All of the baby boomers are now in the process of turning 65. Kenneth Pope discusses the concerns, questions, and what happens to your ODSP benefits when you turn 65, and what can be done prior to age 65 in regards to the OAS GIS.
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All of the baby boomers including myself are now in the process of turning 65 and that includes the boomers who have disabilities who are receiving ODSP.
So I often receive questions from typically their siblings saying what will happen when my sister turns 65 because they're concerned that they'll lose ODSP.
Well, ODSP does not simply stop when they turn 65. However, they will start to receive old age security and guaranteed income supplements, if you apply for them. And once they're in place the ODSP will be displaced, removed.
So what will happen is there will no longer be asset tests, there will no longer be gifts over 12 months that are a problem.
However, the OAS GIS, which totals approximately $17,400 and is therefore about $4,000 more than the maximum ODSP will be offset, the GIS portion, which is about $10,000, will be offset by other income.
So if the sibling happens to have some small amount of CPP, or perhaps investment income from an inheritance, these amounts would offset GIS, for every dollar offsets fifty cents, so it's like a 50% tax. And so we find ways around that by deferring income, purchasing TFSAs so that the investment income doesn't offset it.
Now you have to apply for OAS GIS and this should be done prior to age 65 and typically a person on ODSP needs assistance with this.
But overall it's a good process, medications are covered just as always and welcome to senior citizen-hood. Your tickets at the cinema will cost you less.