5.1 — Definition and treatment of income
Summary of Policy
All reasonable efforts must be made to obtain any financial resources that a member of the benefit unit may be entitled to receive.
Income is deducted from ODSP income support unless partially or fully exempt by regulation.
Income includes the monetary value of items and services provided to members of a benefit unit as well as any income that is considered to be for the benefit unit member (for example, a payment that is not made to the benefit unit member directly but made on their behalf). Income is chargeable for the months it is intended.
Summary of Directive
Income is defined and the rules for treatment of various types of income are described. Income exemptions are explained in detail.
Intent of Policy
To ensure that all income and potential income available to the member(s) of the benefit unit is considered in determining eligibility and the amount of income support payable to the benefit unit.
Application of Policy
Recipients are required to report all income received or pending, when it was or is to be received and the period for which it was or is intended. The actual monthly amounts should be used wherever possible, rather than estimates or income averaging.
Earned and variable income must be reported each month. Unearned income that has previously been reported which has not changed does not need to be reported each month as the amount reported previously will carry over until a change is reported.
Money received for a prior period is considered income in the months for which it was intended (e.g. pension payments). Money that is owing, but not yet received, is considered income when it is received (e.g. settlement for non-exempt damaged property).
Income received at periodic intervals (e.g. pensions from other countries that are paid quarterly) is averaged over the months for which it was intended and charged as income for those months.
Income Verification Requirements
Unless told otherwise, recipients are not required to verify their income (earned and unearned) each month. Income verification may occur under the following circumstances:
System Generated Verification
- All clients who report earned income, self-employment income, employment related child-care expenses or disability related work expenses will be required to provide verification twice a year.
- Clients who report new earnings or new expenses will be required to provide verification of their earnings and/or expenses for three months.
- Caseworkers have discretion in any month to determine that income or expense verification is required.
Obligation to Pursue Potential Sources of Income
Applicants/recipients must demonstrate reasonable efforts to obtain any financial resources to which they or their dependants may be entitled, within a reasonable timeframe.
Applicants must provide all necessary information and supporting documentation to show that they are making every reasonable effort to obtain available income.
Failure or refusal to make reasonable efforts to secure available income may result in income support being refused, cancelled, suspended or reduced by an amount equal to the income deemed available.
Applicants with dependent children who are eligible to receive the Ontario Child Benefit (OCB) and Canada Child Benefit (CCB) must demonstrate reasonable efforts to obtain these financial resources.
Failure to make reasonable efforts to secure OCB and CCB income may result in refusal of the Transition Child Benefit. For more information on the Transition Child Benefit please refer to ODSP Policy Directive 9.20.
Definition and Treatment of Income
Income includes, but is not restricted to, the following:
- All wages, salaries, casual earnings or any remuneration paid pursuant to employment or a training program;
- Income or revenue from an interest in or operation of a business including sale of goods or services, commissions, cash value of goods or services received in kind, sale of or interest earned on business assets and any other business income;
- All regular or periodic payments received under a pension plan, superannuation scheme or insurance benefit;
- All payments received from an annuity (other than an annuity or deferred annuity that has been purchased from a life insurance company) (See Directive 4.8 Life Insurance Policies for further information);
- All payments received under a mortgage agreement;
- All pension or other payments received pursuant to the legislation of any other country (Note: This does not apply to pensions or payments from other jurisdictions that are equivalent to the Canada Pension Plan (CPP) and Quebec Pension Plan (QPP) surviving child benefits and disabled contributor’s child benefits);
- All payments, in cash or in kind, for spousal support received pursuant to a court order, judgment or an agreement;
- For details regarding treatment of matrimonial home and mortgage payments where the applicant/recipient resides in the home please see Directive 5.15 Spousal and Child Support.
