legal clinic in your area. Arch Disability Law in Toronto is one that I have directed people in the past when they don’t have the funds for a lawyer.
I’m on OW and my boyfriend will be moving in with my kids and i before we get married in August.Will it affect my OW or his ODSP?thanks
If he moves in, ODSP will want to know about your income and base his ODSP benefits on your collective income. Since you are on OW, I doubt his ODSP will be reduced. I do not know how your OW will be affected, but I imagine they too will look at your collective incomes to determine if you can continue to receive OW. I am not as familiar with OW as I am with ODSP.
Dear Mr. Malis,
Love your website. Just wanted to ask…I am on ODSP and live with a parent in a condo, which will be transferred to my name upon my parent’s passing. My parent’s will has been set up so that I can sell this condo and buy another one (within a specific set of time, I think). I will also be inheriting some money which will go into a Henson Trust.
I would like to use a part of this inheritance to add to the proceeds after selling the condo I live in now, to purchase another condo to live in. Is this possible?
Thank you very much,
Linsa
If I understand you correctly, you will want to use some of the money in the Henson Trust to supplement the proceeds of the sale of the current condo in order to buy another condo of higher value? If that is the case, I don’t see why not, subject to the approval of the trustees of the trust, since they will have absolute discretion over the trust. I have a sense there is more to your situation so it difficult for me to say if this is a wise strategy or not. I highly suggest that you consult a financial advisor and possibly a lawyer who has an understanding of ODSP before you proceed with this strategy. There may be other options for you to consider.
Hi,
After a long process, I was recently granted odsp benefits for the next two years. This all stems from a car accident. I will be receiving $30,000 from the insurance company and I was confused as to how this works. I’ve read some of the directives regarding settlements and from what I got out of them, they will not count this as income… Is this correct? This money will mostly be used for treatment and to pay back the debt I’ve incurred from being unable to work. Will they cut off my odsp because of this small settlement? Or, was I reading the directives correctly, and it won’t affect it.
Thank you kindly.
the proceeds of a personal injury claim are treated differently. First let me say that I would suggest you speak to a lawyer who has expertise with this aspect of the law. However, you are right about the first $100,000 unless the award is for lost wages. If it is for lost wages, ODSP may see it as income.
Also, if you invest them money, the returns on the investment may not be treated as exempt unless the investment itself is an ODSP exempt asset.
Hi Ron,
yours is the first site I’ve found which may be able to answer my question. Both my husband and I are disabled with injuries of the spine, mine is recent, I was receiving benefits through a work disability insurance plan that will end next week and start up again in 15 weeks from then, my husband has applied for odsp. My question is how will odsp treat these benefits I receive and and what is the breakdown of financial assistance for a family of five (3 children under 17) receiving 1,560 per month. I feel badly that it’s not enough to live on, but my rent alone is half that amount….can you answer my question? Is the blue cross benefit considered income?
I would assume ODSP would treat your disability benefits as income. Determining how much money you will receive from ODSP is a somewhat tricky thing to do as there are a number of dependencies. I suggest you look at the following ODSP directives: 6.1 Basic Needs Calculation – Ontario and 6.2 Shelter Calculation
Hello Mr. Malis,
I am, hoping to get your help with this issue. I will receive a settlement soon from a car accident. Will I have to report this money to ODSP? Will ODSP, cut me off from receiving monthly payments that I receive currently. Is there a way I can keep or use this money for something else, without losing my ODSP funding per month? For example, can I put this money towards a down payment for a house?, without jeopardizing my ODSP. Can I also put it into my RDSP and not be penalized by ODSP?
If you could please, let me know what to do, I would greatly appreciate it.
PS: Is this the same as Susan’s issue above with her $30,000 settlement.
