Ontario Disability Support Program (ODSP) Law
(01 January 2019)
Chapter 7 - Income Rules
(a) Income Concepts
(b) Income Allocation
- Income Reporting
- Earnings Income Treatment
(b) Source Deductions
(c) Basic Earnings Exemption
(d) Child Care Expense Exemption
(e) Disability-Related Expenses
(f) Deemed Income During Labour Disputes
(g) Categorical Exemptions
- Rent Paid to a Claimant
(c) Boarding (with meals)
(e) Adequacy of Rent Amount
(f) Income Exemption For Children and Grandchildren on Social Assistance on their Own
- Immigration Sponsorship Income
(b) Current Treatment
- Canada Child Benefit (CCB) and Ontario Child Benefit (OCB)
(b) Shared CCB/OCB
(c) Transition Child Benefit (TCB)
- Exempt Government Income
(a) Payments from Ontario
(b) Payments from Canada
- Other Exemptions from Income
(a) Rent Received From a Child or Grandchild in Receipt of Social Assistance
(b) Hardship Payouts under Pension Benefits Act
(c) Personal Injury-Type Awards
(d) Special Agreements
(e) Administrator-Approved Expenditures
(f) Twelve-Month $10,000 Income Exemption
(g) Religious, Charitable and Benevolent Donations
(g.1) Gifts and Voluntary Payments for Important Listed Purposes
(h) Home and Vehicle Modification Grants
(i) Disaster Relief Committee Payments
(j) Insurance Payments
. Insurance Payments on Loss
. Life Insurance Payments on Death
. Life Insurance Interest or Dividends
. Personal Injury-Type Awards
(k) Trust Income
. Trust Principal Pay-outs
. Asset-Exempt Trust Income
. Income to Recipient AS Trustee
(l) Interest on Basic Exempt Assets
(m) Payments for Non-Benefit Unit Child
(n) Registered Disability Savings Plan (RDSP) Income
(o) Energy Efficiency Grants, Items or Services
(p) Nova Scotia Home for Colored Children Settlement Agreeme
(q) Child Support Payments
- Loans as Income
(a) The Legal History of Loans as "Income"
(i) "Income" Defined
(ii) Rubino v Metro Toronto
(iii) 1993 Post-Rubino Amendments
(iv) Present Law and the Implied Exclusion Argument
(b) Types of Loans
(c) Exempt Loan Income
- Student and Education-Related Income
(b) Student and Education-Related Income Treatment
(c) Earnings and Training Income (Dependents)
(d) Earnings and Training Income of Post-Secondary Students (Any Benefit Unit Member)
- Common Income Situations
(a) Motor Vehicle Accident (MVA) Settlements and Awards
. Case Law
. Handling Undifferentiated Settlements
(b) Child and Spousal Support
(c) Business Income Treatment
. Case Law
(d) Interest on Retroactive Lump Sum Payments
. Case Note re Mule v Director, ODSP
Any monies or things of value received by or to be received by a recipient or any member of their benefit unit should be considered from several perspectives. These include: 1. reporting duties (see Ch.6: "Information Eligibility"), income treatment (in the month in which they are received or allocated: see Ch.7: "Income Rules") and asset treatment (in subsequent months: see Ch.8: "Asset Rules"). It is an extremely common mistake to ignore any or all of these considerations, often resulting in disentitlement and/or overpayment assessments (see Ch.11: "Director Decisions") and in some cases fraud prosecution (see Ch.14: "Fraud and Prosecutions").
(a) Income Concepts
Generally, monthly "income" for a benefit unit is the total value all payments, items and services received by (or on behalf of) or available to any and all members of the benefit unit" in that month [Reg s.37] There are however numerous exemptions and special treatment rules, which make up the bulk of this chapter.
The first of these "exceptions" is to make sure that the monies "received" or "available" to satisfy the definition of "income" above. The concept of "received" is self-evident, while that of the "availability" of both income and assets is discussed in Ch.8, s.6: "Asset Rules: Trust Funds" in relation to the Henson case.
Otherwise, while the general rule is that income is deducted dollar-for-dollar, some income must be considered in light of the income deductions and special treatment rules BEFORE the amount to actually be deducted from "budgetary requirements" is known. This gives rise to the useful concept of "chargeable income". "Chargeable income" is the amount of income that will be deducted from "budgetary requirements" (see Ch.3 "Income Support") to determine the amount of income support to be received (subject to any overpayment or support orders deductions: see Ch.10, s.3(h): "Applications and Procedures: How ODSP is Paid: Limits on Alienation and Execution of Income Support".
Examples (b) Income Allocation
Take the simple example of a single person with rent of $500 and chargeable income in the month of $1200. The maximum shelter component for such a person is $445, so they will get that plus the basic allowance flat amount of $554, so together their "budgetary requirements" are $999 ($445 plus $554). But the deductible income is $1200, so they will be disentitled for that month.
If however the next month the deductible income is only $400, they can re-establish eligibility and will get a cheque for $599 ($999 - $400). They will continue to get income support (and the important "benefits") as long as "budgetary requirements" exceed chargeable income.
Note: There are some "extensions' of health benefits that may apply even where chargeable income exceeds BRs (see Ch.4 "Benefits").