- All payments received as a retainer from a Children’s Aid Society for being available to provide emergency care;
- All payments received or available if the applicant/recipient is a sponsored immigrant or nominated relative under the Immigration Act (Canada) or the Immigration and Refugee Protection Act (Canada);
- Any payment(s) received from the sale or disposition of an asset unless otherwise exempt (see Section “Income from Sale of Assets”);
- All interest earned from the proceeds of a compensation award regardless of the amount of the award (Please note. It is considered failure to make reasonable efforts to pursue available resources if a recipient chooses to defer interest from a compensation award);
- Dividends earned from a life insurance policy that are not otherwise exempt (see Section “Dividends Earned”);
- Interest or dividend payments earned from the capital of a trust that are not otherwise exempt (see Section “Dividends Earned”);
- 60% of gross income for renting self-contained quarters, land or a garage;
- The greater of $100 or 60% of gross income received for providing lodging without meals;
- The greater of $100 or 40% of gross income received for providing lodging with meals;
- Income replacement payments received by or on behalf of a member of the benefit unit under the:
- Workplace Safety and Insurance Act and Workers’ Compensation Act that are benefits for loss of income due to an injury on the job. This does not apply to a WSIB NEL award that provides compensation for the physical, functional or psychological loss suffered from permanent impairment caused by a work-related injury or illness.
- Pension Act (Canada) - Note: This does not apply to CPP Orphan Benefit (also known as CPP Surviving Child Benefit) or the CPP Disabled Contributors Child Benefit.
- Quebec Pension Plan - Note: This does not apply the QPP Orphan Pension or the QPP Disabled Person’s Child Benefit or equivalent benefits from other jurisdictions.
- Employment Insurance Act (Canada)
- War Veterans Allowance Act (Canada)
- Civilians War Pension And Allowances Act (Canada)
- Old Age Security Act (Canada) and Guaranteed Income Supplement
- Ontario Guaranteed Annual Income Act.
- Earnings exemptions (See Directive 5.3 Deductions From Employment and Training Income);
- Earnings of dependent children;
- Earnings or payments under a training program of recipients, spouses and dependent adults attending secondary school full-time(See Directive 5.3 Deductions From Employment and Training Income);
- Training allowance and cash reimbursements of child care and transportation for individuals who reside in a prescribed First Nation community and who are participating in an employment training opportunity for up to 12 months. (See Directive 5.3 Deductions From Employment and Training Income);
- Earnings of persons attending post-secondary school (See Directive 5.18 Exemption of Earnings of Post-Secondary Students);
- The portion of a payment from the sale of an asset, used to purchase a principal residence, an asset necessary for health and welfare, an exempt asset, or an asset that does not result in the recipient exceeding the prescribed asset limit;
- Interest earned on liquid assets up to the prescribed asset limits, e.g. $40,000 for a single recipient;
- An amount up to $10,000 in a 12 month period per member of the benefit unit, in the form of gifts or voluntary payments for any purpose from any source; (this includes monies from trusts, life insurance policies, honorariums and windfalls). Casual gifts of insignificant value, e.g. basic clothing, meals, occasional food purchases are also exempt.
- Honorariums are generally payments made to individuals to recognize services provided, where payment is not required. For example, a person may volunteer or be asked to participate on a committee and may receive an honorarium. In these cases, honorariums are considered voluntary payments and may be included in the $10,000 exemption for voluntary payments.
- Honorariums paid in a way that is similar to a salary, to fulfill an obligation to compensate the recipient for services provided, are treated as employment income, and not as voluntary payments under ODSP. In these cases, the usual earnings exemptions apply.
- Payments from any source in the form of gifts or voluntary payments used for disability-related items and services or for education and training incurred because of the disability of a member of the benefit unit.
- There is no limit on the value of these contributions, provided they will not be reimbursed from other sources. For this provision to apply it is not required that the intent of the voluntary payment is for the purchase of these types of items/expenses only that is used for these purposes.
- Gifts or voluntary payments that will be applied to the purchase of a principal residence, an exempt vehicle, or that will be applied to the first and last month’s rent necessary to secure accommodation. (See Directive 5.8 Gifts and Voluntary Payments for more detailed information regarding treatment of gifts.)
