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Ontario Disability Support Program (ODSP) Issues

The Ontario Disability Support Program (“ODSP”) is a Ministry of Community and Social Services program that provides financial assistance to people with disabilities over the age of 18 who are in financial need. The benefits paid under ODSP vary depending on the recipient’s shelter costs and the number of people in the family or “benefit unit”. In order for a person with a disability to be eligible for ODSP, he or she must meet the medical eligibility threshold test and the financial testing provisions regarding assets and income as set out in the regulations under the Ontario Disability Support Program Act. As of 2017, the maximum value of assets held by an ODSP recipient is $40,000 for a single individual, $50,000 for a couple, and $500 for each non-spousal dependant.

There are several kinds of assets and sources of income that are excluded from a person’s list of assets and income sources for the purposes of determining ODSP eligibility. This list includes (but is not limited to): a principal residence; a car; a prepaid funeral; a Registered Disability Savings Plan (RDSP); a person’s interest in a Henson trust or a Disability Expense Trust; Family Law Act damages; certain governmental compensation payments; compensation for pain and suffering as a result of injury to or the death of a member of the benefit unit; and expenses incurred as a result of injury to or the death of a member of the benefit unit.

Recent amendments to the regulations, effective September 1, 2018, now exclude funds held in Registered Retirement Savings Plans (RRSP’s) and Tax-Free Savings Accounts (TFSA’s) from the calculation of assets.

Further amendments, effective November 1, 2018, exclude payments from a trust or life insurance policy, and gifts or other voluntary payments to ODSP recipients from the calculation of income. These amendments allow ODSP recipients to receive payments from gifts, trusts, and life insurance proceeds in any amount without jeopardizing their eligibility.

There are circumstances under which legal advice regarding ODSP may still be required. Examples of such circumstances include (but are not limited to) cases where:

  • A person receiving ODSP is going to receive an inheritance from a deceased person’s estate, and that inheritance was not put in a Henson trust by the deceased person’s will. If the recipient has the requisite mental capacity to settle a trust, that person can place up to a maximum of $100,000 in a discretionary trust called a Disability Expense Trust in order to protect his or her ODSP eligibility. If the inheritance is greater than $100,000, there are other exempt assets that the person can convert the funds to in order to maintain ODSP eligibility.
  • A person receiving ODSP is going to receive a personal injury award or settlement. Following amendments to the regulations in 2017, compensation settlements or awards of any amount received for pain and suffering, or expenses incurred or to be incurred due to injury, are exempt as income and assets for ODSP recipients. However, damages awarded as a result of the loss of earnings are not exempt. Legal advice may be required to structure these awards and settlements in a way that maintains ODSP eligibility while taking advantage of the 2017 changes.
  • A person wants to leave a bequest in his or her will to a disabled person who receives ODSP benefits or who may need to apply for ODSP in the future. The person making the bequest will need advice about whether a Henson trust is required to maintain ODSP eligibility for the disabled beneficiary, and advice about other estate planning ideas for disabled beneficiaries.
  • A person is acting as the estate trustee of an estate that has disabled beneficiaries. That person may need legal advice regarding the form of payments that can be made to those beneficiaries without jeopardizing their ODSP eligibility.
  • A person is acting as or applying to be a guardian of property for an ODSP benefits recipient. That person may need advice regarding how to manage the ODSP recipient’s assets and income in order to maintain ODSP eligibility.
  • A claim of overpayment of ODSP benefits has been made and a request for repayment has been issued by ODSP. The ODSP benefits recipient may want to dispute the claim and require advice about how to do so.