The case of Ontario Disability Support Program v Passaro (Div Ct, 2010), while considering an asset (not an income) exemption, can be read as authority for the proposition that the income exemptions set out in this chapter should be read narrowly, and not expanded outside of their specific terms, That is, for an exemption to apply in favour of a recipient 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).
The normal rule is that any payments received are treated as income in the month in which they are received. However not all income comes in regular monthly payments, so rules have been developed to address this. If income paid in a lump sum relates to a number of months (eg. back-pay), then it is re-allocated or 'spread' over those months [Reg s.37(3)] [except Canada Child Tax Benefit Income (CCTB), see that topic below].
Where income received in a lump sum is attributable in whole or part to periods when the recipient was not receiving ODSP, then those portions should not be assessed as income for ODSP purposes - even if the income was actually received while ODSP was being paid. Remember though that any lump sum back payments received, while they are "spread" for purposes of income treatment, must still be considered for their impact of the recipient's asset situation (see Ch.8 "Asset Rules").
For example, if a recipient started collecting ODSP on 01 June, and in August receives a retroactive (back) employment insurance (EI) cheque for the months from March to July, then only the portion of the cheque that relates to June and July must be considered for its ODSP income 'chargeability'. However, in September the total assets still held by the recipient - from EI and otherwise - must be assessed under the asset rules and maximums.
2. Income Reporting
It is a "condition of eligibility" (ie. disentitlement can result from non-compliance) that recipients provide information to the ODSP Director regarding a recipient's income and potential income [Reg s.12] (see the extensive discussion in Ch.6 "Information Eligibility").
As the definition of "income" (above) includes "available" income (such as debts owing to the recipient, or legal claims against others by the recipient), that too is subject to reporting duties. The Director may want to exercise its right to establish a security interest over such potential monies before they are received (see Ch.8, s.5 "Asset Rules: ODSP Security Requirements").
Failure to promptly report income is a major area of social assistance fraud prosecution (see Ch.14 "Fraud and Prosecutions"). Claimants who reason that the income 'will be exempt from deduction anyway' and therefore 'it does not need to be reported' are risking a great deal and quite often deluding themselves. Remember that it is not "chargeable" income that must be reported - but "income" (ie. gross income).
The safest approach for a recipient is to:
Let the Director make its determination on how it will treat the money (ie. as chargeable in whole, part or not at all). If the recipient disagrees with that determination then that should be appealed (see Ch.12: "Appeals and Other Remedies") to the Social Benefits Tribunal through the normal procedure. In my experience (and I am often critical of many ODSP practices) ODSP usually make the right call the first time around, and in fact are often generous in their interpretation of the law and policy in favour of the recipient.
- report ALL income as soon as it is received (in writing, keeping a copy);
- report ALL claims and future potential income (in writing, keeping a copy) as soon as the claim or the potential arises or as soon thereafter as is reasonable in the circumstances (eg. report a motor vehicle accident promptly after it occurs);
- income received should not be spent until ODSP has a chance to rule on its treatment.
These practices will go a long way to protect the recipient from income-related fraud allegations.
3. Earnings Income Treatment
"Earnings" for present purpose includes both:
'Earnings' however does not include benefits or payments under any income replacement scheme or program, such as "employment insurance benefits and benefits or payments under the Canada Pension Plan and the Workplace Safety and Insurance Act, 1997." [Reg 38(2,3)].
- gross employment and training program income (ie. wages before source deductions), and
- NET income (income minus legitimate expenses) from self-employment (ie. a business).
Once this "gross" earnings figure is determined, four staged levels (ie. applied in succession) of exemptions apply to it. These staged exemptions reflect a policy of encouraging and assisting disabled recipients to work by allowing them to keep some of their earnings free from 'chargeability' [Reg s.38].
The determination of 'gross' employment and training program income (to which the following four deduction rules apply) is usually relatively straightforward. However the determination of "net income" from a business (to which these four rules then also apply) is less so, involving as it does a whole range of additional, preliminary deduction issues very akin to the same determination required at income tax time. For a further discussion of the law respecting business expense deductions, see s.11(c) below: "Common Income Situations: Business Income Treatment".
That said, the four stages of earnings exemption are:
There are also some categorical income exemptions explained in subsection (f) ("Categorical Exemptions") below.
- source deductions;
- flat-rate deduction;
- child-care deductions;
- disability-related expenses.
Note also that recipients and benefit unit members who are receiving earnings income, commencing employment, or leaving ODSP for employment reasons may also be eligible for some of several "employment-related benefits": see Ch.4, s.2(g): "Benefits: Listed Benefits: Employment-Related Benefits".
(b) Source Deductions
This deduction reduces gross earnings income by amounts for: income tax, CPP, employment insurance, pension contributions and union dues.
For employees, this is really just a determination of "net" employment income (ie. after "source deductions"), and is usually as simple as looking at the amount payable on a paycheque or pay statement.
For business income however the availability of this deduction at all is less clear, perhaps only for the formalistic reason that they are not taken in the form of "source deductions", as is the case with their employed counterparts. This formalism can be circumvented by including the liability for these items in the determination of "net" business income in the first place. This issue is discussed further below [see s.11(c): "Common Income Situations: Business Income Treatment"].
