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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