Thank you for your help with this matter,
Tony
Hi Anthony. It is similar to Susan’s comment but not necessarily the same. You may be able to protect your ODSP but it will depend on the amount you receive and how it is structured. If any of it is an award for lost income, ODSP will likely treat it as income. The impact on your ODSP will depend on how much is considered to be income and how much you receive from ODSP. The part of the settlement for pain and suffering, can be dealt with in most cases. There are a number of ODSP exempt assets you can consider.
My husband is on cpp disability .I am receiving early cp benefits odsp is making up difference of about 350.00 a month .They are also paying our drugs .I have been appealing my cpp disability ..and they have just said they excepted me and I must stop my early cpp to get the cpp disability ..I will be getting a lump sum .Can odsp take my lump sum when I receive it ? Also we own a home which we are going to sell as we cannot keep up with all the hydro gas taxes etc .will we have to give all our house money to odsp ? Can we just get off it and just keep our drug plan as we take alot of drugs Thank you for your help
A lump sum payment for CPP Disability represents back payments owed to you. Since the amount of ODSP you receive is reduced dollar for dollar by CPP-D, ODSP will state they have “overpaid” you by the exact amount of the overpayment from ODSP. I do believe they will ask you to provide them with the overpayment you receive, however I have come across instances where people on ODSP have their monthly ODSP amount reduced instead until the overpayment is paid back.
Also, if you CPP Disability benefits exceed the amount you receive from ODSP, you could lose your ODSP.
If you sell the house, you do not need to give ODSP the money you receive from the proceeds of the sale of the home. What you will need to do is move the money into ODSP exempt assets within 12 months after the sale of your home. Exempt assets include an RDSP account, or a segregated fund account but both have limitations. It really depends on how much money you receive from the sale of the home.
If you sell your home and keep the proceeds of the sale of the home in a bank account, you will likely lose your ODSP (including the health benefits), assuming you and your husband have more than $7500 in that bank account. I don’t see how they would let you keep the drug plan if you have a significant amount of money in the bank. In my experience, it is better to restructure your assets so you maintain the money from the sale of your home and maintain your ODSP.
Hi ron, me and my spouse just had a new born child, and we needed a new vehicle, so i sold my old one to junkyard for $200, and my family and her family helped us finance a new vehicle as a gift, would this affect our odsp income and should i notify my odsp case worker about this
You and your spouse are allowed to own a vehicle while on ODSP. My understanding is that you should report the purchase of car so they are aware of it and the fact you are financing it should not matter. Loans used for the purchase of exempt assets are allowed. Look at ODSP policy directive 4.5 and 5.10.
Your site is amazing. Very helpful.
I am currently on ODSP and am considering selling my house as it is too expensive to maintain. I want to rent. If I were to make $60,000 from the sale would I be cut off ODSP?? I was thinking I could take the proceeds from the sale and pay 1-2 years worth of rent all up front. Would this help me in not being cut off ODSP?
It really depends on what you do with the money. I don’t think ODSP would accept you paying a few years of rent up front. Also, I am not convinced that is the best use of your money. There are ODSP exempt assets I suggest you consider, including an RDSP and a segregated fund account. Take a look at the following article: . You might want to give me a call to discuss your situation.
Hi,
I will be receiving an inheritance soon of no more than $40,000 now what do I do. I heard that I would be cut off odsp for 1 month and would have to go through the process of reapplying all over again. And if denied, would have to appeal. It is still not clear as to what kind of trust account I can open and have someone appointed trustee to disperse the $6,000 a year that we are allowed. I was hopping to be able to pay off debt and have a prepaid funeral, which I heard was exempt but now hearing that it is not. This is more confusing and complicated than it should be. Less than $40,000 will not last me a lifetime. Thank you for your feedback
I don’t think you should be cut off although you may lose your ODSP for a month. If you are able to manage your own money, I would suggest you consider a segregated fund account as you are allowed up to $100,000 in seg funds without jeopardizing your ODSP. I suggest segregated funds over a trust because you will have to pay a lawyer to draw up a trust and then you will need to find a trustee to manage the trust. With segregated funds, there are no legal fees and you do not need a trustee to manage the money. You can do manage the account yourself.
