How Much Can I Keep
If you are living on ODSP you can only keep so much assets
Cash on hand or in the bank plus non-exempt assets : $5000 for a single recipient, $7500 for a couple and $500 for each dependant other than a spouse.
With the Director's approval, the allowable asset level for a benefit unit may be increased to permit the purchase of an item that is necessary for the health or well being of a member of the benefit unit or for disability related items or services.
A number of assets are exempt including but not limited to a person's interest in a principal residence, one motor vehicle, a prepaid funeral, the cash surrender of life insurance policies, tools of the trade, student loans, and a loan used for the purchase of an exempt asset, a principal residence or an asset necessary for the health or welfare of a member of the benefit unit.
Under ODSP, the asset ceiling is $5,000 for a single person, $7,500 for a couple and $500 for each dependant other than a spouse. All interest earned on assets within this ceiling is exempt from income under ODSP and may accumulate to the allowable asset limit for a particular benefit unit. Interest left to accumulate is also treated as an asset in the following month.
Valuable collectibles such as stamps, coin collections and antiques are treated as assets. If these valuable collectibles, together with other assets, exceed the permissible amount of assets, the applicant/recipient will be required to make reasonable efforts to dispose of such items at a fair market value. Where these efforts are deemed by ODSP staff to be satisfactory, the value of these items will not affect eligibility as long as such efforts continue. ODSP staff should review these cases at least annually. Antiques that are necessary for personal use (e.g. furniture) are not considered assets.
Necessities of living and items such as furniture, clothing and household effects, which are considered necessary for the reasonable functioning of the household, are exempt as assets.
ODSP staff may approve an accumulation of assets that is greater than the prescribed asset limit in order to purchase items or services necessary for the health of a member of the benefit unit or for disability related items and services up to a maximum of the sum of the prescribed asset limit plus the amount needed for the items and services.
The principal residence of an applicant/recipient or the proceeds from the sale of a principal residence, provided those proceeds are used for the purchase of another principal residence within 12 months from the sale, are exempt as an asset.
A member of the benefit unit is entitled to retain, as an exempt asset, inheritances or the proceeds of a life insurance policy which are placed in trust for the benefit of that person, to a limit of $100,000. Interest or dividends earned on the capital amount of the trust may be reinvested in the trust provided the capital does not exceed the $100,000 limit. The combined capital of the trust and the total cash surrender value of a life insurance policy, if held, cannot exceed $100,000. See Directive 4.7 Funds Held in Trust for additional information.
A member of the benefit unit is entitled to retain, as an exempt asset, the total cash surrender value held in an insurance policy to a limit of $100,000. Dividends earned on the policy may be reinvested in the policy provided that the cash surrender value does not exceed $100,000. The total cash surrender value of an insurance policy together with the capital of a trust cannot exceed $100,000. For the treatment of funds or dividends received as a result of the demutualization of insurance policies, please see Directive 4.8 Life Insurance Policies.
A member of the benefit unit is entitled to retain, as an exempt asset, monetary awards for pain and suffering as well as for any expenses actually and reasonably incurred as a result of injury to, or the death of, a member of the benefit unit. The maximum allowed is $100,000. In exceptional circumstances, a greater amount may be approved if that amount is to be used for expenses related to the injuries. Payments under the Workers Compensation Act and the Workplace Safety and Insurance Act are NOT considered as compensation for pain and suffering and are therefore not exempt as an asset. See Directive 4.6 Compensation Awards for additional information.
Pre-paid funerals for an applicant/recipient and spouse are exempt as an asset. See Directive 4.9 Pre-paid Funerals for additional information.
Applicants/recipients or members of the benefit unit who are self-employed are allowed $20,000 in business assets that are necessary to the operation of the business. Inventory, stock and raw material are examples of business assets. If more than one person in the benefit unit has an interest in or operates the same business, the amount allowed for business assets remains $20,000. If one person in the benefit unit has an interest in or operates more than one business, the business asset exemption cannot exceed $20,000. Under exceptional circumstances, the Director may approve an amount greater than $20,000. See Directive 5.4 Self-Employment Income for additional information.
Tools of the trade that are essential to the operation of a business or to the employment of a member of the benefit unit, are exempt as an asset. Business vehicles used exclusively for the business are treated as tools of the trade and are therefore exempt assets. See Directive 5.4 Self-Employment Income for additional information.