(c) Basic Earnings Exemption
The first $200 of any net employment earnings (what you have left after you apply the source deduction exemption, above) by each adult member of the benefit unit are exempt income. After that, 50% of the remainder is also exempt [Reg 38(1)].
(d) Child Care Expense Exemption
This exemption is applied to earnings income left after applying the "source deductions exemption" and the "basic earnings exemption", above.
Child care expenses to the maximums set out below are deducted from earnings income for purpose of income deduction IF they meet ALL of the following conditions:
Maximums per child:
- they are expended for dependent children or for children in temporary care [for these see the Welfare (Ontario Works) Guide at Ch.2, s.6],
- they have not or will not be otherwise reimbursed,
- they are necessary to enable a recipient, spouse or dependent adult (See Ch.2 "Claimants") in the benefit unit to engage in employment or employment assistance activities (workfare),
- they are not paid to another member of the benefit unit, and
- they have not been reimbursed under the Child Care Tax Credit under subsection 8 (15.2) of the Income Tax Act or otherwise.
Note that any amount paid as an "up-front child care" benefit (see Ch.4: "Benefits") is not considered "reimbursement" for the purpose of determining deductions from income under this provision [Reg s.44(4)]. This means that the parent can receive this benefit and still claim the full child care employment earnings deduction. This rule increases income support, as it reduces 'chargeable' employment earnings.
(e) Disability-Related Expenses
- the actual amount paid if it is paid to a person licensed under the Child Care and Early Years Act, 2014 or to an extended day program run by a school board; or
- otherwise $600.
This exemption is applied to earnings income left after applying the "source deductions exemption", the "basic earnings exemption" and the "child care expense exemption", above.
Expenses "attributable to the person's disability that are necessary to enable the person to be employed" may also be applied to reduce chargeable income, to a maximum of $1000 per month [Reg 38(1)(1)v]. This reduction does not apply if the expenses are otherwise covered (ie. reimbursed).
As well, expenses "that relate to accommodating the person under section 17 of the Human Rights Code" may not be so deducted. These are employer's expenses in modifying the workplace or job to accomodate the person's disability. This provision prevents the employer from passing these expenses on to the recipient (and thus on to ODSP), as they are the legal responsibility of the employer under the Human Rights Code.
(f) Deemed Income During Labour Disputes
Where income is reduced by a labour dispute (either a strike or a lock-out) - and even though no earnings are received - ODSP will "deem" (ie. count as paid) income from that source in the amount that it was received in the month before the dispute. Note however that strike pay in any amount less than the deemed income will NOT be added to this.
This is practically very harsh, and operates on the logic that the government does not want to subsidize a labour dispute on the side of the worker [Reg s.38(paras.5,6]. However in the case of a lock-out - where the worker has no control over the employer's actions - the policy seems further unfair.
A person facing such a situation understandably might think that quitting their job would circumvent this problem by ending their involvement in the "labour dispute". However earners who are non-disabled adults (NOT recipients) have a conflicting duty to "make reasonable efforts to accept and maintain full-time, part-time or casual employment for which he or she is physically capable" [OW Reg s.28(1). This duty is imported into ODSP law for non-disabled adult members of the benefit unit by ODSP Reg s.6, which adopts OW Reg s.28(1) (see Ch.14: "Workfare and Employment Supports"), and on non-compliance is "punishable" by a three (first "offence" or six (subsequent "offences") suspension of the offending member's income support (or eligibility in the case of a single recipient).
Persons in such a situation may feel caught between a "rock and a hard place". One potential (though relatively drastic) solution to this conundrum spring to mind (short of accepting the quit penalty, above). As the duty to 'maintain employment' is conditioned by the adjective "reasonable", so one might simply approach ODSP (in writing, ALWAYS keeping a copy), explaining the circumstances and asking for their "opinion" on the merits of quitting (essentially an "advance ruling" - so useful in the income tax situation).
Single recipients in such a situation may also wish to seek temporary (one-half month) "emergency assistance" under the welfare (Ontario Works) program [see that program at Ch.8, s.4: "Applications and Procedures: Emergency Assistance"]. This "solution" is even suggested at the end of the current Policy Directive 2.7: "People Involved in Labour Disputes".
In such difficult and complex situations, recipients might hope for sympathetic and helpful interpretations of the law from their workers - and failing which, from the Social Benefits Tribunal which - during the period required for an appeal to be heard - can order the Director to provide "interim assistance" at the pre-dispute rate to the benefit unit [see Ch.12: "Appeals and Other Remedies].
(g) Categorical Exemptions
Some forms of income are categorically exempt from chargeability.
Employment and training program earnings of the following are not included in "income" (for definitions see Ch.2 "Claimants"):
As noted above in s.1(f): "Deemed Income During Labour Disputes", where a recipient is involved in a labour dispute (strike OR lock-out), ODSP will "deem" them as having income despite them not in fact having it. Note however that additional "strike pay" in any amount less than the deemed income is treated categorically as exempt income.