A pre-paid funeral is an exempt asset. See ODSP policy 4.9 – Pre-paid Funerals.
I forgot to ask if paying off debt (credit card) is exempt when you inherite any monies?
My understanding is that it depends on the debt or rather what the debt was incurred for. If the money was borrowed to cover disability related items and expenses, they may exempt it. In many cases it is difficult to associate a debt to the original expense. I think a lot of the ODSP worker’s discretion comes into play.
Hi,Ron first off I want to say thanks for what seems to be a tireless effort on your part in the pursuit and respect of those less fortunate and down and out.I was a single father raised my children while on odsp,now they’re gone so I went back to school and unfortunately got hit by a car. I will have a little money coming from that and want to start a small business.I am 50 yrs old and want to have something to leave my children. What do you suggest is the best way to go about that? Also I am scared of the loop holes of ODSP trickery in starting a business, any suggestions?
This first piece I suggest you look into is how ODSP will treat the settlement from the accident, which will depend on the amount and how it is structured. If the settlement is an award for loss of income, ODSP may treat it as income which would affect ODSP eligibility. ODSP treats awards for pain and suffering more favourably. I would suggest you consider discussing this issue with a lawyer who understands ODSP very well, especially if the settlement exceeds $100,000.
With respect to starting a business, I suggest you become very familiar with ODSP policies regarding self-employment. You should read policy directive 5.4 which talks about self-employment income. http://www.mcss.gov.on.ca/documents/en/mcss/social/directives/odsp/income_Support/5_4.pdf
I am an ODSP recipient and I have elderly parents. Recently one of them has had a health scare and they are starting to think about wills and inheritances. What should I tell them to do with any money that I will be receiving (it won’t be a huge amount, $50k maybe)? I haven’t got the Disability Tax Credit, will discuss with my Doctor the next time I’m able to see him, so would a segregated trust be the thing to tell them about?
Excellent question. Your parents have an number of options, but there are a few questions to be answered. What assets are your parents leaving behind? Are they investments? If they are investments, what type? Also how old are you? How confident are you that you will secure the disability tax credit? Based on the answers to these questions and a number of other questions I would ask, I would discuss how the assets should be structured and what they should consider when drafting their will.
They don’t need to purchase segregated funds to protect your ODSP. It would be you who could purchase segregated funds after you have received the inheritance. Read the following article for an explanation .
Your parents may also want to include a Henson Trust in their will, but the cost of doing so may not justify the value if your inheritance will be around $50,000.
There are a number of issues and factors to consider in your situation. My primary recommendation is that you speak to advisor who understands ODSP, RDSP, and related estate planning strategies.
Hi Ron,
I am on ODSP minus my CPP which is very low , so I receive a little over 900 a month. My situation is this, having been caring my elderly parent for the last 8 yrs in her residence, I have to move. I cannot afford to rent on my own, so my boyfriend said I could move with him, but share expenses , rent, groceries etc. The problem is when I was honest and asked my worker she said I would be at risk of losing my benefits, because its considered common law but, when I looked on online on how the Canadian government defines common law it says its not common law unless you live together 12 consecutive months, without any long periods of seeing each other. Why would I risk losing my benefits?
ODSP states that a person (in this case your boyfriend) is considered a spouse if you declare that he is your spouse or you live together for three months “…and the social and familial aspects of the relationship between the two persons are consistent with cohabitation, and the financial support provided by one person to the other or the degree of financial interdependence is consistent with cohabitation.”
If ODSP determines he is your spouse in accordance with their policy, they will base your ODSP eligibility on your collective income and assets.
I suggest you review the following ODSP policy directive: 2.3 — Spouse
I did a little bit of research and I read somewhere that it says you could lose your ODSP support if ODSP finds out you’re living with a spouse and didn’t contact ODSP about it. So is this true or is there anyway you can bypass this rule?
