A Plan For People With Disabilities Receiving Social Assistance Benefits

When a family member with a disability receives provincial social assistance (income support) benefits, financial and estate plans must take the rules of the social assistance program into account if these benefits are to be protected.

What Income or Assets can a Person Have and Still be Eligible for Income Support Benefits?

Generally, government considers all income and assets that a person may have when determining eligibility for income support benefits. However, the government does allow people to earn some income and keep some assets and still receive benefits. These include the following:

  • Income from employment up to $250 per month for people receiving Extended Benefits and $150 per month for people receiving Transitional Assistance Benefits. Any employment income earned above these amounts will be deducted dollar for dollar from the monthly cheque.
  • Up to $1,000 in “liquid assets” for a single person receiving Transitional Assistance Benefits and up to $3,000 in liquid assets for a single person receiving Extended Benefits (that is, people who are certified disabled, deaf or blind). “Liquid assets” are assets such as money, bank accounts, assets that can be sold or other investments (for example, Canada Savings Bonds, RRSPs, and interest accounts).
  • The cash surrender value of the life insurance policy up to $2,000
  • A person’s home that is used as a principal residence and the property on which the home is located
  • A motor vehicle that is used for routine transportation, work, medical reasons, etc.
  • Property which is necessary for a person to earn a living (for example, equipment, tools, etc.).
  • The principal and the accumulated interest of a documented trust fund up to $200,000 established for the person receiving Extended Benefits (certified disabled, deaf or blind) to help that person live in his or her home or community.
  • Assets in a Registered Disability Savings Plan including contributions, Grants or Bonds provided by the federal government, and income earned by the Plan.
  • Up to $800 per month from a documented trust and/or a Registered Disability Savings Plan. (The monthly income of up to $800 per month from a trust only applies to people who are receiving Extended Benefits).
  • Additional amounts from a documented trust and/or Registered Disability Savings Plan that are to be used to help a person to live in his or her home or community and which are approved in advance by the Department of Social Development.

What are the Rules About People Having Access to Trust Funds and/or RDSPs?

The following is a summary of the rules and policies affecting trust funds and RDSPs under the provincial government’s income support program. This summary is based on a review of income support regulations, policies, and discussions with officials from the Department of Social Development.

  • Only people who are entitled to receive Extended Benefits (that is people certified disabled, deaf or blind) are entitled to have assets in trust funds while maintaining their eligibility to receive income support benefits and health card benefits.
  • Any person who is eligible to have an RDSP can have assets in an RDSP and maintain their eligibility to receive income support benefits.
  • A trust fund can be established in a living trust (established while you are alive) or testamentary trust (established in a Will)
  • When the value of the trust is under $200,000, a trust can accumulate interest income that is not required for beneficiary in a given year without affecting income support benefits.
  • Trustees of a trust fund permitted under the income support rules must have access to both the capital and income of the trust for the benefit of the beneficiary.
  • A person who is receiving income support benefits is required to authorize the Department of Social Development to receive information about the trust fund through a trust fund reporting form or from a financial institution.
  • The trust capital and accumulated interest must be intended to be used solely to assist a person with a disability to live in his or her home or community. This means that the trust fund (including the interest it earns) can be used for general living expenses associated with housing or life in the community.
  • Up to $800 per month can be used or paid from a trust fund and/or a Registered Disability Savings Plan without affecting a person’s monthly cheque.
  • Additional withdrawals from a trust fund and/or a Registered Disability Savings Plan can be made only with the advanced written approval of the Department of Social Development. These additional amounts must be used to help the person live in his or home or the community.
  • A trust fund should be able to receive additional funds or be replenished without affecting eligibility for income support benefits so long as it does not exceed $200,000.
  • If money is left in a trust or an RDSP at the death of the person receiving income support benefits, this will be expected to pay for the cost of the person’s funeral and burial expenses.

How the Social Assistance Rules Can Help People with Disabilities

If, in 2011 a person with a disability had $800 per month in income from a trust and/or an RDSP and received the maximum amount under the Extended Benefits, he or she would have the following monthly income:

  • $701 – Income from Extended Benefits and Disability Supplement
  • $800 – Income from a trust and/or RDSP
  • $1501 – Total monthly income

Under this scenario, a person would have a yearly income of $18,012.

In addition, under current rules a person receiving Extended Benefits can also earn up to $250 per month from employment without having his or her government benefits affected. Added to the income he or she could have from a trust and/or RDSP and government benefits, this would mean:

  • $701 – Income from Extended Benefits and Disability Supplement
  • $800 – Income from a trust and/or RDSP
  • $250 – Income from employment
  • $1751 – Total monthly income

Under this scenario, a person would have a yearly income of $21,012.

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