3. Asset Limits Where Pending First Time ODSP Application
(a) Temporary Application of ODSP Asset Caps
If a recipient or spouse in the benefit unit has applied for ODSP then the (more generous) ODSP asset limits (below) applies until the application is "finally disposed of". The 'final disposition' of the ODSP application is not defined, but logically would include either the exhaustion of all reviews and appeals, or the passing of limitation periods (deadlines) for such reviews and appeals if they have not been pursued.
[ODSP Reg s.27]
Recipient ..................................... $5,000
Spouse ........................................ $2,500
Each Additional Dependent ............ $ 500
ODSP asset exemptions are covered in Ch.8 of the Isthatlegal.ca ODSP Legal Guide. They are typically similar in nature to those of welfare, though more generous. One major difference is the treatment of Trust Funds [see s.6(e): "Trust Funds: Trust Funds and ODSP", below].
However these ODSP asset caps only apply in this fashion once per benefit unit. During any subsequent ODSP applications by any member of the benefit unit (even the same one that originally applied) the normal OWA asset limits apply (above) [Reg s.38(2)(3)].
(b) Reimbursement Agreement
When a benefit unit is taking advantage of this provision, the administrator may require - as a condition of granting assistance - a written reimbursement agreement - such that if the member of the benefit unit ultimately loses the ODSP application then their welfare assistance will be retroactively re-assessed according to the welfare asset caps [Reg s.15.1], likely resulting in an overpayment assessment.
However, the amount of payback set out in the reimbursement agreement shall be the lesser of:
4. Asset Exemptions
This section lists and explains assets that are "exempt" from chargeability (ie. do not count towards the asset caps) [Reg s.39].
The case of Director, ODSP v Passaro (Div Ct, 2010) is authority for the proposition that the below-listed asset exemptions should be read narrowly, and not expanded outside of their specific terms - that is, for an exemption to apply it must fall squarely within these listed exemptions. The Passaro case is at odds with long-standing statutory interpretation law from the Supreme Court of Canada that any ambiguity in the interpretation of benefits-conferring law should be read in favour of the benefits-claimant: Rizzo v Rizzo Shoes (SCC, 1998).
Applying asset exemptions can lead to some tricky practical issues, as the exemptions are typically determined by the source of the money when it is received and/or the intended use of the money. To apply such exemptions properly one must 'keep track' of such money after it is normally intermingled with other monies. This problem is called "tracing".
For instance, if your dependent receives a $500 payment for workfare education participation it is exempt as long as the money is used for post-secondary education. This money must - in theory - be kept track of, and at least notionally separated from other asset monies, until it is used for that purpose.
The best way to do this is to think of the exempt monies as in a separate 'account', to be added to and subtracted from, in accordance with the special condition by which it is exempt. A clean way to do this, if possible, is to open a separate bank account (in the example, an "education account") for this money - though that is not always practical for such small amounts. In any event, good records and receipts will help you best prove and utilize the asset exemption.
(b) Principal Residence
The ownership interest of members of the benefit unit in property which is the principal residence of the benefit unit is an exempt asset.
In the case of an owned apartment or commercial building where the benefit unit resides in one apartment, only the portion that the benefit unit resides in as their principal residence is asset-exempt [Reg s.39(1)1,2].
As well - where an asset (any asset) is being sold, and where the administrator approves of the arrangement, the sales proceeds which will be used in the purchase of a principal residence are asset-exempt. Thus for example if a recipient is buying a new house and selling the old, this provision could apply, with administrator approval (which should be sought well before the transactions are executed) [Reg s.39(1)3].
Further, any real estate interests of a "dependent child" (for definition see Ch.2 "Claimants") are exempt as long as "reasonable efforts are being made to sell the property". Of course, any such interest of a dependent child in the principal residence of the benefit unit is exempt in any event [Reg s.39(1)15].
NOTE RE LIENS(c) Assets of Child in Temporary Care
Where a minor (person under 18 years old) receiving temporary care assistance (see Ch.2 "Claimants: Minors in Temporary Care") owns assets (excluding their principal residence), the administrator may exempt these assets from being chargeable if it they are "necessary for the child's health or welfare" and suitable 'arrangements' respecting the assets are made [Reg s.39(1)4].
This provision preserves a child's property from being counted as a chargeable asset (and thus from liquidation) if the property is properly cared for and necessary for the child's health and welfare. The law does nothing to shed light on what "arrangements" are being referred to here, but logically they would include assets being properly managed and preserved by a responsible adult trustee on behalf of the child. Similarly, the child's "health and welfare" should be read broadly to protect the child's property from adverse impact.
If a car is owned by a member of the benefit unit, its value is exempt to the lesser of [Reg s.39(1)5]:
These limits only commence after six month's of continuous welfare collection by the benefit unit, so prior to that the cars are fully exempt as assets [Reg s.39(2)].