- a member under 18;
- an adult member who is attending secondary school full-time [Reg s.38(1)3,4]. [see also 's.10(b): Student and Education-Related Income Treatment']; or
- an amount paid under a training program to a member of the benefit unit who is a resident of a territory that is designated as a geographic area under section 2, 2.1, 2.2, 2.3, 2.4, 2.5 or 2.6 of Ontario Regulation 136/98 (Designation of Geographic Areas and Delivery Agents) made under the Ontario Works Act, 1997 for a period up to 12 months per training program shall not be included in income.
4. Rent Paid to a Claimant
This section discusses the treatment of rent as INCOME when it is charged by a recipient to a 'tenant', with the recipient being either a home owner or as a "chief tenant" subletting to another person.
These rules are distinct from those that apply when that recipient's own shelter EXPENSES are calculated by ODSP, in which case the normal shelter expense rules apply (see Ch.3 "Income Support: Renter/Owners: Shelter").
As well, there are rules discussed in Ch.3 about the allocation of rent expense paid by a recipient when they are "sharing" accomodation jointly with other people ("Shared Accomodation Shelter Expense Allocation"). Situations of 'sharing' can be practically very similar to situations of subletting, and are distinguished by the relationship of the residents with the "main" landlord. If both persons are jointly and equally liable to the "main" landlord then it is a situation of two co-tenants "sharing", but if only one is directly liable to the "main" landlord then you probably have a subletting relationship. These situations are often - but not always - clarified by whose name is on the written lease, assuming one exists. Note that Ontario landlord and tenant law provides for completely legal verbal leases and in such cases the detailed nature of the relationship between all the parties need to be examined.
A recipient who is both a home owner/"main tenant" and who 'rents' to another person is subject to both the shelter determination AND the rent income calculations. The two different sets of rules apply independently of each other.
Recipients can receive rent from "tenants" who are lodgers, boarders or full tenant renters - or even by renting non-residential properties such as garages. The distinctions between these different categories of "tenants" are discussed in Ch.3, s.2,3: "Income Support"), as they relate to the differing "shelter" treatment of recipients for purposes of assessing income support amount.
For chargeability purposes, rental income to a recipient is calculated as 'chargeable' as a percentage of what is actually received. The percentages differ by the type of arrangement, as follows.
Note for both "boarders and lodgers" (discussed below) that a minimum $100 chargeable income applies, regardless of the actual "rent" paid (even if it is zero). This is commonly known as a "boarder charge" and sometimes applies when an otherwise dependent adult is temporarily assessed as "financially independent" due to temporarily excess income and/or assets [see Ch.2, s.4(b): Claimants: Dependent Adults: Financial Independence"].
"Lodging" includes simple accomodation (usually a just a room with shared kitchen and bathroom) without meals provided. Chargeability of lodger income is 60% of the actual lodger rent received, but no less than $100 for each lodger (the "boarder charge").
For example, if the rent charged is $300, only $180 ($300 x 60%) counts as chargeable income. However if the rent charged is $150, then the $100 minimum applies because 60% of $150 is only $90 [Reg s.39(1)3].
(c) Boarding (with meals)
"Boarding" includes simple accomodation (usually just a room with shared kitchen and bathroom) with meals. Boarder income is assessed at 40% of the actual amount received, but no less than $100 per boarder.
For example, if the boarder is charged $300, only $120 ($300 x 40%) counts as chargeable income. However if the charge is $200, then the $100 minimum applies because 40% of $200 is only $80 [Reg s.39(1)2].
The term "renters", for present purposes, covers situations where the recipient owns the premises rented, or where the recipient is themselves a "chief tenant" (and is then 'sub-letting' to 'sub-tenants'). "Renters" (usually) get no meals but have exclusive possession of self-contained accomodation (ie. their own private kitchen and bathroom). As noted above, "renting" can also involve renting land, a garage or other non-residential property - though this is less usual.
Renter income is assessed at 60% of the actual amount received, with no minimum assessment. For example, if the rent charged is $500, $300 ($500 x 60%) is chargeable income [Reg s.39(1)1].
(e) Adequacy of Rent Amount
While there is no fixed amount minimum "renter charge" like the $100 "boarder charge" discussed above, ODSP will expect a recipient's tenant (be they boarder, lodger or full tenant) to pay a market rent under the general ODSP legal duty to maximize all "available financial resources" [see Ch.8, s.7: "Asset Rules: Duty to Realize All Available Resources"].
Thus, where the rent charged to such a "tenant" is markedly different from what the market would expect, ODSP will be suspicious that low rent is being claimed to minimize deductions while actual rent money might be paid to the recipient 'under the table'.
In such a situation ODSP will typically reduce (though they can even cancel) income support for breach of the "duty to realize all available resources". Remember that "income" includes "amounts of income deemed to be AVAILABLE to members of the benefit unit" [Reg s.37(2)], which would allow ODSP to "deem" income at a rate higher than that claimed by the recipient - effectively reducing the income support payable.
These situations can get tricky because the recipient's tenant usually has the right not to have their rent increased above annual percentages established by the province - so the issue may involve landlord and tenant law that is beyond the range of this present program. It is best in these situations to present the rental plans to ODSP beforehand for their approval.
(f) Income Exemption For Children and Grandchildren on Social Assistance on their Own
If a recipient provides accomodation (either as lodging, boarding or renting) to their or their spouse's child or grandchild - AND if such child or grandchild is themselves on social assistance (ie. welfare or ODSP) - then any rent paid is totally exempt income [Reg s.39(2)].
