What are Ontario Disability Support Payments?
In Ontario, disability benefits are known as “Ontario Disability Support Payments” or “ODSP”. They are available to Ontario residents who are at least 18 years of age, are in financial need and meet ODSP’s definition of a person with a disability or are a member of a Prescribed Class.
To be eligible for ODSP, an individual’s assets cannot exceed $40,000 if single, or $50,000 for a couple. Accordingly, we frequently field inquiries from claimants and lawyers about how a settlement or award of damages for personal injury or death in excess of the prescribed limits will affect ODSP eligibility.
Are Settlements and Awards Exempt from Consideration for ODSP Eligibility?
Since August 1, 2017, settlements or awards in any amount which are in respect of claims for future medical care and pain and suffering (and any accompanying prejudgment interest) are fully exempt from consideration for ODSP eligibility. In other words, these amounts do not count against the ODSP asset limits set out above.
Settlements or awards in respect of claims for loss of income, however, are not exempt and are treated as income and/or assets for the purposes of calculating ODSP eligibility. This includes: Income Replacement Benefits, Non-Earner Benefits, past or future loss of income, WSIB awards for past or future economic loss, and prejudgment interest on any of the foregoing.
While exempt funds may be put towards an exempt asset (such as a principal residence) and maintain their exempt status, if the funds are invested, any interest or income earned on them will be considered income and an asset (subject to any other applicable exemptions). Similarly, if exempt funds are used to purchase a non-exempt asset, that asset will count against the asset limit, potentially disentitling the individual to ODSP.
Structured settlements funded with exempt settlement funds are not considered assets and structure payments received by the ODSP recipient up to the initial funding amount of the structure are not considered income by ODSP. For example, if an award of $250,000 for pain and suffering is placed in a structure, the monthly payments generated by that structure are fully exempt for the purposes of ODSP eligibility until the cumulative total of the payments over time exceeds $250,000. If the cumulative total of the payments never exceeds $250,000 before the ODSP recipient turns 65 (when ODSP recipients generally transition to Old Age Security), all of the structure payments will be fully exempt as income for ODSP.
As a result, structured settlements can be used by ODSP recipients to invest their exempt settlement funds without the interest earned counting against the income or asset limits, assuming the cumulative total of the payments does not exceed the amount invested in the structure prior to the recipient turning 65.
For more information on the types of structured settlement plans available for an injured claimant, please contact Henderson Structured Settlements by phone at 1 (800) 263-8537, email at henderson@henderson.ca.