- RDSP related exemptions:
- gifts or voluntary contributions made to RDSPs by family members and other third parties;
- interest earned on and re-invested in an RDSP;
- the federal Canada Disability Savings Grants and Canada Disability Savings Bonds; and
- all withdrawals from an RDSP for any purpose.
- Refundable tax credits including the:
- Canada Child Tax Benefit
- Canada Child Benefit
- Ontario Children’s Activity Tax Credit
- Ontario Trillium Benefit Payment;
- Ontario Child Benefit (OCB) payments;
- Payments from the Ontario Child Care Supplement for Working Families (OCCSWF);
- Payments from the Universal Child Care Benefit (UCCB);
- Payments from the Canada Pension Plan Orphan Benefit (also known as surviving child benefit;
- Payments from the Quebec Pension Plan Orphan Pension;
- Payments made under the Canada Pension Plan Disabled Contributors Child Benefit;
- Payments made under the Quebec Pension Plan Disabled Person’s Child Benefit;
- Payments from other jurisdictions that are equivalent to the CPP Orphan Benefit or QPP Orphan Pension or the CPP Disabled Contributors Child benefit or QPP Disabled Person’s Child Benefit.
- Payments made under the Soldiers’ Aid Commission Act, 2020;
- Child support (Effective January 1, 2017). Please see Directive 5.15 Spousal and Child Support for more detailed information;
- Payments received under subsection 147(14) of the Worker's Compensation Act, known as B165 payments;
- Payments received for property damage and temporary living expenses through the Ontario Disaster Relief Assistance Program (ODRAP) other than payments for loss of income;
- Payments (cash and in-kind) received by evacuees of the Kashechewan First Nation between October 2005 and September 2006, from a municipality or a Tribal Council made on behalf of the federal Department of Indian Affairs and Northern Development (Canada);
- Insurance payments made for temporary living expenses and to replace or repair lost/damaged exempt assets or assets within allowable asset limits but not payments for loss of income;
- Mortgage payments paid by disability insurance purchased by an applicant/recipient on a mortgage for his/her principal residence;
- A forgivable loan under the First Nation, Intuit, Métis Urban and Rural (FIMUR) Housing home Ownership Assistance Program.
- A forgivable loan or a grant under the Residential Rehabilitation Assistance Program (RRAP) that provides assistance to on-reserve low-income homeowners to bring their homes up to safety and health standards, or improve energy efficiency.
- A forgivable loan or grant under Ontario Renovates that provides assistance to low-income homeowners to bring their homes up to safety and health standards, improve energy, efficiency and/or increase accessibility of the home through modifications and adaptations; and, create a new affordable rental unit within an existing single family home;
- Payments made under the Investment in Affordable Housing (IAH) - operating components that exceed the maximum shelter allowance up to the actual shelter costs;
- Payments made under the provincial Community Homelessness Prevention Initiative (CHPI) and Government of Canada’s Reaching Home program that are for the following special purposes are exempt as income:
- rent deposits;
- establishing a new principal residence;
- maintaining the health and welfare of a member of the benefit unit in her or her current residence;
- arrears relating to shelter costs; or other housing and homelessness-related services, items or costs approved by the Director of Ontario Works.
- Payments made under CHPI for personal needs made to domiciliary hostel residents up to the amount equivalent to the ODSP amount issued for personal needs to recipients residing in a long-term care home;
- Monthly housing allowances or rent supplements made under the Government of Canada’s Reaching Home program (formerly known as the Homelessness Partnering Strategy) are exempt as income up to the amount that actual rent exceeds the maximum shelter allowance;
- All payments made under the Canada-Ontario Housing Benefit (COHB) program (e.g., housing allowances, payments for first/last month’s rent). (See Directive 6.2 Shelter Calculation);
- Financial grants, items or services that are issued for energy-conservation in homes through Conservation and Demand Management Programs offered by local Electricity Distribution Companies;
- Financial grants, items or services that are issued for energy-conservation in homes through Demand Side Management programs offered by local Natural Gas Distributors;
- Benefits in the form of a cheque or voucher received through the Water Filter Fun. program;
- All direct financial assistance received from the Ministry of Tourism, Culture and Sport’s Quest for Gold - Ontario Athlete Assistance Program;
- Funds received from the Ministry of College and Universities or Canada Student Financial Assistance for education costs such as books, tuition, instructional supplies, transportation costs, child care and compulsory fees;
- Funds received from the Ministry College and Universities under the Second Career program for education costs.
