Special Needs Planning Group

ODSP

Ontario Disability Support Program

People with either physical or developmental disabilities in the Province of Ontario may be eligible to receive benefits under the Ontario Disability Support Program (ODSP). The ODSP is administered by the Ministry of Community, Family and Children's Services. This program which is often called the Disability Pension is available to people who are over 18 years of age and who meet a very closely regulated set of criteria. These rules surround issues of assets and income of the person with the disability and their medical condition. The purpose of this program is to provide a basic level of income, prescription drugs and dental care to adults with disabilities. It also provides some basic programs such as the current employment program which is designed to encourage people with disabilities to enter into the workplace and to retain employment opportunities. For many people with disabilities in Ontario, it is important to maintain these benefits even though they are somewhat limited. It should also be noted that the benefits under this program are payable until the person with the disability reaches age 65 at which time the Canada Pension Plan, Old Age Security and the Guaranteed Income Supplement programs take over. Under these programs, the person will continue to receive a modest income, prescription drugs but they will lose their entitlement to funded dental care.

Description of the Ontario Disability Support Program Benefits

As previously mentioned, the Ontario Disability Support Program is often referred to as being a pension plan for people with disabilities. It contains several components which will be discussed here in a summary format since the full details of each category are far too lengthy and complex for a web site discussion. If you wish to gain further insights into the Ontario Disability Support Program, please do not hesitate to contact the "Special Needs" Planning Group for assistance and direction.

The Ontario Disability Support Program provides a person with a disability with a tax free monthly cheque based upon the person's actual expenses up to a maximum of $1,308 for a single person if the person is living in a rental or ownership situation. (2023 amounts) As of July of 2023, this amount is indexed annually to account for inflation. If the person with a disability is living in the family home or in a "board and lodge" situation, the monthly amount is reduced to $995 and it too is indexed to inflation. In addition, the amount of the cheque can be reduced by employment income and other income received by the person with the disability. The income rules could eliminate a person’s entitlement to benefits if their income amount is large enough. However, a person receiving benefits under the ODSP program is allowed to receive voluntary payments of up to $10,000 in any 12 month period and unlimited amounts of money if used for disability related expenses as defined by the ODSP directives without affecting his entitlement to benefits.

Over and above the monthly cheque, the ODSP provides access to a prescription drug plan and a basic dental coverage plan. Quite often, the drug and dental plans are of tremendous benefit to people with special needs since medication costs can be high. This factor alone can make the preservation of the government program essential. If a person qualifies for benefits under the ODSP, he may qualify for up to an additional $250 for a special diet allowance provided that the specific medical conditions are listed on the ODSP guidelines. This extra funding has been added to the program in recognition of the fact that special diets may be necessitated by various medical conditions and there may be extra costs as a result.

Employment Supports are also available through the ODSP program. These supports are designed to reduce or eliminate disability-related barriers to finding and keeping an income earning position of employment. A person with a disability can access the following assistance under the employment support section of the ODSP.

If a person qualifies for Employment Benefits under ODSP then the services he or she can receive are as follows:

Assistance Developing an Employment Plan
Employment Preparation and Training:
Job Coaching
Job Placement
Technical Aids
Interpreter, Reader, Note taker, Intervener Services
Transportation Assistance While in Training Program

All in all, it is easy to see that to live on only the ODSP benefits alone is not living in the lap of luxury. The cost of living in most communities of Ontario far exceeds the benefits available to the people with disabilities. The preceding review is simply an overview of the program. If you are interested in a more in depth view of the ODSP program, simply contact The "Special Needs" Planning Group.

Qualifying for Benefits

A person who wishes to receive ODSP benefits must qualify for them on both a financial and medical basis. The Government's position is that it should be the payer of last resort when it comes to the ODSP program. This means, for the most part, that all other assets and income of the person with the disability must be almost exhausted before the ODSP program will begin to pay. However, there are exceptions to the rules. The regulations surrounding the assets and income of the person with the disability will follow.

Asset Regulations

The regulations stipulate that a person applying for or receiving ODSP benefits must not own liquid assets in excess of $40,000 (as of September 1, 2017) for a single person or $50,000 for a married person plus $500 for each dependent child. If an applicant or recipient exceeds these values, they are not eligible for benefits. There is no clear or formal definition of liquid assets however, it is generally accepted that liquid assets are cash or anything that can easily be converted to cash. Liquid assets include but are not limited to, money in the bank, stocks, bonds, GIC’s, Mutual Funds, some Tax Free Savings Accounts, some RRSP’s some in-trust accounts and in some cases, even valuable coin or stamp collections. If you are not certain that a particular asset is part of the $40,000 limit or not, don’t hesitate to contact the Special Needs Planning Group for clarification.

