People with disabilities may need help negotiating the tricky transition from the Ontario Disability Support Program (ODSP) to old age benefits after age 65, Ottawa disabilities and estate planning lawyer Kenneth Pope tells AdvocateDaily.com.
Pope, principal of Kenneth C. Pope Law, says he frequently receives calls from family members of elderly ODSP recipients concerned that their relative’s benefits will be cut off when they hit 65. However, he is able to offer them some reassurances.
“ODSP payments do not stop when you turn 65,” Pope explains.
Still, he says it is typically in an ODSP recipient’s best interests to make the switch to the Old Age Security (OAS) pension and Guaranteed Income Supplements (GIS) since together they can total more than $17,000 annually. By contrast, the maximum ODSP payment is just under $14,000 per year.
“You have to apply for these things, but once they come into effect and ODSP is notified, only then do ODSP payments cease,” Pope says.
He says the only issue usually stopping ODSP recipients from switching are worries that they will lose the medical coverage that comes with their benefits, but Pope points out that senior citizens are already covered under the Ontario Drug Benefit Program, which operates with an identical formulary to ODSP’s.
Pope says family members of those with disabilities may want to discuss the drafting of a power of attorney for property to assist with the management of finances, since OAS and GIS are both paid directly to the recipient, as opposed to ODSP payments, which are typically paid to a trustee who can handle funds on behalf of the recipient.
“This may involve an application to the court if the person is incapable,” he says.
In addition, Pope warns that the GIS portion of the new benefits, which accounts for about $10,000 each year, will be offset — at a rate of 50 cents for every dollar earned — by any other income a disabled person may have, including investment income or CPP payments.
“We can find ways around that for investment income,” Pope says, adding that lawyers must take particular care in how income is declared when a Henson Trust is in place for the benefit of the disabled person.
“It takes some co-ordinating,” he adds. “One thing to consider for deferring income is to use a tax-free savings account because when you take it out of there, it’s not treated as income for GIS purposes.