- All funds received from the Ministry of Colleges and Universities under the Micro-credentials program;
- A bursary received by a full-time student enrolled in a secondary school under 8(1)18 of the Education Act;
- The Dr. Albert Rose Bursary to assist public housing tenants attending post-secondary school;
- Payments from an RESP, intended and used for education costs, received by a recipient or any other member of a benefit unit as well as gifts and voluntary payments into an RESP in addition to the $10,000 gift and voluntary payment exemption. See Directive 5.11 Post-Secondary Education;
- Proceeds from a court judgement or legal settlement or an award from a statutory tribunal (such as compensation resulting from being a victim of an automobile accident, sexual assault or violent crime) received as damages or compensation for pain and suffering, due to injury to or the death of a member of the benefit unit. See Directive 4.6 Compensation Awards;
- Compensation received as settlement for a claim of abuse sustained at an Indian Residential School, other than compensation for loss of income;
- Pre-judgement interest awarded as compensation for the delay in receiving damages for pain and suffering as a result of injury to or death of a member of the benefit unit, See Directive 4.6 Compensation Awards;
- Independent Living Allowance payments from the Workplace Safety and Insurance Board received annually by severely impaired workers;
- A full income exemption applies to the total amount of a compensation award for the following:
- awards for pain and suffering as a result of an injury to or the death of a member of the benefit unit;
- expenses actually or reasonably incurred or to be incurred as a result of injury to or death of a member of the benefit unit;
- loss of care, guidance and companionship due to an injury to or the death of a family member under the Family Law Act;
- non-economic loss under section 46 of the Workplace Safety and Insurance Act, 1997 or section 42 of the Workers’ Compensation Act.
- Interest earned on the capital of an inheritance retained in trust up to the allowable limit of $100,000. See Directive 4.7 Funds Held in Trust;
- All payments from the trust, including interest earned, used for the purchase of approved disability-related items and services (e.g. assistive devices) or education and training expenses incurred because of the benefit unit member's disability are exempt as income without limit. See Directive 5.9 Treatment of Disability-Related Items and Services;
- Payments from the capital of a trust (including interest earned and retained therein) for non-disability-related purposes are exempt as income to a combined maximum of $10,000 in a twelve month period per member of the benefit unit (the combined maximum includes payments from a trust, gifts or voluntary payments, life insurance policies, honorariums and windfalls). In addition to the $10,000 exemption, payments from the capital of a trust that will be applied to the purchase of a principal residence, an exempt vehicle, or that will be applied to the first and last month’s rent necessary to secure accommodation are also exempt as income. (See Directive 5.8 Gifts and Voluntary Payments for more detailed information regarding treatment of gifts.)
- This exemption applies provided the applicant/recipient files an annual report, which is satisfactory to the Director, documenting all income and expense transactions relating to the inherited assets held in trust;
- Life insurance policies, annuities, deferred annuities and segregated funds purchased through a life insurance company, with a cash surrender value of up to $100,000 per member of the benefit unit, provided that the cash surrender value remains within the policy. (Note: under the Insurance Act, annuities, deferred annuities, and segregated funds purchased through a life insurance company are considered to be life insurance);
Note: Interest and dividends from an exempt life insurance policy and loans against the face value of an exempt life insurance policy may be exempt as follows:
- income generated from the policy is exempt provided that it is reinvested in the policy and that the total cash surrender value does not exceed $100,000;
- payments from or loans against the face value of the policy are exempt, provided the funds are used for approved disability-related items and services, or education and training expenses incurred because of the person’s disability, applied to the purchase of a principal residence, an exempt vehicle or applied to the first and last month’s rent necessary to secure accommodation.
