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Welfare (Ontario Works) Law |
| Single Recipient | Single Recipient and One Dependent | Each Additional Dependent (with Single Recip.) | Recipient and Spouse | Recipient, Spouse and One Dependent | Each Additional Dependent (with Recip. and Spouse) |
|---|---|---|---|---|---|
| 585 | 1619 | 500 | 1010 | 1694 | 500 |
Note:
Where an applicant is a dependent living with their parents AND has a child of their own (see Ch.2 "Claimants") special circumstances apply. In these cases the dependent collects welfare through the parents' benefit unit (if any, there may be none in which case the parents must support the dependent) but can only collect welfare for the child through a separate benefit unit. In this situation the asset cap for the offspring is $500 each [Reg s.38(1)(e)].
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
It is beyond the range of the current program to explain all the ODSP asset exemptions, but they are typically similar to those of welfare, and if anything are more generous to the recipient. One major difference is the treatment of Trust Funds [see s.6(d): "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 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].
However, the amount of payback set out in the reimbursement agreement shall be the LESSER of:
- the assistance paid to the recipient in those months in which the regular OWA asset cap was exceeded; OR
- the value of the assets in excess of the regular OWA asset cap, calculated at the day of final disposition of the ODSP application.
If the administrator - for whatever reason - fails to secure their repayment interests by requiring such a reimbursement agreement, it would appear that they are NOT entitled to re-assess assistance and claim an overpayment. The agreement to repay provision in s.15.1 is the ONLY way that the administrator can implement this retroactive re-assessment.
In my experience I have not seen administrators insist on the reimbursement agreement during a pending ODSP application.
4. Asset Exemptions
(a) Overview
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 account (in the example, an "education account") for this money - though that is not always practical given 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 a house owned jointly and equally this would be the equity value (sales value minus mortgage and other encumbrances) divided by the number of owners (usually only the other spouse), times the number of such owners who are in the benefit unit (typically the recipient and spouse).
In the case of an owned apartment or commercial building where the benefit unit resides in one apartment, this would be the equity value of the one apartment, as a reasonable share of the total equity value of the apartment building. Only that portion of real estate that is used by the benefit unit as their principal residence is 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 exempt. Thus for example if a recipient is buying a new house and selling the old (or selling any asset for that matter), 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
Lien requirements have been abolished. To discharge existing liens see s.5 "Welfare Security Requirements: Liens", below.
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.
(d) Automobiles
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]:
- the value of the recipient's net interest (ie. equity interest) in it, or
- $10,000.
If additional cars are owned by members of the benefit unit, the same exemption applies to each of those cars - but ONLY if they are required for employment or workfare participation by other members of the benefit unit.
These LIMITS only commence after six month's of continuous welfare collection, 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 applies 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].
(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 [1998] 1 SCR 27 - and try to muddle through (the welfare worker will likely be just as confused).
(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 sets this maximum at $5,000.
(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:
- "compensation for pain and suffering or expenses incurred or to be incurred as a result of an injury to or the death of a member of the benefit unit" from "tort" personal injury claims such as auto accidents, slips and falls, assaults, etc;
- compensation "for loss of guidance, care and companionship as a result of death or injury" from 'dependent tort claims' under the Family Law Act (where family members claim compensation for another family member's injury or death); and
- non-economic loss (NEL) awards under the (former) Worker's Compensation Act and the Workplace Safety and Insurance Act, 1997 (these are lump sum awards which are similar in nature to pain and suffering awards) for workplace accidents.
- s.13(1-3,7,8) of Reg 672/90 (accidents before 01 Jan 1994);
- s.19 of Reg 776/93 (accidents after 31 Dec 1993 but before 01 Nov 1996);
- s.12 of Reg 403/96 (accidents on or after 01 Nov 1996);
- s.12 of Reg 34/10 (effective 01 Sept 2010).
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].:
- The Helpline Reconciliation Model Agreement;
- The Multi-Provincial/Territorial Assistance Program Agreement;
- The Grandview Agreement.