Note that if such a child or grandchild "tenant" is receiving welfare (Ontario Works) - as opposed to ODSP - then there are special "living with parents" rule which provide that recipients living with their parents receive assistance equivalent to the "boarder/lodger" rates (see the welfare program at Ch.3, s.12 "Basic Assistance: Living with Parents"), which eliminates most of the shelter component of assistance. Together these rules operate to prevent the welfare administrator from 'paying' the 'landlord' rent through the child and then (unless rent is actually paid regardless) having ODSP deduct it from the chargeable income of the parent/grandparent recipient. They also reflect part of official ODSP legal policy that "families ... share responsibility" for supporting recipients [Act s.1].
5. Immigration Sponsorship Income
Where a recipient is a sponsored immigrant, it is usual for the sponsor to provide an undertaking to the federal government to support the immigrant. This is essentially a contract with the federal government to support the immigrant financially.
ODSP has been concerned for a long time over situations where the sponsored recipient lives in accomodation owned or controlled by a defaulting sponsor. In such cases ODSP is put in the position of paying rent to the defaulting sponsor (through providing a shelter component to the recipient) while at the same time the sponsor ignores their duties to help support the recipient.
Until a Regulation change on 15 December 2004, when a recipient neither resided with their immigration sponsor nor lived in accomodation owned or controlled by the sponsor, ODSP would impose an income charge (deduction) to the greater of (a) the amount paid to the recipient by the sponsor, or (b) $100. The result would be that where the sponsor abandoned the recipient, they would still be deducted $100 regardless. There were exceptions where the sponsor was on social assistance (OW, ODSP, OAS or GAINS) and where the relationship between the sponsor and the recipient had broken down due to family violence.
However these provisions generally had the negative effect of penalizing sponsor-abandoned recipients who had NO on-going relationship with their sponsors. After litigation, this law has been acknowledged by the government as being discriminatory.
The recent amendments have addressed this situation, however they are complex.
Case Note: (b) Present Treatment
Where a sponsored immigrant makes use of social assistance, the assistance provider has a statutory entitlement, which is contractual in nature, to recover the amount of assistance provided as a debt: Mavi v Canada (SCC, 2011). This right may be enforced by filing a ministerial certificate in federal court, or any provincial court of competent jurisdiction. The decision to pursue debt recovery is subject to a duty of procedural fairness, as follows:
 In the exercise of this discretion, which Parliament has made clear is narrow in scope, the Crown is bound by a duty of procedural fairness. The content of this duty is fairly minimal. The Crown is obliged prior to filing a certificate of debt with the Federal Court (i) to notify a sponsor at his or her last known address of its claim; (ii) to afford the sponsor an opportunity within limited time to explain in writing his or her relevant personal and financial circumstances that are said to militate against immediate collection; (iii) to consider any relevant circumstances brought to its attention keeping in mind that the undertakings were the essential conditions precedent to allowing the sponsored immigrant to enter Canada in the first place; and (iv) to notify the sponsor of the government’s decision. This is a purely administrative process. It is a matter of debt collection. There is no obligation on the government decision maker to give reasons. .....
Firstly, where the sponsored recipient does NOT reside in premises owned or controlled by the sponsor then normal dollar-for-dollar income deductions apply to any amount provided by a sponsor to a recipient.
However, where the sponsored recipient does reside in premises controlled or owned by a defaulting (or partially-defaulting) sponsor then these ("new") rules provide that there shall be a "deemed income" applied to reduce the shelter component of the recipient's income support - though in a manner different from the previous system. But like the old system, the "deemed income" application can be excepted in a number of situations where it would be unfair to apply it.
As the rules governing the "deemed income" are really just a convoluted way to reduce the budgetary requirements of recipients to whom they apply, they are explained in detail in Ch.3 "Income Support: Sponsored Immigrants".
6. Canada Child Benefit (CCB) and Ontario Child Benefit (OCB)
The Canada Child Benefit (CCB) is a monthly payment made by the federal government to families based on such things as family size, ages of the children, net family income, region of the country lived in, and child care expenses. The Ontario Child Benefit (OCB) is a similar program at the Ontario provincial level. Both are tax-free and calculated based on income tax filings.
Families (whether separated are not) are under a duty to pursue CCB/OCB as an income source under ODSP law, and thus they have to file income tax, regardless of the amount of income they receive. An initial CCB application (ie. when born or on moving-in) will have to be filed. In the time it requires to approve the CCB for a child, a Transitional Child Benefit ("TCB") [see below] may be paid for up to four months.
From July 2008 forwards, with the introduction of the Ontario Child Benefit (OCB), the chargeability of the CCB was greatly simplified such that it became fully non-chargeable (ie. you get to keep it all) [Reg s.42(3.4)]. The OCB was fully exempt from chargeability from it's start in 2008.
The OCB is administered and paid through the same federal system that administers and pays the CCB, and shares most features with it. The CCB/OCB 'year' runs 01 July to 30 June, and is payable on 20th of month.