- partial redemption of the cash surrender value may be exempt if there is room to use the maximum exemption of $10,000 per twelve-month period per member of the benefit unit;
Note. Income from the policy, annuity or segregated fund that is not reinvested in the policy, not used for approved disability-related items and services or applied to the purchase of a principal residence, an exempt vehicle, first and last month’s rent necessary to secure accommodation, or not claimed under the annual $10,000 exemption, is chargeable as income. (See Directive 5.8 Gifts and Voluntary Payments for more detailed information regarding treatment of gifts.)
- All donations received from a religious, charitable or benevolent organization for any purpose;
- All payments received for activities related to participating in a jury. This includes the per diem payment or payments for transportation.
- 40% of gross rental income, and 60% of gross board and lodging income;
- Loans including a reverse mortgage used for an approved purpose. Approved purposes include:
- the purchase of approved disability-related items or services;
- expenses for health-related reasons as supported by a medical doctor, and approved by the Director;
- business loans;
- Ontario Student Assistance Program payments for tuition, books, transportation costs, instructional supplies and other compulsory fees related to a post-secondary institution;
- approved personal loans for training or education costs as long as the person is attending the program or training for which the loan was taken or intended and that the funds are applied to education or training within a reasonable period of time. See Directive 5.11 Post-Secondary Education;
- loans to recipients for assets that are exempt, (e.g. motor vehicles, principle residences);
- loans for the payment of first and last month’s rent;
- loans for the purchase of normal household items;
- First Nations settlements not made under the Indian Act or a Treaty;
- Payments from ODSP employment supports and Ontario Works employment assistance;
- Certain payments under the Indian Act (Canada) under a treaty between Her Majesty and a Band, other than funds for post-secondary education.
- Payments pursuant to an Aboriginal land claim settlement agreement between Ontario and/or Canada. (Please see Directive 4.1 regarding asset treatment related to these payments.)
- Canada or Quebec Pension Plan Death Benefits;
- Payments received under the Supports to Promote the Social Inclusion of Persons with Developmental Disabilities Act;
- Payments received under the Ministry of Community and Social Services Act;
- An adoption subsidy received from a Children's Aid Society under the Child and Family Services Act. Every adoption subsidy is accompanied by an agreement that stipulates the items that the subsidy is intended to cover. Items covered under an adoption subsidy should not be claimed as an expense under the Assistance for Children with Severe Disabilities (ACSD) program;
- From February 1, 2007, payments received from a Children’s Aid Society for Permanency Planning, which includes Admission Prevention, Kinship Service and help with the costs of children in Legal Custody (Section 65.2 of the Child and Family Services Act);
- A grant received under the Employment Insurance Act (Canada) and used for the purpose of purchasing a training course approved by the Director. Payments under the federal Employment Measures and Benefit - Human Resources Investment Fund (HRIF) through Employment Insurance were formerly known as the Transitional Skills Grant;
- Learning Earning and Parenting Program (LEAP) incentive payments ($500). (The payment will also be exempt as an asset if used by the young parent for post-secondary education or if it is invested in a Registered Education Savings Plan (RESP) for the young parent’s dependent child);
- Interest earned on the LEAP incentive payments within an RESP. LEAP incentive payments placed in an RESP for the young parent’s dependent child consist of an Ontario payment as well as a federal payment made as a Canada Education Savings Grant;
- Payments received under the Mercury Disability Fund of the English and Wabigoon River Systems Mercury Contamination Settlement Agreement Act, 1986;
- Other miscellaneous payments exempt under the ODSP Regulations.
To avoid duplication of social assistance and other government allowances, all government benefits will be considered received in the month to which they apply, and deducted from income support for that month.
This practice ensures parity between recipients who assign arrears and those who do not.
Canada Pension Plan
In order to qualify for Canada Pension Plan disability benefits a person must have made contributions to the plan in four of the last six years. Effective March 3, 2008 a person who made contributions to the plan for 25 or more years now meets the contributory requirement if they made contributions in three of the last six years. They must have earned at least 10% of each year's maximum pensionable earnings.