The regulations specifically exempt several assets from being considered liquid assets. This means that people can own the following without it being counted against them.

Some Exempt assets are:

A Person's Principal Residence
A Second Property necessary for the health or well-being of a member of the benefit unit.
A Vehicle of Any Value
A Second Vehicle of up to $15, 000 Used for Employment outside the home.
Tools of the Trade of a Member of the Benefit Unit
Farm Assets – Considered Tools of the Trade
Business Assets up to $20,000
Student Loans, Grants, Awards or Bursaries
Assets Derived From Earnings of Dependent Child’s Earnings
Some Gifts if Used Within Certain Time Frames

Contributed to RESP or RDSP – 6 months
To Purchase a Principal Residence – 12 months
To Purchase an Exempt Vehicle or First & Last Month’s Rent – 6 months

Registered Education Savings Plans (RESP’s)
Prepaid Funeral Programs
Insurance Payments under Ontario Disaster Relief Assistance Program
All Compensation Settlements for Pain and Suffering, Loss of Care, Guidance and Companionship under the Family Law Act and Non-Economic Loss under Workplace Safety and Insurance act or Worker’s Compensation Act
Many Special Government Compensation Payments
Aboriginal Land Claim Settlements
Income Support Arrears from Retroactive ODSP Entitlements – Exempt for 6 months
Inheritance or the Proceeds of an Insurance Policy of up to $100,000, Held in Trust (Inheritance Trust)
Cash Surrender Value of a Life Insurance Policy including a Segregated Fund up to $100,000
Inheritance or the Proceeds of an Insurance Policy of Unlimited Amounts Held in a Henson Trust (See Henson Trusts in Tools and Techniques section)
Earnings While Attending Secondary School
Earnings of Post-Secondary Students
Locked in RRSP’s and Segregated Fund RRSP’s up to $100,000
Loans for Exempt Assets or First and Last Month’s Rent
Registered Disability Savings Plans (RDSP’s)

Income Regulations

Income can come in many forms. Most often, we think of income as being related to employment and for many people, that is their only source of income. When we discuss income as it relates to people with disabilities and the ODSP, we must focus on all potential sources. It should also be noted that there are a great number of rules and regulations which define exemptions from income according to the ODSP. The following will only summarize the most common items which are typically considered to be income and we will explore how they are treated by the ODSP.

Income Includes the Following:

All wages, salaries, casual earnings or any remuneration paid pursuant to a training program.
Income or revenue from an interest in or operation of a business.
All regular or periodic payments received under any annuity, pension plan, superannuation scheme or insurance benefit.
All payments received under a mortgage agreement.
All pensions or other payments received pursuant to the legislation of any other country.
All payments in cash or in kind for spousal support.
All payments received as a retainer from a Children's Aid society for being available to provide emergency care.
All payments received where the recipient is a sponsored immigrant or nominated relative under the Immigration Act or the Immigration and Refugee Protection Act.
Any payments received from the sale or disposition of an asset unless otherwise exempt.
All interest earned from the proceeds of a compensation award regardless of the amount of the award.
Dividends earned from a life insurance policy that are not otherwise exempt.
Interest or dividend payments earned from the capital of a trust that are not otherwise exempt.
60% of gross income earned by renting out self-contained quarters, land or garage.
The greater of $100 or 60% of gross rental income earned for lodging provided without meals.
The greater of $100 or 40% of gross rental income earned for lodging provided with meals.
Income replacement payments under:

Workplace Safety and Insurance Act and Workers Compensation Act that are benefits for loss of income due to injury on the job
Pension Act
Employment Insurance Act
War Veterans Allowance Act
Civilians War Pension and Allowances Act
Canada Pension Plan or Quebec Pension Plan
Old Age Security Act and Guaranteed Income Supplement
Ontario Guaranteed Annual Income Act

ETC.