- Extraordinary Assistance Plan (Canada)
- Ontario Hepatitis C Assistance Plan (applies where recipient contracted the disease before 01 January 1996 and after 30 June 1990)
- Pre-1986/Post-1990 Hepatitis C Settlement Agreement (December 14, 2006) (applies to any payments under this agreement except those for: loss of income under section 2.05 of the Agreement, loss of services under section 2.06 of the Agreement and compensation to dependants under section 4.04 of the Agreement)
- 1986-1990 Hepatitis C Settlement Agreement (15 June 1999) (applies to lump sums paid except those for loss of income or a loss of support)(applies where recipient contracted the disease between 1986 and 1990)
- Opportunities Fund for Persons with Disabilities" (Human Resources and Development Canada), if the payment has been or will be applied to expenses incurred for participation in a welfare-approved employment-related activities.
- Walkerton Compensation Plan, except payments for future lost income.
- local Disaster Relief Committee (established under the Ontario Disaster Relief Assistance Program) if the payment will be used within a reasonable period for the purpose for which it was made. Payments under this program for loss of income are not exempt.
- compensation, other than compensation for loss of income, related to a claim of abuse sustained at an Indian residential school, including compensation received under the Indian Residential Schools Settlement Agreement
- a "personal credit" within the meaning of section 5.07 of the Indian Residential Schools Settlement Agreement.
- grants, items or services (ie. their value) provided for energy efficiency and conservation by gas distribution utilities, local distribution companies, municipalities, the Ontario Power Authority, Ontario or Canada.
- payments under the "Quest for Gold" - Ontario Athlete Assistance Program.
(k) Dependent Child Earnings Asset Exemption
The earnings of a dependent minor 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
Loans received for the purpose of paying first and last month's rent for necessary rental accomodation for the benefit unit is an exempt asset - as as long as welfare is satisfied that it will be so used in a reasonable period. This exemption may require "tracing", as explained 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 . This exemption may require "tracing", as explained above [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 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:
- successfully completion of a high school diploma,
- developing employment-related skills, or
- further developing of their parenting skills.
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 an MCSS press release on this new 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]:
- purchase or epair of exempt assets;
- purchase or repair of any asset necessary for the health or welfare of a member of the benefit unit, as approved by the administrator;
- purchase of repair of an asset whose ownership by members of the benefit unit does not put the benefit unit over the asset cap;
- additional living expenses, including temporary shelter costs, if insurance-covered damage renders the recipient's primary residence unfit for habitation; or
- debt obligations of a member of the benefit unit.
Under some circumstances (financial hardship) persons may access pension funds otherwise "locked-in" under the 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
. Overview
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 delated 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 (as different types of monies are treated quite differently), 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 April 2008] 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 retroactive ineligibility would result.
Note:
"Prejudgment interest" (as distinct from "post-judgment interest", which is self-explanatory) is a concept used in civil litigation (lawsuits). It operates to give a successful plaintiff interest on damage awards (which are always made later) for the period between the filing of the lawsuit and the issuance of judgment. Under the Courts of Justice Act, s.128, [and Rules of Civil Procedure R53.10], the rate for pain and suffering (called "non-precuniary loss") is five percent. This point is relevant to the case.
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 its decision on the safer grounds that the special interest rate treatment (see the Note above) accorded pain and suffering damages especially justified such treatment:
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]:
- the income is earned or paid while the student is a member of either an OW or an ODSP benefit unit;
- the income is paid during school attendence or earned or paid within 16 weeks preceding attendence (commonly, summer earnings);
- the program of study is either:
- approved for student loans eligibility under s.7 of Reg 268/01 under the Ministry of Training, Colleges and Universities Act [Note: this does not mean that a student loan has been received by the student for the program, just that the program is one approved by the Ministry generally for student loan eligibility];
or
- at an education institution approved under s.8 of Reg 268/01 that prepares the student for application for registration by a regulated profession under Schedule 1 of the Fair Access to Regulated Professions Act, 2006 OR Schedule 1 of the Regulated Health Professionals Act;
- the course load is at least 60% of a full course load,
and
- the income is used for the approved program of study (above).
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]. 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 [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].
Chapter Continues here ...
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