To determine whether a person qualifies for CPP-D, the caseworker will need to review a copy of the applicant/recipient’s most recent Canada Pension Plan Statement of Contributions.
Applicants and recipients are not required to apply for early retirement pension from CPP. However, ODSP applicants who choose to apply for and receive early retirement pensions will have these funds deducted from their income support.
Workplace Safety and Insurance Board (WSIB)
The Workplace Safety and Insurance Board, upon the request of the applicant/ recipient, will consider total or partial commutation. A commutation of pension is the conversion of all or part of the Workers' Compensation permanent disability pension into a lump sum award.
Normally, persons in receipt of ODSP are not granted commutations, as it is not to their long-term advantage. However, in those few cases where a commutation does not jeopardize the person's ability to meet continuing financial obligations, the lump sum payment should be treated as income in the month received and as an asset in the months thereafter.
Payments of benefits under the Workers Compensation Act and under the Workplace Safety and Insurance Act for loss of income due to an injury on the job are not exempt as income. This does not apply to a WSIB Non-Economic Loss (NEL) award that provides compensation for the physical, functional or psychological loss suffered from permanent impairment caused by a work-related injury or illness. WSIB NEL awards are income exempt government pensions with refundable deductions.
A pre 1990 permanent partial disability pension is not the same as a NEL award and is not exempt as income under ODSP. Prior to 1990 a permanent disability payment was not specifically for non-economic loss as it also included wage loss.
Government allowances and pensions can have a tax deduction and/or overpayment recovery taken at source. In most cases, if the recipient's income is low enough, the tax is reimbursed through income tax.
If an overpayment is being recovered, the money has already been received. It is the recipient's responsibility to pay tax and their overpayments. Government pensions are charged as income in the gross amount of the payment.
When earnings are deducted from Employment Insurance (EI), the EI amount that is deducted from ODSP is the gross EI amount less the earnings deduction (income tax, overpayment or any other deduction is included in the gross EI amount). The recipient would still be required to report earnings. The earnings would be treated in the normal manner and the appropriate earnings exemptions would apply.
Legal Costs Incurred to Obtain a Financial Benefit
Where a lawyer is retained to assist with obtaining a financial benefit for which the recipient is eligible (e.g. CPP-D benefits or WSIB benefits) and, as a result, the recipient receives a lump sum award, ODSP will allow the legal fees to be paid from the gross award and will consider the net award as income.
In cases where the Ministry expects to recover income support paid to a recipient, recovery can only be made from funds that are considered ‘income’ (in other words, from the net award).
If the net award is sufficient to cover the income support paid, the Ministry expects full payment.
If the net award is not sufficient to cover the income support paid to the recipient, the Ministry accepts the entire net award in satisfaction of its claim. Given this, no overpayment is established.
If the Ministry receives the entire gross amount of the award by way of assignment and the recipient has incurred legal costs to obtain the award, the ODSP local office returns an amount equivalent to the legal costs to the recipient.
Government Pensions with Non-Refundable Deductions
Pensions from other countries should be calculated in Canadian dollars and charged as income. Banking institutions can provide the Canadian dollar value of the pension amount.
Government pensions from other countries paid to recipients are not always paid in an amount equal to the gross amount of the pension. If these deductions are not refundable to the recipient at any time and the higher pension is not available to persons in Canada, they should be considered exceptional cases and the reduced pension amount charged.
Old Age Security (OAS)
ODSP applicants/recipients are required to pursue OAS when they turn 65. Income from OAS is deducted dollar for dollar from income support.
Treatment of Other Types of Income
Funds Received from an Inheritance and Placed in Trust
Funds up to $100,000, received from an inheritance or life insurance policy upon the policy owner’s death, placed in trust as a provision of a will are exempt as income in the month received.
A cash inheritance or life insurance policy received by a recipient, that is subsequently placed in trust, is treated as income in the month received unless otherwise exempt (Please see Directive 5.8 Gifts and Voluntary Payments for more detailed information the treatment of an inheritance as a gift) and as an exempt asset thereafter, provided that the trust is established within six months of receipt of the money.