You are supposed to inform ODSP if you are living with a spouse. This includes living with a boyfriend/girlfriend. Your ODSP eligibility will be based on your collective income and assets. If your spouse is not working or earns little income and does not exceed the asset limitations, you should be able to maintain your ODSP.
If your spouse is working your ODSP will either be reduced or eliminated, depending on the amount you receive from ODSP and the amount of income your spouse earns.
If you have been living with a spouse and have not informed ODSP, they will retroactively assess your entitlement. If they determine you were not entitled to money they have paid to you previous months, they could charge you with an overpayment.
My brother is special needs, has been on ODSP for years and has worked at a local grocery store. The store is changing its name in the next few months; my brother has been given a package with deals in it, to either take a buy-out or buy -down. We are leaning towards the buy-out, as he has worked there 22 yrs., is 53 and the atmosphere may not be the same as the good one he has had during the past. He will receive approx. $7 000 in a buy-out, gross, but less for his net income. We are wondering if ODSP will take him off of it, if he receives that amount or can we do something with it, so he doesn’t lose his ODSP, which he has been on for years. Thank you for any info.We have to decide by Oct. 1!
First let me say if he loses his ODSP it should only be for a short while (one month) if managed correctly. One important aspect to understand is if the buy-out will be viewed as income. If that is the case, the first $200 of net income he earns in the month he receives it does not affect his ODSP. After that, his ODSP is reduced by 50 cents for every dollar he earns above and beyond the $200. For example, if he receives $6000 in net income the first $200 does not affect his ODSP, leaving $5800 that will affect his income, which will reduce his ODSP by $2900 for the month. In all likelihood, your brother receives less than $2900 from ODSP, so he would lose ODSP for the month (likely the next month to be more exact, since he first has to report the income). Assuming he does not get a job paying him a material salary in the following month, he should be able to get his ODSP quickly reinstated
as long as he has less than $5,000 in assets
. If he has more than $5,000 in the bank, you can move a portion of that money to a Registered Disability Savings Plan or possibly to a segregated fund account to bring the balance of his bank account down to under $5000. Money in an RDSP or in seg funds up to certain limits are viewed as exempt assets by ODSP and thus are not considered when evaluating ODSP eligibility. If you need any clarification, you can call me at 416.562.5570 to discuss.
This is for your general information only and is not intended to provide specific personalized advice including, without limitation, investment, financial, legal, accounting or tax advice. You will need to consult an appropriate professional regarding your particular circumstances.
Good afternoon Ron, I am on ODSP and working part time due to my disability. Do you know what the maximum amount of earned income I may have to not have the income support cancelled? Thank you for your assistance.
There is no maximum amount as it depends on how much you receive from ODSP. The first $200 of net income you earn in a month does not affect your ODSP. Every dollar you earn above and beyond the initial $200 reduces your ODSP by 50 cents.
Example: If you earn $400 of net income in one month, the first $200 does not affect your ODSP. The next $200 reduces your ODSP by $100.
Hello I had a question and was wondering if you can provide me with some information. My father is turning 65 in 9 months. He is currently under ODSP. There is me my father and mother and siblings. He received a package to apply for OAS CPP and GIS. My question is if my father decides to apply for these benefits will he stop receiving ODSP and lose all his benefits from ODSP. I know you can defer these old age benefits until he reaches the age of 70. any advice would be very much appreciated. thank you so much
While CPP gives your father the choice to defer an application for CPP benefits, ODSP will insist he applies for CPP, OAS and GIS. ODSP considers itself to be the last payer. If your father does not apply for these federal benefits, his ODSP eligibility will be jeopardized. If he applies for them and the sum total of those benefits exceed ODSP benefits, his ODSP eligibility could be terminated. If ODSP benefits are less than the other three added together, he would likely receive the difference from ODSP. There are some circumstances where his ODSP health benefits could continue, if ODSP is greater than the others.
