Ontario Disability Support Program (ODSP)

  • Ontario Disability Support Program Act, Income Support
  • Purpose is to help people with disabilities who are in financial need pay for basic living expenses
  • To be eligible, person must be:
  • at least 18 years old,
  • an Ontario resident,
  • meet the program's definition of a person with a disability or be a member of a Prescribed Class, and
  • Meet severe income and asset limit requirements

ODSP –April 18, 2018 Proposed Amendments

  • Ontario Regulation 281/18 to amend O. Reg. 222/98
  • The original amendments would have changed:
  • Investments in RRSP and TFSA accounts would be exempt from asset limit
  • The $10,000 limit on gifts in any 12‐month period would be removed, allowing unlimited gifts and distributions from an estate or trust without affecting income limit
  • Income threshold limits would be increased
  • The amendments would have been effective beginning September 1, 2018

ODSP – Amendments Cancelled

  • On July 31, 2018, Ontario government announced that it would not proceed with certain initiatives in the previous government's 2018 Budget
  • Proposed amendments have been cancelled
  • Government July 31, 2018 press release said, "Over the next 100 days, Ontario will work on a plan to reform social assistance..."
  • What will the new plan look like?

ODSP: Henson Trusts and Inheritance Trusts

  • Henson trusts are discretionary trusts that can be used to control the amount of income (and assets) included in the hands of a beneficiary for the purpose of qualifying for ODSP and other benefits
  • Henson trusts will continue to be an important tool for families supporting an ODSP recipient
  • For the time being, trust and estate distributions and gifts continue to be limited to $10,000 in any 12‐month period unless the payments are used to pay for certain expenses
  • Inheritance Trust – up to $100,000 of inherited funds may be contributed without losing ODSP benefits

Trust Reporting: Trust Tax Return Reporting Developments

  • February 27, 2018: the Department of Finance released its 2018 Federal Budget, which contained increased tax reporting requirements for trusts
  • July 27, 2018: the Department of Finance released draft tax legislation that would implement the new trust reporting requirements
  • The new trust reporting rules will be effective for tax years that end after December 30, 2021 (e.g., beginning for the December 31, 2021 tax year)
  • Inevitable that some trustees will not be aware of these new rules

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