ODSP Investment and Savings Presentation

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This webinar is brought to you by
CLEONet
www.cleonet.ca
CLEONet is a web site of legal information
for community workers and advocates who
work with low-income and disadvantaged
communities in Ontario.
About our presenter…
Sallie Hunt is staff lawyer at Northwest Community Legal
Clinic, a legal clinic that provides services for low income
people in the Kenora and Rainy River Districts. Before
coming to the clinic, she practiced family and criminal law
in St. Catharines, Ontario and worked at the Law Society of
Upper Canada and at Legal Aid Ontario in Toronto.
Enhancing Quality of Life
for a Person with a Disability
on ODSP Disability Benefits
Sallie Hunt
Northwest Community Legal Clinic
1-800-403-4757
TOPICS:
Investments
o Exempt Assets
o Investments for people receiving ODSP
benefits
o RESPs & RDSPs
Locating ODSP Policy Directives
To find ODSP Policy Directives – Go To:
Ministry of Community and Social Services at
http://www.mcss.gov.on.ca/mcss/english/index.htm
o Click on Ontario Disability Support Program
o Click on ODSP policy directives
o Click on Income Support Directives
http://www.mcss.gov.on.ca/mcss/english/pillars/
social/directives/ODSP_incomesupport.htm
Exempt Income/Assets on ODSP
o $5,000 for a single person
Income was increased to $6,000 from gifts,
voluntary payments, payments from trusts or
life insurance policy, honorariums or windfalls
o Owning a home or Principal Residence
o Vehicle
o 2nd vehicle if required for work
o CCTB, NCBS, OCB, etc.
Exempt Assets on ODSP
o Payments from any source for disability-
o
o
o
o
related items
Pre-paid funeral
Earnings & Assets of dependent children
Earnings & Assets of a dependent adult
while attending school
Locked-in RRSPs and locked-in pensions
Exempt Assets on ODSP
o Trust fund from insurance proceeds or
inheritance*
o Life insurance policy*
o Pain & suffering awards/settlements*
o WSIB non-economic loss (NEL) awards*
*To a Maximum of $100,000
Investments Allowed on ODSP
RESPs*
 Registered Education Savings Plans
*Lifetime Limit of $50,000
o CESGs + CSBs
RDSPs**
 Registered Disability Savings Plans
**No Maximum Limit
RESPs – What is an RESP?
RESP – Fed Gov’t incentive program for parents and family
to save for a child's post-secondary education
RESPS include: 1. Canada Education Savings Grant (CESG)
o CESG* pays 20% (or more) of annual contributions made
to an RESP – to a maximum of $500/child
($1,000/child if unused from previous year)
* Lifetime Limit of $7,200
If funds are taken out of an RESP prematurely  must repay
the Gov’t of Cda for the CESG (unless child/beneficiary is
already attending a post-secondary institution)
RESPs – include:
2. CLB – Canada Learning Bond
CLB pays $500 first year and $100 per year* until
child is 15
o If child qualifies – born after Dec. 31, 2003, & receives
the National Child Benefit Supplement (NCBS)
*To a Maximum of $2,000
o The first deposit of the CLB includes an extra $25
to cover the cost of opening an RESP
o You do not have to contribute money to receive
CLB payments – JUST OPEN an RESP
RESPs – To Open an RESP
o It costs $1.00 to open an RESP account for
a child with a RESP provider (most
financial institutions)
o You will need a Social Insurance Number
(SIN) for you and your child
o If you do not have a SIN – Apply at your
local Service Canada office or go online to
www.servicecanada.gc.ca
RESPs – To Open an RESP
o You do not need a bank account to open an
RESP
o There are several types of RESPs – Family
Plan, Individual Plan or Group Plans
o There is no age limit for opening an RESP
o An RESP can stay open for a maximum of
26 years (31 years for a person with a
disability)
RESPs – Contributions
o You will not be taxed on the amount you
contribute to your RESP
o Interest paid on any money borrowed to
contribute to an RESP cannot be deducted
o You do have to pay taxes on the money you
earn in the RESP plan as interest
For more info on RESPs go to:
http://www.cra-arc.gc.ca/E/pub/tg/
rc4092/rc4092-e.html#P52_7449
RESPs – Registered Education
Savings Plans for those on ODSP
o Any member of the family benefit unit can
have an RESP  Exempt Asset
o Any money or gifts paid into an RESP 
Exempt Asset
o Fed Gov’t matching payments - CESG or
CLB into RESP Exempt Asset
o Beneficiary of RESP can be changed from
one child to another
RESPs – Registered Education
Savings Plans for those on ODSP
o RESP funds used for Education Costs  Exempt
 can be used for part- or full-time study
o Some of the RESP funds can be used as an
Educational Assistance Payment* to fund a
Qualified Educational Program
*To a Maximum of $5,000
Educations Costs: Tuition & other fees, books,
instructional supplies & equipment, transportation,
and disability-related expenses
RESPs –Child does not continue
Education after high school
If your child does not continue education after
high school :
(1) Wait as your child may decide to study
later
(2) Transfer the money to a sibling’s RESP
(3) Transfer money to an RRSP or
(4) Consult with your RESP provider about
withdrawing your savings
RDSPs – What are Registered
Disability Savings Plans?
RDSP is a savings plan for parents and others
to save for a person who is disabled and
eligible for the Disability Tax Credit
o Contributions to an RDSP are not tax
deductible
o Contributions can be made until the
disabled/beneficiary turns 59 years of age
For more info go to: http://www.craarc.gc.ca/tx/ndvdls/tpcs/rdsp-reei/
RDSPs – To Set Up an RDSP
First - Qualify for federal Disability Tax Credit
(DTC)
o Complete Form T2201, Disability Tax Credit
Certificate - http://www.cra-arc.gc.ca/E/pbg/tf/t2201/
o Take the form to a qualified health professional
o Once completed send it to the Winnipeg Tax
Centre
o This can be sent at any time during the year
RDSPs – Contributions
Contributions
o No annual limit
o Contributions are limited to a lifetime
amount of $200,000
RDSPs include contributions from:
1. Canada Disability Savings Grants (CDSG)
2. Canada Disability Savings Bonds (CDSB)
CDSG + CDSB Contributions
1. Canada Disability Savings Grants (CDSG)*
o Fed Gov’t will match annual contributions to a maximum
of $3,500/year and to a lifetime CDSG limit of $70,000
2. Canada Disability Savings Bonds (CDSB)*
o Bonds up to $1,000/year  provided for low- & modestincome families, to a lifetime limit of $20,000
o No requirement to contribute to RDSP to access CDSBs
*Can be paid until the Beneficiary turns 49
RDSPs -Withdrawal of Funds
Contributions made to an RDSP are not
included as income for the beneficiary when
withdrawn
But, the Grant (CDSG), Bond (CDSB) and
any investment income earned  will be
included in the beneficiary’s income for tax
purposes when the money is withdrawn
RDSPs – Registered Disability
Savings Plans for those on ODSP
o All funds in RDSPs  Exempt Asset
o no matter who makes payments to RDSP
o Canada Disability Savings Grants (CDSG)
& Bonds (CDSB)  Exempt Asset
o Income (interest) earned & reinvested in
RDSPs  Exempt Asset
o All withdrawals from RDSPs  Exempt
Asset/Income for ODSP (but not for income
tax)
This webinar was brought to you by
CLEONet
For more information visit the Social
Assistance and Pensions section of
CLEONet at www.cleonet.ca
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visit:
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