Under the Employment and Assistance for Persons With
Disabilities Regulation, B.C. Reg. 265/2002 (Regulations), a
disabled person's eligibility for government disability
assistance (Eligibility) is dependent on several factors, including
the assets they hold, their income, their receipt of cash gifts,
and the expenditure of trust money held on their behalf. On
December 1st, 2015, changes to the Regulations came into
force, making it significantly easier for individuals with persons
with disabilities (PWD) designation in British Columbia to receive
financial support from their families and other sources without
putting their Eligibility at risk.
The Old Regulatory Framework
Previously, an individual in British Columbia receiving
disability assistance could only hold $5,000 of non-exempt assets
($10,000 for a couple where both persons have PWD designation)
before losing their Eligibility under the Regulations (Asset
Limits). Furthermore, only one time cash gifts were exempt from
income for an individual with PWD designation in determining their
Eligibility. This meant families could not provide regular payments
to a person with PWD designation to assist them with their
expenses, without potentially jeopardizing the person's
With low Asset Limits and only one-time cash gifts permitted, it
was very difficult for persons with disabilities to receive
financial support from their families or other sources while
continuing to receive government disability benefits. For estate
planning purposes, these restrictions meant that the only way a
person could leave any kind of substantial gift to a person with
PWD designation without impacting their Eligibility was through the
creation of a trust. However, even the support that could be
provided through non-discretionary trusts was limited, as there is
a lifetime cap of $200,000 that could be contributed to
non-discretionary trusts for the person with PWD designation and
only $8,000 could be spent annually on costs to promote a disabled
person's independence from a non-discretionary trust. As a
whole, the previous regulatory framework meant that families of
persons with PWD designation had to choose between financially
supporting their disabled family member and ensuring that the
disabled person's Eligibility remained intact.
The New Regulations
Under the new Regulations, the Asset Limits in British Columbia
have been raised to $100,000 for individuals with PWD designation
and to $200,000 for couples where both individuals have PWD
designation, and the restrictions on receiving cash gifts have been
removed. This means that persons with disabilities can receive
financial support throughout their lifetimes and receive smaller
inheritance gifts outright without any impact on their Eligibility.
Further, although the $200,000 lifetime cap on non-discretionary
trusts for persons with PWD designation was kept in the new
Regulations, the $8,000 cap on annual spending for
independence-promoting costs from non-discretionary trusts has been
eliminated in British Columbia. These changes make it significantly
easier for families to support their disabled family members both
in life and in death, and eliminate barriers to the financial
stability of persons with disabilities throughout the province.
It should be noted, however, that even with increased Asset
Limits, the creation of trusts may still be necessary to preserve a
disabled person's Eligibility. For instance, if an inheritance
gift will be large enough that the person with PWD designation
receiving the gift will have assets that exceed the Asset Limit,
then a gift of up to $200,000 could be made in a non-discretionary
trust. Furthermore, if an inheritance gift will be large enough to
exceed the Asset Limits and the $200,000 non-discretionary trust
limit, then a testator should consider creating a completely
discretionary trust, often referred to as a "Henson
trust", in order to preserve the person with PWD
The author would like to thank Vancouver student-at-law, Emily
McClintock, for her significant contributions to this article.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
High net worth families often use family trusts for estate and succession planning. But because they are deemed to have sold all of their assets on each 21st anniversary, family trusts in effect have a tax life span of only 21 years.
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).