Wow, what an excellent blog!
I have an Intellectually Disabled sister on ODSP, and both our parents are now deceased, and I am her caregiver. I am currently looking into the possibility of getting her a Veterans Benefit as my father was a Veteran and my sister was a dependent since birth. It is looking like a good possibility, but I have been told that what ever the benefit, it will be deducted dollar for dollar from her ODSP. Is this true? We currently cannot find her any housing and this would go a long way to paying the bills.
Glad you like the blog.
Most likely the Veterans Benefit will be treated as income by ODSP and reduce your sister’s ODSP. I am not sure by how much, but it could be dollar for dollar as CPP benefits are treated. I suggest you review the following ODSP Policy Directive: 5.1 — Definition and Treatment of Income
Hi Ron I have couple questions and I am nervous about them so the first question is
I just recently had a baby but my girlfriend dont live with me so i read somewhere i get more money with single parent.
2- how much and what benifits will i get from odsp with single parents.
3-I dont want my child 1 month to be registered for ODSP will i still get the extra money from odsp.
hope u answer my questions
thank you Ali
Hi Ron if i call the odsp n tell them my gf had a baby but she and the baby dont live with me what will they say and do about that n my odsp income
Hi Ron, I love you blog! 🙂
My question is:
My grandmother passed away recently and we have a joint account. We did this so I could take care of her finances. I’m on odsp. There is close to 45k in the account. I’ve been reading a few other comments on here about segregated fund account. Is this my best option?. Also as I’m sure you are aware odsp doesn’t give us repairs on homes anymore. So I’ve had no toilet upstairs for over 4yrs and the washroom has to be gutted and redone cause the subfloor is rotton. So can I also use the money to have the repairs done?
Thanking you in advance
Tom
Hi Rob. Thanks for the feedback. Glad you find my blog helpful. I don’t know if it is your best option or not. I would need to have a conversation with you to determine a sound course of action. You are welcome to contact me if you like. My contact information is on my website on the contact page https://reeganfinancial.com/contact/. I would be happy to discuss your situation.
Hello Ron,
Thanks for operating this ODSP info.-forum.
I am disabled. MS. I need a new mobility scooter.My obsolete old one broke.
If I start a Go Fund Me page,I’m worried ODSP will perceive this as ‘income’, even tho it’s for a scooter (to use outdoors to get around. ODSP only gives scooters to people who need them indoors & who live in wheel-chair accessible domains; of which I don’t; being in this basement.
Plan B would be to see if someone like me on ODSP with no additional income can even qualify for a bank loan of $4000 and, if SO, would ODSP view THAT as ‘income’ too?(Probably)
Thanks for your time.
I am not sure how ODSP would view raising money through a Go Fund Me page. If you take a loan, you may be able to get an exemption for that loan because it is for a disability related expense. You would need to talk to your worker about this. I would also suggest you look at the Assistive Devices Program offered through the Ontario Ministry of Health which you can find at http://www.health.gov.on.ca/en/public/programs/adp. The March of Dimes may also be able to help. http://www.marchofdimes.ca/en/programs/adp/Pages/Adp.aspx
Hi Ron
Our son is on ODSP. If he loses ODSP when he inherits from us, would he still have the benefit of his RDSP?
Thanks very much,
Mari
The RDSP is not a means-tested benefit. In other words, eligibility is not dependent on the person’s net worth. While government contributions to an RDSP are dependent on income, net worth has no affect on eligibility.
I would also strongly suggest you consider some appropriate estate planning to protect your son’s ODSP. There are strategies to structure your estate so the proceeds do not jeopardize your son’s ODSP. This is a central aspect of my work.
Hi Ron
I am the executrix to my Great Uncles estate. I have a few cousins on ODSP, one in particular he is in need of a vehicle. How should I go about getting a new or I shold say a newer one for him with out affecting his ODSP?