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Excluded From Income

It should also be noted that there are also a large number of items that are specifically excluded from the income calculation. Some of them are:

Earnings Exemptions From Employment.
Net Employment Earnings up to $1000 per month. The Excess over $1000 per month is deducted from the ODSP cheque at the rate of 75%
Earnings of a dependent child of the recipient of ODSP benefits.
Earnings of dependent adults attending secondary school on a full time basis or a training program.
Earnings of persons attending post-secondary School.
Child Support Payments Received.
The proceeds from the sale of a principal residence provided those proceeds are used to purchase another principal residence, an asset necessary for health and welfare, an exempt asset, or an asset that does not result in the recipient exceeding the prescribed asset limit.
Interest earned on the allowable asset limits (i.e.: $40,000 for single person)
An amount up to $10,000 in a 12 month period per member of the benefit unit, in the form of gifts or voluntary payments for any purpose from any source; (this includes monies from trusts, life insurance policies, honorariums and windfalls). Casual gifts of insignificant value, e.g. basic clothing, meals, occasional food purchases are also exempt.

Honorariums are generally payments made to individuals to recognize services provided, where payment is not required. In these cases, honorariums are considered voluntary payments and may be included in the $10,000 exemption for voluntary payments.
Honorariums paid in a way that is similar to a salary, to fulfill an obligation to compensate the recipient for services provided, are treated as employment income, and not as voluntary payments under ODSP. In these cases, the usual earnings exemptions apply.

Payments from any source in the form of gifts or voluntary payments for disability-related items and services or for education and training incurred because of the disability of a member of the benefit unit. There is no limit on the value of these contributions, provided they will not be reimbursed from other sources;
Gifts received in any amount that are used for first and last month’s rent, to purchase a vehicle or to purchase a principal residence.
RDSP related exemptions:

voluntary contributions made to RDSPs by family members and other third parties;
interest earned on and re-invested in an RDSP;
the federal Canada Disability Savings Grants and Canada Disability Savings Bonds; and
all withdrawals from an RDSP for any purpose.

Refundable tax credits including the Canada Child Tax Benefit, National Child Benefit Supplement, Ontario Children’s Activity Tax Credit and the Ontario Trillium Benefit Payment.
Ontario Child Benefit (OCB) Payments.
Payments from the Universal Child Care Benefit.
Payments from the Canada Pension Plan Orphan Benefit.
Payments from the Quebec Pension Plan Orphan Pension.
Payments from the Ontario Child Care Supplement for Working Families.
Payments received under subsection 147(14) of the Worker's Compensation Act, known as B165 payments;
Payments received for property damage and temporary living expenses through the Ontario Disaster Relief Assistance Program (ODRAP) other than payments for loss of income;
Payments (cash and in-kind) received by evacuees of the Kashechewan First Nation between October 2005 and September 2006, from a municipality or a Tribal Council made on behalf of the federal Department of Indian Affairs and Northern Development (Canada);
Insurance payments made for temporary living expenses and to replace or repair lost/damaged exempt assets or assets within allowable asset limits but not payments for loss of income;
Mortgage payments paid by disability insurance purchased by an applicant/recipient on a mortgage for his/her principal residence;
A forgivable loan under the First Nation, Intuit, Métis Urban and Rural (FIMUR) Housing home Ownership Assistance Program.
A forgivable loan or a grant under the Residential Rehabilitation Assistance Program (RRAP) that provides assistance to on-reserve low-income homeowners to bring their homes up to safety and health standards, or improve energy efficiency.
A forgivable loan or grant under Ontario Renovates that provides assistance to low-income homeowners to bring their homes up to safety and health standards, improve energy, efficiency and/or increase accessibility of the home through modifications and adaptations; and, create a new affordable rental unit within an existing single family home;
Payments made under the Investment in affordable Housing (IAH) - operating components that exceed the maximum shelter allowance up to the actual shelter costs;
Payments made under the Community Homelessness Prevention Initiative (CHPI) payments for:

rent deposits;
establishing a new principal residence;
maintaining the health and welfare of a member of the benefit unit in her or her current residence;
arrears relating to shelter costs; or other housing and homelessness-related services, items or costs approved by the Director of Ontario Works.