(e) Tools of the Trade
Tools of the trade essential to the employment of a member of the benefit unit are exempt assets.
This rule ["essential to the employment"] applies only where the benefit unit member is a waged employee (ie. under an employer) - not when they are engaged in self-employment (ie. as an independent contractor). The next section deals with self-employment, or business, situations [Reg s.39(1)6].
The distinction between "employment" and "independent contracting" (aka self-employment) is explained in detail in the Isthatlegal.ca Employment (Ontario) Legal Guide, Ch.1, s.1.
(f) Business Assets (Self-Employment)
The rules governing exempt business-related assets are a bit confusing.
The law states that assets necessary for the operation of businesses are exempt to a maximum of $10,000 for each business in the benefit unit, and $10,000 for each self-employed person in the benefit unit. It also states that the exemption is no more than $10,000 per business regardless of the number of members in it, and no more than $10,000 per member regardless of the number of businesses they are involved with. The administrator can approve higher exemption limits.
These rules are easy to apply where only one business exists or where only one member of the benefit unit is involved in business/es. However situations of multiple businesses involving multiple members of the benefit unit (while rare) are not clear. In such a case recall that any ambiguity in the statutory interpretation of benefits-conferring legislation goes in favour of the benefits-claimant: Rizzo v Rizzo Shoes  1 SCR 27 - and try to muddle through (the welfare worker will likely be just as confused).
The distinction between "employment" and "independent contracting" or self-employment is explained in detail in the Isthatlegal.ca Employment (Ontario) Legal Guide, Ch.1, s.1.
(g) Student Funding
Portions of student or trainee loans, grants or awards as approved by the administrator are exempt assets, as long as the recipient stays in the program of studies to which the monies relate [Reg s.39(1)10].
See Ch.6 "Income Rules" for a detailed discussion of the treatment of student and education-related income.
Also see (t) below re "Earnings and Training Income Used for Post-Secondary Education".
(h) Pre-paid Funerals
Pre-paid funerals to a maximum value approved by the Director are exempt assets [Reg s.39(1)11]. The present Policy Directive [4.9] sets an unlimited cap on the value of such plans.
(i) Pain and Suffering Damages and Expense Awards
Monies received as compensation for personal injury or death to a member of the benefit unit, as set out below, are exempt to an aggregate maximum of $25,000 [Reg s.39(1)12,12.1,12.2,(3)]. These amounts are:
Treatment of interest accruing on retroactive lump sum payments is discussed in sub-section (s) "Interest on Retroactive Lump Sum Payments", below.
(j) Exempt Government Payments
Payments from the following Ontario and federal government agreements and programs are exempt assets [Reg s.39(1) paras 13,16,19,22-25,27-30].:
(k) Dependent Child Earnings Asset Exemption
The earnings of a dependent minor (under 18 years of age) or the amount paid to a dependent child under a training program [Reg s.39(1)14] are exempt assets. For the definition of "dependent minor" see Ch.2 "Claimants".
Such earnings are also exempt as "income" (see Ch.6 Income Rules: Earnings Income Treatment: Categorical Exemptions").
(l) Loans for First and Last Month's Rent
Loan funds received for the purpose of paying first and last month's rent for necessary rental accomodation for the benefit unit are an exempt asset - as long as welfare is satisfied that it will be so used within a reasonable period. This exemption may require "tracing" to avoid it getting confused with other funds, as is explained in s.4(a) above [Reg s.39(1)17].
(m) Loans for Car Purchase
Portions of any loan advance that the administrator is satisfied will be used in a reasonable period of time to purchase a vehicle that is necessary for a workfare participant to engage in employment assistance activities, or for a benefit unit member to maintain employment, are exempt assets [Reg s.39(1)18].
(n) Monies from MCSS Program Participation to be Used for Post-Secondary Education
Monies paid by the Ministry of Community and Social Services to a dependent minor, independent minor (see Ch.2 "Claimants" for definitions) or any member of the benefit unit who is a workfare participant for successful participation in certain welfare-approved programs are exempt assets - if such monies are used for the person's post-secondary education within a reasonable period as determined by the administrator [Reg s.39(1)20]. The applicable programs are those directed at:
Employment or training program earnings of a dependent adult member of the benefit unit are exempt from treatment as chargeable assets during high school attendence, and thereafter as long as they are being used, or are being saved for use within a reasonable time, for training or post-secondary training [Reg 39(1)(14.1-14.2)].
(p) Registered Education Savings Plan (RESP)
An RESP is an exempt asset where held by a relative (by blood, marriage or adoption) of a member of the benefit unit, for the benefit of the member of the benefit unit [Reg s.39(1)21].
(p.1) Registered Disability Savings Plan (RDSP)
Starting in 2008, the federal Income Tax Act created a new form of tax-deferring registered savings plan, called the 'Registered Disability Savings Plan' ("RDSP").