(b) Shared CCB/OCB
Where separated parents have shared custody of a child they will have shared CCB as well, as verified by the Canada Revenue Agency ("CRA"). Shared CCB will result in shared Ontario Child Benefit ("OCB") as well, and the 'shared' child benefit calculations will also be used by ODSP for calculation of the recipient's income support.
(c) Transition Child Benefit (TCB)
Sometimes ODSP recipients are slow to avail themselves of the full CCB/OCB programs (or sometimes the federal government is slow), typically (in the case of non-payment) due to non-filing of income tax (which is where they are claimed), or for the fact (in the case of an under-payment) that they were in some type of transition such as having a new child or moving into Ontario.
But CCB/OCB benefits are under the 'duty to realize available resources' [see Ch.7, s.7; Reg 11(2)(b.1)]. Thus if a recipient didn't have their CCB/OCB applications fully in-pay they would be essentially penalized by having the CCB/OCB entitlement 'deemed' to be in pay, even though it wasn't. To allow for this, ODSP came up with a "transition child benefit" ('TCB'), which was an attempt by ODSP to ensure that those not fully up-to-speed are not unduly penalized [Reg s.45.3]. These TCB provisions operate for four months (typically) to allow the recipient to correct the CCB/OCB shortfall.
Recipients are not required to make any application for the TCB, as the ODSP director has the duty to calculate and pay it without a request being made. The TCB thus differs from the OCB in that it will be paid on the ODSP cheque, not through the federal CCTB system.
. Categories of Recipients Not Eligible for TCB
Note that the following categories of recipients are not eligible for the TCB [Reg s.45.3(3)]:
. Shared-Custody Splitting of TCB
- emergency hostel (shelter) residents (this does not include residents in interval or transition homes for abused women: see immediately following) [re such residents see Ch.3, s.8(c)];
- residents of interval or transition homes for abused women if they are no longer under the three-month 'still living at home' budgetary requirements extension. This extension can be longer at the discretion of the administrator, and is meant to preserve a woman's ability to pay home expenses for a reasonable time to preserve the option of returning to that home. This extension is explained further at Ch.3, s.8(c).
However, where two persons, one not in the benefit unit, are shared-custody parents for CCB purposes, then the amount of TCB for the shared-custody children is reduced by 50% each [Reg 45.3(4)]. Similarly, where two persons share joint physical custody on an approximately equal basis (as determined by the Director) over a child for which TCB is payable, then the TCB is split 50/50 between the two people [Reg s.45.3(6)]. Shared custody and shared CCB eligibility are discussed in more detail in relation to the definition of a 'dependent minor' at Ch.2, s.5.
. Repayment of TCB on Receipt of Retroactive OCB and/or CCB
Where retroactive OCB and/or CCB is received, and TCB has also been in pay for the same months, an effective 'double-payment' of TCB results with the retroactive payment. Rather than assessing this an an 'overpayment' (the normal procedure when a recipient is overpaid) and chasing down the recipient to recover those funds, ODSP deals with it by modifying the "budgetary requirements" ('BRs') of the recipient to compensate. Remember, budgetary requirements are the primary calculation of what a recipient 'gets', or their income support.
It's like saying that the normal BRs of the recipient for say, shelter, are not $500 (just an example) but $300 (also just an example), for a number of months until the TCB is effectively 'paid off' [Reg 36.2(1-3)].
However, the reduction in budgetary requirements only continues for three months. Any amount of excess remaining after that period is waived by the administrator (ie. it is forgiven and will not be recovered).
No reduction in budgetary requirements will be applied to reduce them to zero or less (which would eliminate eligibility for the month), but rather budgetary requirements will be deemed to be at least $2.50. This is done to preserve continuity of eligibility for benefits, particularly the drug card - and is functionally equivalent to an 'extended health benefit' such as is discussed in Ch.4, s.3 [Reg s.36.2(4)].
7. Exempt Government Income
(a) Payments from Ontario
The following is a list of payments from Ontario that are exempt income [Reg s.41]:
(b) Payments from Canada
- Welfare (Ontario Works) assistance in the First Month of ODSP Eligibility.
Welfare (Ontario Works) is paid in advance (ie. at the beginning of the month to which it applies), while ODSP is paid in arrears (at the end of the month to which it applies). Thus when a welfare recipient is granted ODSP eligibility they will normally already have received their welfare cheque for that month. That welfare assistance will not be deducted from their ODSP cheque for that first month of eligibility [Reg s.41(1)10].
Situations of retroactive ODSP eligibility grant may be more complicated (eg. when an SBT appeal is won) - see Ch.10, s.4 "Applications and Procedures: Date of Grant".
- Welfare (Ontario Works) or ODSP Workfare Payments
Spouses and dependent adults of ODSP benefit units may be required to engage in Ontario Works workfare activities (see that program, Ch.11 "Workfare"). Similarly any benefit unit member may voluntarily participate in welfare or similar ODSP "employment support". Any payments made to members of the benefit unit under such programs are exempt (non-chargeable) income [Reg s.41(1)3,11].
- ODSP payments for Severely Handicapped Children
This is a special program under ODSP (see Ch.5: "Assistance for Children with Severe Handicaps"). Payments for children with severe disabilities are exempt from treatment as chargeable income.
