The Ontario Disability Support Program (ODSP) & Henson Trusts

Introduction

What happens to someone who is receiving income from the Ontario Disability Support Program (the “ODSP”) and they turn 65 years of age? Are they ‘aged out’ of the program?

The short answer is ‘not necessarily’.

What is the ODSP?

The ODSP is one of the several support programs offered by the Government of Ontario (the “Government”) that provides income support to eligible individuals, in the form of a monthly payment. To be eligible for the ODSP, you must be an Ontario resident of at least 18 years of age, in financial need. Additionally, you must be qualified as ‘disabled’ according to the program or be a member of a prescribed class. Financial need is a fact-specific determination, based upon a variety of circumstances, including one’s income and assets, living expenses, family size and make-up, and shelter costs.

What Happens When I Turn 65 Years of Age?

The common belief is that when one turns 65 years of age, they are no longer eligible for the ODSP. However, this is not entirely correct. An individual is removed from the ODSP when their income exceeds the amount of money they are receiving through the program. As such, the more benefits you receive from the ODSP, the harder it is to be displaced from the program. Therefore, it is not necessarily the case that when one turns 65 years of age, they will automatically ‘age out’ of the program.

To ensure people do not take advantage of the ODSP, the government requires that all reasonable efforts be made to obtain any financial resources that one may be entitled to receive, which includes both Old Age Security (“OAS”) and the Canadian Pension Plan (“CPP”) benefit. In particular, according to the ODSP Policy Directives for Income Support, ODSP recipients are required to pursue OAS when they turn 65 years of age; income from one’s OAS is deducted dollar for dollar from their income support they receive through the program.

In addition to OAS, certain individuals may qualify for the guaranteed income supplement (the “GIS”). The GIS provides monetary benefits, in addition to one’s OAS pension, in situations where one’s income or combined income with their spouse is particularly low. For individuals 65 years of age and older who have lived in Canada for more than ten years, the amount of income obtained from OAS, the GIS, and CPP, generally exceeds the monetary support they are entitled to receive through the ODSP. Therefore, in the typical situation, when one turns 65 years of age, they are no longer eligible for the ODSP. However, to be sure, it is important to consult with an ODSP caseworker, who will be able to evaluate your particular circumstances and income sources.

Henson Trusts

Sometimes ODSP recipients are also beneficiaries of Henson Trusts created for the benefit of the recipient by a family member. Henson Trusts often have restrictions that stipulate that only so much money (currently approximately $10,000 per year) should be disbursed to the recipient so as not to jeopardize the recipient’s right to receiving ODSP benefits. But if the recipient has turned 65, and their right to ODSP benefits has expired due to the facts noted above in this article, the Trustee may wish to consider whether it is appropriate to increase the disbursements from the Henson Trust.

If you would like to know more about the ODSP , contact our team of skilled and experienced lawyers. 

*This article does not constitute legal advice; always consult legal counsel.