Payments made under CHPI for personal needs made to domiciliary hostel residents up to the amount equivalent to the ODSP amount issued for personal needs to recipients residing in a long-term care home.
Financial grants, items or services that are issued for energy-conservation in homes through Conservation and Demand Management Programs offered by local Electricity Distribution Companies;
Financial grants, items or services that are issued for energy-conservation in homes through Demand Side Management programs offered by local Natural Gas Distributors;
Benefits in the form of a cheque or voucher received through the Water Filter Fund program;
All direct financial assistance received from the Ministry of Tourism, Culture and Sport’s Quest for Gold – Ontario Athlete Assistance Program;
Funds received from the Ministry of Training, Colleges and Universities or Canada Student Financial Assistance for education costs such as books, tuition, instructional supplies, transportation costs and compulsory fees;
Funds received from the Ministry of Training, Colleges and Universities under the Second Career program for education costs.
Awards or grants from the Ministry of Training, Colleges and Universities to a student enrolled in a post-secondary institution;
A bursary received by a full-time student enrolled in a secondary school under 8(1)18 of the Education Act;
The Dr. Albert Rose Bursary to assist public housing tenants attending post-secondary school;
Payments from an RESP, intended and used for education costs, received by a recipient or any other member of a benefit unit as well as gifts and voluntary payments received above the $10,000 exemption and paid into such RESPs. See Directive 5.11 Post-Secondary Education;
Proceeds from a court judgement or legal settlement or an award from a statutory tribunal, such as Compensation for Victims of Crime, received as damages or compensation for pain and suffering, due to injury to or the death of a member of the benefit unit, up to a maximum of $100,000 for each member of the benefit unit. See Directive 4.6 Compensation Awards;
Compensation received as settlement for a claim of abuse sustained at an Indian Residential School, other than compensation for loss of income;
Prejudgement interest awarded as compensation for the delay in receiving damages for pain and suffering as a result of injury to or death of a member of the benefit unit, See Directive 4.6 Compensation Awards;
Payments received under section 46 of the Workplace Safety and Insurance Act and section 42 of the Workers' Compensation Act known as Non-economic Loss Awards to compensate for permanent impairment from a work related injury or illness causing physical, functional or psychological loss;
Independent Living Allowance payments from the Workplace Safety and Insurance Board received annually by severely impaired workers;
A Full Income Exemption Applies to the Total Compensation Award for:

Pain and Suffering as a Result of an Injury or Death of a Member of the Benefit Unit.
Expenses Actually or Reasonably Incurred or to be Incurred as Result of Injury or Death of a Member of the Benefit Unit.
Family Law awards for loss of guidance, care and companionship as a result of death or injury
WSIB Non-economic loss (NEL) awards for persons who suffer permanent impairment from work-related injury or illness that causes physical, functional or psychological loss.

Interest earned on the capital of an inheritance retained in trust up to the allowable limit of $100,000. See Directive 4.7 Funds Held in Trust;
All payments from the trust, including interest earned, used for the purchase of approved disability-related items and services (e.g. assistive devices) or education and training expenses incurred because of the benefit unit member's disability are exempt as income without limit. See Directive 5.9 Treatment of Disability-Related Items and Services;
Payments from the capital of a trust (including interest earned and retained therein) for non-disability-related purposes are exempt as income to a combined maximum of $10,000 in a twelve month period per member of the benefit unit (the combined maximum includes payments from a trust, gifts or voluntary payments, life insurance policies, honorariums and windfalls). In addition to the $10,000 exemption, payments from the capital of a trust that will be applied to the purchase of a principal residence, an exempt vehicle or that will be applied to the first and last month’s rent are also exempt as income.

This exemption applies provided the applicant/recipient files an annual report, which is satisfactory to the Director, documenting all income and expense transactions relating to the inherited assets held in trust;

Life insurance policies, annuities, deferred annuities and segregated funds purchased through a life insurance company, with a cash surrender value of up to $100,000 per member of the benefit unit, provided that the cash surrender value remains within the policy. (Note: under the Insurance Act, annuities, deferred annuities, and segregated funds purchased through a life insurance company are considered to be life insurance);

Note: Interest and dividends from an exempt life insurance policy and loans against the face value of an exempt life insurance policy may be exempt as follows:

income generated from the policy is exempt provided that it is reinvested in the policy and that the total cash surrender value does not exceed $100,000;
payments from or loans against the face value of the policy are exempt, provided the funds are used for approved disability-related items and services, or education and training expenses incurred because of the person’s disability;
partial redemption of the cash surrender value may be exempt if there is room to use the maximum exemption of $6,000 per twelve-month period per member of the benefit unit;

Note: Income from the policy, annuity or segregated fund that is not reinvested in the policy, not used for approved disability-related items and services, or applied to the purchase of a principal residence, an exempt vehicle, first and last month’s rent or not claimed under the annual $10,000 exemption, is chargeable as income.