- Payments from a Children's Aid Society, any other approved agency, or the Minister to foster parents for the direct care of the foster children, including CAS payments made on behalf of children receiving CAS services but not in care and to persons with ordered custody of children [Reg s.41(1)4,4.1,4.2,5].
- Any payment received under the Ministry of Community and Social Services Act.
The Ministry runs a variety of programs. Of these, families on social assistance may avail themselves of the Ontario Child Care Supplement for Working Families (OCCSWF). Such payments are exempt as income, but must be deducted from child care expenses otherwise claimable under earnings exemptions treatment [see s.3(d) above].
- Ontario Tax Credits payments or refunds.
These may be received by a recipient directly as part of an Income Tax refund, or indirectly as a credit within the income tax calculation. In either event they are exempt as income [Reg s.41(1)8,12].
- Permanent partial disability supplements under the (old) Workers' Compensation Act.
- WCB or WSIB awards for non-economic loss ("NEL" awards).
These are generally lump sum Workers' Compensation Board or Workplace Safety and Insurance Board awards for "non-economic loss" ("NEL") - typically for "general suffering" (as opposed to "FEL" wage-replacement monies which tend to be paid monthly). These awards, along with civil lawsuit and Family Law Act "personal injury"-type damage and expense awards are subject to an aggregate $100,000 "cap" for income exemption purposes [see s.8(c): "Other Exemptions from Income: Personal Injury-Type Award", below) [Reg s.41(13),43(2)].
This $100,000 cap may be exceeded with approval of the Director for income used or to be used for:
- expenses actually and reasonably incurred or to be incurred as a result of injury to or the death of a member of the benefit unit,
- expenses for disability-related items or services for a member of the benefit unit, including disability-related education or training expenses.
Note as well that the Director will require that such "NEL" award income exemptions be set out in an annual report filed by the recipient documenting "all income and expense transactions relating to the assets for the year" [Reg s.43(5)].
It is sometimes possible to convert or "cash-in" regular monthly WSIB/WCB "FEL" ("future economic loss") payments (for wage-replacement) into a lump sum (called "commutation"). HOWEVER - without prior permission from the Director such cash-ins will be treated either as a breach of the "duty to realize available resources" or of the "duty not to improvidentally dispose of assets" [see Ch.8, s.7 and 8]. As well they will result in a large income charge when received and asset charge thereafter. While it is tempting to commute such income streams to avoid their on-going deduction from income support, it almost always results in long-term disentitlement. Contact ODSP in writing beforehand in all such situations.
- Ontario Child Benefit Payments received under s.8.6.2 of the Income Tax Act (Ontario).
- Payments made under the "Quest for Gold - Ontario Athletes Assistance Program" [Reg s.43(1)26]
- Payments received under the Services and Supports to Promote the Social Inclusion of Persons with Developmental Disabilities Act, 2008, if the payment is used or will be used within a reasonable time period to purchase the services and supports for which the payment was intended [Reg 41(1)20].
- Ontario property and sales tax credit payments or refunds received under any of,
i. section 99 of the Taxation Act, 2007 ["Non-Senior Property and Sales Tax Credits"],
ii. section 100 of the Taxation Act, 2007 ["Seniors Property and Sales Tax Credits"],
iii. section 101.1 of the Taxation Act, 2007 ["Non-Senior Energy and Property Tax Credits"],
iv. section 101.2 of the Taxation Act, 2007 ["Seniors Energy and Property Tax Credits"], and
v. section 104.11 of the Taxation Act, 2007 ["Ontario Sales Tax Credit: Definitions"].
- An Ontario sales tax transition benefit received under section 104.12 of the Taxation Act, 2007 ["Ontario Sales Tax Transition Benefit"].
- Payments made under the Transplant Patient Expense Reimbursement Program funded by the Ministry of Health and Long-Term Care, if the payments are used or will be used, within a reasonable period as determined by the Director, for the purpose for which they were intended [Reg 43(1)27].
- A payment made in accordance with the Ontario Child Benefit Equivalent Act, 2009 [Reg 41(1)18].
- A payment or refund received under section 103.1 of the Taxation Act, 2007 for the children’s activity tax credit [Reg 41(1)21].
- Payments made by Ontario pursuant to an aboriginal land claim settlement agreement [Reg 43(1)28].
- Payments made by a service manager designated under the Housing Services Act, 2011 to be used as a rent supplement or a housing allowance, where approved by the Director,
rent supplements funded by the Ministry of Health and Long-Term Care that are used to pay for permanent supportive rental housing for persons who are homeless or at risk of becoming homeless [Reg 41(1)19,19.2(2)].
Such payments are only exempt to the extent that they supplement the difference between the shelter component of budgetary requirement afforded by ODSP and the true shelter expenses (ie. only to the extent of a shelter expenses 'top-up').
- Payments made under the Ministry of Housing’s Ontario Renovates program [Reg 41(1)19.1].
- Payments made under the Community Homelessness Prevention Initiative administered by the Ministry of Housing, up to the personal needs allowance (PNA) rate [$140 at January 2016] per month (the PNA is typically paid monthly to institutional residents), if all of the following criteria are satisfied [Reg 43(1)29]:
- the payment is made by a service manager designated under the Housing Services Act, 2011;
- the payment is made to residents of a place that provides permanent housing with limited supports to vulnerable adults who require some supervision and support with the activities of daily living; and
- the payment is made for the personal needs of those residents (the PNA rate is meant to be that portion of budgetary requirements for needs other than shelter and food).