Your cousin on ODSP is allowed to own one vehicle which can be valued at any amount without affecting ODSP. I can’t really advise you on how you should administer the purchase of the vehicle.
One question I have, though, would the money come from your uncle’s estate? If yes, is your cousin on ODSP a beneficiary of the will? Would the purchase of a vehicle at this time contravene the terms of the will?
Hi Ron im currently on ccpd and odsp i was wondering if i could still make 200 a month without it effecting my odsp i went in before and they said something to me about garnishing dollar for dollar. Im not 100% sure on what she said but back then i was with my gf and her kid and she worked but now im single living with my parents. The extra income could really benefit me
The first $200 net income after tax will not affect your ODSP. Every dollar of net income you earn above and beyond the $200 each month reduces your ODSP by 50 cents. They don’t take dollar for dollar on employment income. Hope that helps.
Hi Ron,
My sister is currently involved in a lawsuit due to a crippling car accident and will most likely receive more than $250000. From what I understand any award $100,000 and under that is for pain and suffering, medical and housekeeping are all exempt from being included as income as long as the total is below $100k. But what happens if the amount is more than that? She has been on ODSP for little over 3 years now. Can she give away the amount for example? To her children or grandchildren?
Excellent question. Unfortunately, she can’t give away significant sums of money in order to maintain her eligibility for ODSP. Doing so is dumping assets at less than fair market value. If she divests herself of a sum of money, she needs to get something back in return that is of equal market value. If she purchases an ODSP exempt asset instead, she might be able to protect her ODSP, depending on the structure of the settlement.
Personal injury settlements are somewhat complex. ODSP’s treatment of those settlements is also complex. Settlements are divided into different “heads of damage”. Pain and Suffering is one example. Medical costs is another example of a head of damage. ODSP treats each of the heads of damage differently.
Often, there are strategies a person on ODSP can employ to protect ODSP eligibility. They are not simple and easy strategies to explain as there are a number of moving parts to a well crafted solution and one size does not fit all. Each situation presents combination of facts, options, limitations and needs.
I intend to work on an article about this topic and post it to my blog sometime in the future.
hi Ron
I am currently working part time and trying to save up for a used car so I can drive to work and back home with ease.
my question is how much can the vehicle be worth?
odsp only allows $5000 in assets limit but at the same time it says first vehicle is exempt…
its soo confusing
You are allowed to own one car without affecting your ODSP eligibility. It does not matter how much that car is worth as it is considered an exempt asset.
Hello Ron,
I am having a hard time finding information for this situation. Currently, my fiancé is on ODSP (we do not currently live together, she lives with her dad) and I am working full time @ $16/hr.
We are looking into apartments to live together, but we can only manage to do this if she doesn’t lose her ODSP income. Combined with my large school debt, car payments, insurance, and interest on my school loan, it makes budgeting for this very hard.
If we were to move in together, would she lose a portion / all of her support payments?
Determining the impact on her ODSP depends on how much is received from ODSP and your net monthly earnings (i.e. after deductions). If ODSP treats you as a couple, your ODSP income as a “benefit unit” should go up and you should also receive an extra $100 a month because you are working.
The first $200 of net income you earn each month has no impact on your ODSP. Then, for every dollar earned in excess of $200 each month, your ODSP is reduced by 50 cents.
Let’s say your ODSP increases to $1720 per month because you are a couple. Then add $100 because you are working, for a total of $1820 per month from ODSP. And let’s say you earn $2,200 per month in income after deductions. The first $200 does not impact your ODSP, so that leaves $2,000 that would affect ODSP. Since every dollar earned in excess of $200 each month reduces your ODSP by 50 cents, your ODSP of $1820 is reduced by $1,000 (divide the $2,000 by 2).
I strongly recommend you look into what your ODSP would increase to if you were to live together and what your net monthly income amount to, then do the math. Review the relevant policy: 5.3 — Deductions from Employment and Training Income