Adult children with disabilities living at home often don’t get the maximum disability allowance possible despite repeated requests for more than the basic $863 room and board allowance, says Ottawa special needs and disability estate planning lawyer Kenneth Pope.
Fifteen percent of people on the Ontario Disability Program (ODSP) – approximately 45,000 people – live with family and are always slotted into the lesser amount. He can now increase the amount for families whose children need full-time care as well as those who can shop and cook for themselves in simple ways, often with supports.
“We can now get an increase both when the child is able to shop and cook and also when they require full-time care.” he says. “We’ve done this hundreds of times, but now that we’ve come up with this new technique we can fix the situation for virtually all families, not just the ones where the child is more able.”
The shelter plus supplementary benefit allowance breaks down to $479 for shelter and $649 for supplementary expenses.
“So what we do is assess the situation; it’s more straightforward if the child is able to shop or cook for themselves. And we prepare an ODSP compliant lease between the parent and the child. The child then pays $500 per month for rent or shelter.
“We then submit the lease and covering letter with letterhead to the local ODSP office,” and request that the amount be changed and increased.
“When the parents attempt to do it themselves, they get stonewalled by the local office,” says Pope who has heard parents say they’ve been told there are a variety of requirements that simply aren’t true, such as that they must have a self contained dwelling unit. This is obviously untrue since many people on ODSP live in rooming houses and receive the full amount.
The issue of reporting the allowance to the Canada Revenue Agency is also raised by ODSP. But Pope says parents receiving rent from adult children on disability allowance do not have to report it as income.
“The rule is if you’re not in pursuit of profit, then it’s not income” and it therefore, doesn’t have to be declared. “Similarly, you can’t take expenses if the cost of providing shelter in your house happens to exceed the child's $500 accommodation limit.”
He points out that because the amount of rent charged is below market value, when the landlord works out his or her expenses versus income received by the rent, the result is a loss. The loss cannot be claimed by the landlord and the tenant is not eligible to apply for the property tax credit because these are considered to be cost-sharing arrangements.
“ODSP should begin their client's file by inquiring whether the child will be paying you ‘rent’ and then paying the higher amount, but of course they never do,” says Pope.
About 15 per cent of all people on the Ontario Disability Support Program are living with parents or family, and they are all slotted into room and board $863 versus shelter plus supplementary $1,128, he says. That means, he adds, about 45,000 families could have their situation improved.
Pope says he has rectified the situation successfully hundreds of times.