All donations received from a religious, charitable or benevolent organization for any purpose.
All payments received fro activities related to participating in a Jury including the per diem payment or payments for transportation.
40% of gross rental income, and 60% of gross board and lodging income;
Loans including a reverse mortgage used for an approved purpose. Approved purposes include:

the purchase of approved disability-related items or services;
expenses for health-related reasons as supported by a medical doctor, and approved by the Director;
business loans;
Ontario Student Assistance Program payments for tuition, books, transportation costs, instructional supplies and other compulsory fees related to a post-secondary institution;
approved personal loans for training or education costs as long as the person is attending the program or training for which the loan was taken or intended and that the funds are applied to education or training within a reasonable period of time. See Directive 5.11 Post-Secondary Education;
loans to recipients for assets that are exempt, (e.g. motor vehicles, principle residences);
loans for the payment of first and last month’s rent;
loans for the purchase of normal household items;

First Nations settlements not made under the Indian Act or a Treaty;
Payments from ODSP employment supports and Ontario Works employment assistance;
Certain payments under the Indian Act (Canada) under a treaty between Her Majesty and a Band, other than funds for post secondary education.
Payments pursuant to an Aboriginal land claim settlement agreement between Ontario and/or Canada. (Please see Directive 4.1 regarding asset treatment related to these payments.)
Canada or Quebec Pension Plan Death Benefits;
Payments received under the Supports to Promote the Social Inclusion of Persons with Developmental Disabilities Act;
Payments received under the Ministry of Community and Social Services Act;
An adoption subsidy received from a Children's Aid Society under the Child and Family Services Act. Every adoption subsidy is accompanied by an agreement that stipulates the items that the subsidy is intended to cover. Items covered under an adoption subsidy should not be claimed as an expense under the Assistance for Children with Severe Disabilities (ACSD) program;
From February 1, 2007, payments received from a Children’s Aid Society for Permanency Planning, which includes Admission Prevention, Kinship Service and help with the costs of children in Legal Custody (Section 65.2 of the Child and Family Services Act);
A grant received under the Employment Insurance Act (Canada) and used for the purpose of purchasing a training course approved by the Director. Payments under the federal Employment Measures and Benefit - Human Resources Investment Fund (HRIF) through Employment Insurance were formerly known as the Transitional Skills Grant;
Learning Earning and Parenting Program (LEAP) incentive payments ($500). (The payment will also be exempt as an asset if used by the young parent for post-secondary education or if it is invested in a Registered Education Savings Plan (RESP) for the young parent’s dependent child.);
Interest earned on the LEAP incentive payments within an RESP. LEAP incentive payments placed in an RESP for the young parent’s dependent child consist of an Ontario payment as well as a federal payment made as a Canada Education Savings Grant;
Other miscellaneous payments exempt under the ODSP Regulations.

There are a number of other things that affect the ODSP benefits in terms of income. There are rules surrounding Canada Pension Plan and WSIB benefits, the proceeds of the sale of assets, employment bonuses and many other types of income. For a further examination of those income issues, please consult the ODSP Income Support Policy Directives.

Medical Qualification: Definition of Disability:

As far as the ODSP is concerned, in order to qualify for benefits, a person must be a person in need and a person with a disability. A Person with a Disability means:

you have a substantial physical or mental impairment
the impairment is expected to last at least 12 months (although its effect may be episodic or cyclical)

and

the impairment substantially limits your activities of daily living in at least one of three areas:
Personal Care (e.g. bathing, grooming, dressing)
Activities in the community (e.g. banking, shopping)
Activities in the workplace (e.g. being able to follow instructions)

The definition a person with a disability does not focus on a person’s abilities but rather on their limitations. It also seems that a “label” has little or nothing to do with whether or not they qualify for benefits. The actual limitations that the person has determine whether or not they qualify from a medical perspective.
In conclusion, the Ontario Disability Support Program has a very complicated set of rules and regulations surrounding the qualification process. People with disabilities who have assets in excess of the allowable amount are not eligible for benefits and people who have income will have to use it first, before receiving benefits from the ODSP. The financial issues must be sorted out before a person will qualify for benefits and a great deal of planning should be done around making certain that assets and income do not fall into the hands of the person with a disability by mistake. This could also make a person ineligible for benefits.

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ODSP Application

The process of applying for benefits under the Ontario Disability Support Program is often a difficult and frustrating exercise primarily because people don't know what to expect. People don't realize that even making a simple telephone enquiry may cause the opening of a file under your name or the name of the person with a disability and the nature of your enquiry can be used against you during the actual application process.

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