To determine whether a Registered Retirement Savings Plan is available as an asset, it is necessary to obtain written notification from the financial institution confirming whether the funds are accessible or are "locked-in".
If the applicant/recipient is able to access RRSP funds, regardless of the penalty involved, then he/she will be expected to do so. The value of the RRSP funds will be treated as an asset and the person may then be deemed ineligible due to assets above the allowable limit. RRSPs may be in the form of a Guaranteed Income Certificate (GIC), mutual fund or other type of investment. In summary, if the RRSP is accessible, these funds must be redeemed and used for the purpose of self-support or some other purpose permitted by the Regulation. If the RRSP is used to save for a health related item or service for a member of the benefit unit, the exemption under Section 27(2) of the ODSP Regulation may be considered.
If the RRSP is locked in, it is not considered an asset for the purpose of determining
eligibility. Changes to the Pensions Benefit Act in 1987 provided, among other things, the opportunity for individuals to transfer their retirement funds into another lifetime retirement pension. These funds normally originate from an employer's pension fund. Various reasons exist for transferring these funds into another lifetime retirement pension, including the company ceasing business operations or an employee leaving a company after a fixed age or number of year's service.
These pension funds may be transferred out of the employer's plan only on the condition that they remain "locked-in". This means that funds may be used for only one purpose, namely to purchase a lifetime retirement pension, commencing no earlier than age 55, the retirement age fixed by the Pensions Benefit Act.
In some cases the minimum age of 55 may be raised. This will appear in the "locked-in agreement" between the employer and the financial institution. Until the member of the benefit unit reaches the retirement age, he/she may have control of the investment but no access to the funds. RRSPs originating from an employer's pension fund, which are locked in will be exempt from consideration as an asset.
To be exempt, the information obtained from the financial institution should state that the RRSP is truly locked-in because it originally derived from an employer's pension fund.
Upon reaching the retirement age specified on these locked-in RRSPs, the applicant/recipient may set up a term annuity or life annuity in order to realize any income that might be available on a monthly basis. Income received from these types of annuities will be deducted at 100%.
Changes to the Pension Benefits Act in 2000 allow for access to locked-in retirement accounts under specific circumstances of financial hardship. However, the Act specifically provides that a person's entitlement to access funds from the specified locked-in retirement accounts shall not be relevant when determining the income or assets available to that person under any other Act. This means that specified locked-in retirement funds that may be available to an ODSP applicant or recipient are not considered a financial resource that the applicant/recipient has an obligation to pursue.
If an ODSP recipient voluntarily chooses to access these funds, ODSP rules regarding income and assets must be applied.
Listed below are the reasons that a person may access a locked in pension fund and in these circumstances there is no income or assets charge under ODSP.
· Facing eviction from a principal residence as a result of arrears of rent
· Facing eviction from a principal residence as a result of debt secured on a principal residence
· Needing to cover reasonable non-reimbursed medical expenses for the treatment of illness or medical disability
· Needing to cover reasonable expenses for renovations or alterations of a principal residence made necessary by illness or physical disability
· Requiring first and last month’s rent to obtain a principal residence
· Receiving a total income from all sources before taxes of less than $25,000 per year
The pension funds may also be used for education or training expenses.
Loans for acceptable purposes such as for the purchase of assets that are exempt, (e.g. motor vehicles, principal residences) are exempt as income and assets. Loans for the payment of first and last month’s rent are also exempt as income and assets. See Directive 5.10 Loans for additional explanation and income exemptions.
Incentive payments ($500) under LEAP are
funded under the Ministry of Community
and Social Services Act and are exempt as income. The payment is also
exempt as an asset if used by the young parent for post-secondary education or
if it is invested in a Registered Education Savings Plan (RESP) for the young
parent’s dependent child. LEAP incentive payments placed in an RESP for the
young parent’s dependent child may consist of an
ODSP income support arrears received due to
retroactive ODSP entitlement are exempt as income and are not considered an
asset for six months. These arrears may be used for
approved purposes such as disability related items or services, expenses for
health related reasons, the purchase of household items and debt reduction.
Expenses should be verified and noted on file.
After six months, the
remaining income support arrears may be considered an asset.
However, in reassessing
eligibility, every consideration should be given to section 27(2) which
provides discretion to allow the accumulation of assets in order to purchase an
item or service that the Director considers necessary for the health of a
member of the benefit unit or for disability related items or services.