- Payments made under the Community Homelessness Prevention Initiative administered by the Ministry of Housing by a service manager designated under the Housing Services Act, 2011 and applied to [Reg 43(1)30]:
- rent deposits, including first and last month’s rent,
- establishing a new principal residence,
- maintaining the health or welfare of a member of a benefit unit in his or her current residence,
- arrears on any of the costs of shelter listed in subsection 31 (1), or
- other services, items, payments or costs related to housing and homelessness, as approved by the Director.
This program is intended in part to replace the Community Start-Up and Maintenance Allowance (CSUMB) [see Ch.4, s.2(e)], which ended 31 December 2012. As put out by the province at least, it will be available to a broad range of low-income Ontarians, not just recipients of social assistance.
- Ontario Trillium Benefit payments received under section 103.3 of the Taxation Act, 2007.
- Youth Jobs Strategy payments, made by either or both of the Ministry of Economic Development and Growth and the Ministry of Advaned Education and Skills Development, if, in the opinion of the Director, the payment will be used within a reasonable period and for the purpose for which it was paid;
- Northern Health Travel Grant Program grants, administered by the Ministry of Health and Long-Term Care, to the extent that the grant amount exceeds the amount otherwise provided for medical transportation for the same trip [see Ch.4, s.2(b) "Medical Transportation")].
The following is a list of federal payments that are exempt income [Reg s.42]:
- GST rebates [s.122.5 of the Income Tax Act (Canada)].
- By policy, income tax refunds are considered exempt income.
Except for Ontario tax credits (which are exempt as such, above), refunds are usually a refunding of monies 'overpaid' by the taxpayer/recipient. As such they have normally already been assessed for ODSP income impact, or were originally received before the time when the recipient was on ODSP.
- A death benefit payment under the Canada Pension Plan, or the Quebec Pension Plan.
- A payment received from the Department of Indian Affairs and Northern Development (Canada) or from a band for board and lodging of a student attending a secondary school not on the reserve. These payments are made under the federal "Boarding Home Policy" to the adult who runs a boarding home in another community where native child must live to attend school.
- A payment received pursuant to the Indian Act (Canada) under a treaty between Her Majesty and a band, other than funds for post-secondary education.
- A payment made by a band as an incentive bonus for school attendance to any dependant who is attending school.
- A payment from a municipality or a Tribal Council, on behalf of the Department of Indian Affairs and Northern Development (Canada), received between October 2005 and September 2006 by an evacuee from that part of the Fort Albany No. 67 Reserve on which members of the Kashechewan First Nation reside.
- By policy, payments made under the Skills Development Employment Benefit under the Employment Insurance Act are exempt income.
- By policy, payments made under the Oppourtunities Fund for Persons with Disabilities (under Employment and Social Development Canada) are exempt income.
- Payments made on surrender or partial surrender (designation) of title rights in a reserve to the federal government under s.40 of the Indian Act (Canada) are exempt.
- A payment received under the Extraordinary Assistance Plan (Canada).
This is a federal program to financially assist HIV/AIDS-infected individuals. See the Health Canada website for details.
- A benefit received under the Universal Child Care Benefit Act (Canada).
This program commenced July 2006 and provides $100 to families for each child under the age of 6. It will automatically be sent to families already receiving the CCTB (see s.6 above). While labelled a "child care" benefit there are no restrictions as to how the money may be used, an issue that was politically contentious as the funding was largely taken from that previously designated for organized child care facilities.
- A payment by Canada into a Registered Disability Savings Plan (RDSP).
This program started in 2008, and acts as a tax-deferral mechanism similar to RRSPs [Reg s.42(17)].
As is explained is s.8(n) below, third parties gifts towards RDSPs and rolled-over RDSP interest are also exempt income. As well, any cash-out of an RDSP by a recipient is exempt income.
- A payment made as a tax credit under the Working Income Tax Benefit under s.122.7 and 122.71 of the Income Tax Act (Canada).
- Payments made by Canada pursuant to an aboriginal land claim settlement agreement [Reg 43(1)28].
- Athlete Assistance Program payments, administered by the Department of Canadian Heritage.
- An orphan's benefit payment under the Canada Pension Plan [Reg 42(4.1)].
- A disabled contributor’s child’s benefit payment under the Canada Pension Plan [Reg 42(4.2)].
- Payments made under the federal Thalidomide Survivor's Contribution Program [Reg 42(18)].
- An orphan's pension payment under the Quebec Pension Plan or a payment under a similar program in another jurisdiction [Reg 43(1)36].
- A disabled contributor's child pension payment under the Quebec Pension Plan or a payment under a similar program in another jurisdiction [Reg 43(1)37].
Note 1: Any federal exempt loans are listed in s.9(b) "Exempt Loan Income", below.Continue to Next Part of Chapter
Note 2: Any federal student-related "income" is discussed in s.10 "Student and Education-Related Income", below.
Note 3: Treatment of the Canada Child Tax Benefit (CCTB) is dealt with separately above in section 6.