Funds held in an RDSP for a recipient are exempt assets [Reg s.39(1)21.1].
This is a 2008 MCSS press release on this exemption:
Ontario Supports Registered Disability Savings Plans
(q) Some Insurance Proceeds
Insurance monies received for loss of real or personal property are exempt if the money will be applied in a reasonable time to [Reg s.39(1)26]:
Under some circumstances (financial hardship) persons may access pension funds otherwise "locked-in" under the Ontario Pension Benefits Act. While there is no legal duty to access these funds under the general social assistance "duty to realize available assets", their income and asset chargeability treatment when the funds are in fact accessed is less clear.
See s.7: "Duty to Realize Available Financial Resources" for a fuller discussion of these issues, and the income and asset treatment of such monies.
(s) Interest on Retroactive Lump Sum Payments
Situations where a recipient receives a retroactive lump sum payment - such as an MVA settlement or STD/LTD back-payments - often involve the payment of accrued interest on the delayed payment (retroactive government entitlements usually do not include interest).
The issue can arise in such situations as to whether the interest should be treated in the same way as the principal amount for income and asset purposes, or whether it is 'general' - and chargeable - income. While in my experience it is usual for any interest amounts to be allocated proportionally with the elements of the principal payment, and thus subject to the same income and asset treatment, the issue did arise directly in the case of Mule v Director, ODSP - considered below. The case is essential reading for anyone involved in such a conflict.
. Case Note: Mule and Director, ODSP (Div Ct, 2007)
In Mule v Director, ODSP (Div Ct, 2007) the court was faced with the (relatively) straightforward issue of whether:
... prejudgment interest on damages for pain and suffering form(s) part of the "damages or compensation for pain and suffering" received by an injured person?The significance of whether prejudgment interest formed part of the pain and suffering award is that an amount [$25,000 for OW at August 2010] of such damages (when assessed collectively with some other income types) may be exempt from both income and asset chargeability. However, if interest accruing on such amounts - necessarily paid in a lump sum (usually) years later was not included within the exemption - overpayments and even current ineligibility would result.
Despite resourceful reasoning by the SBT member below, the court ultimately held -at least in the case of pain and suffering awards - that prejudgment interest was to be grouped with the main lump sum and thus within the exemption. While generally sympathetic in its reasoning to the conclusion that interest was an 'indivisible part' of any retroactive lump sum award, the court located it's decision on the safer grounds that the special interest rate treatment (see the Note above) accorded to pain and suffering damages justified such a result:
Since the victim must, of necessity, suffer without compensation for a period of time until his or her damages are capable of assessment, the legislature has determined that the victim will be entitled to additional compensation at the rate of 5 per cent of the non-pecuniary damages award per annum. This award is not tied to the amount of interest that the award could have earned had it been paid on the day that the cause of action arose, but is instead a fixed percentage. Seen in this way, the award of prejudgment interest can be said to form part of the overall compensation package to which the victim is entitled.As noted above, the case is essential reading for anyone facing an argument from the Director that interest on a lump sum retroactive payment is chargeable, with respect to either income or assets.
(t) Earnings and Training Income Used for Post-Secondary Education
Commencing 01 May 2009, earnings of a post-secondary education student, or amounts paid to such a student under a training program, are exempt assets if all of the following conditions are met [Reg 39(1)14.3]:
Earnings and training program income of a recipient (not a dependent) who is under 18 years of age (a minor) [Reg s.39(1)14.4] are exempt assets. The status of minor children as welfare recipients (those 16-18 years old) is discussed in Ch.2, s.4(c): Claimants, Minors, Independent Minors.
(v) Transplant Patient Expense Reimbursement Program Payments
Payments made to any member of the benefit unit under the Transplant Patient Expense Reimbursement Program (under the Ministry of Health and Long-term Care), if they are or will be applied as intended under that program within a reasonable time are exempt assets [Reg 39(1)32].
(w) Ontario Child Benefit Equivalent Act Payments
Payments made under the Ontario Child Benefit Equivalent Act, 2009. This is an Ontario program to match the federal Children's Special Allowances Act (Canada), with money equivalent to Ontario's Ontario Child Benefit (OCB), for children in the care of certain agencies [Reg 39(1)33].
(x) MMAH Ontario Renovates Payments
Payments made under the Ministry of Municipal Affairs and Housing’s Ontario Renovates program, if, in the opinion of the administrator, the payment will be used within a reasonable time and for the purpose for which it was paid [Reg 39(1)34].
(y) RRAP Loans
Loans, including a forgiven loan, or contributions received from the Residential Rehabilitation Assistance Program authorized by section 51 of the National Housing Act (Canada), if, in the opinion of the administrator, the loan or contribution will be used within a reasonable time and for the purpose for which it was given [Reg 39(1)35].
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