If a recipient reports the receipt of such monies several months after the fact and has spent part of the money, the funds will be treated as income in the month received unless otherwise exempt (See Directive 5.8 Gifts and Voluntary Payments), and if the remaining funds are placed into a trust they will be exempt as assets. The amount of money spent and the items purchased would have to be reviewed. If the purchases were for approved disability related items or for the purchase of a principal residence, an exempt vehicle, applied to the first and last month’s rent necessary to secure accommodation or placed into a Registered Disability Savings Plan or Registered Education Savings Plan the amount spent may be exempt. An amount up to $10,000 can also be exempt during a 12-month period. However, if the amount spent does not fall under an exemption, a retroactive income charge would be applied for the month the money was received..
Indigenous Culture Fund
The ICF supports cultural priorities and activities of Indigenous people and communities, including on and off-reserve, urban, rural and remote. This fund is administered through the Ontario Arts Council on behalf of the Ministry of Tourism Culture and Sport.
These grants are exempt as income and assets. (Also See Directive 4.1 Definition and Treatment of Assets.)
Arts grants awarded to any member of the benefit unit are to be exempt as income and assets if the grant is for purposes such as, but not limited to:
- creation, production, and/or presentation of works
- professional development activities
- residency or travel
- creative research
- networking and building market opportunities
- other activities necessary for the development or creation of art
- accessibility expenses during the duration of their project
In a small number of cases art grants may provide some funding to assist artists with living costs. The portion of the grant that provides living costs (for example funds intended to help with shelter costs) is to be considered income. Any funds considered income would be pro-rated over the period of time for which the grant was intended to cover and deducted from ODSP.
The main funders of arts grants available to artists in Ontario are:
- The Canada Council for the Arts
- The Ontario Arts Council
- The Toronto Arts Council
- The London Arts Council
- The City of Windsor
Please note: The above list is not exhaustive and this exemption applies to all arts grants. (For additional information related to arts grants see Directive 4.1 Definition of Assets.)
Roomer and Boarder Income
Roomer income is charged at 60% of the amount paid or $100, whichever is greater.
Boarder income is charged at 40% of the amount paid or $100, whichever is greater.
If a roomer/boarder is not paying, the reasons should be documented and a minimum charge of $100 shall be applied.
There is no income charge if an ODSP applicant, recipient, or spouse provides board and lodging or rents to a child or grandchild who is receiving ODSP or Ontario Works in his/her own right.
Income from Sale of Assets
Money received from the sale of an asset is income in the month received if not otherwise exempt.
There is no income charge to recipients for that portion of a payment received from the sale or other disposition of any asset (non-exempt or exempt), that is applied or with approval, will be used to purchase: a principal residence; any other approved asset that is necessary for health or welfare; or an exempt asset. There will be no income charge to a recipient who converts/transfers (i.e. moves) any assets that do not exceed the prescribed asset limit for the benefit unit.
In general, a conversion of non-exempt or exempt assets should be within a six month time frame. After six months, the proceeds from the sale of an asset, if not converted to an exempt asset or an asset below the prescribed asset limit (taking all non-exempt assets into account), is considered income in the month received and an asset thereafter. Only the amount that exceeds the prescribed asset limit, when combined with all other non-exempt assets is considered as income or an asset. This may result in cancellations and overpayments, so recipients should be informed of this policy.
Applicants may also convert assets (exempt and non-exempt) to purchase a principal residence; any other approved asset that is necessary for health and welfare; or an exempt asset. However, applicants need to have made the conversion of assets prior to applying for income support.
A mortgage receivable is a mortgage held by an ODSP applicant/recipient or member of the benefit unit to whom another party is making payments. A mortgage receivable is exempt as an asset.
If the value of the mortgage, together with the other assets of the benefit unit, exceeds the allowable asset amount of the benefit unit (e.g. $40,000 for a single person), payments received under the mortgage shall be treated as income.
However, when the value of the mortgage together with the other assets of the benefit unit is within the prescribed allowable asset limit of the benefit unit, the payments made under the mortgage agreement are not treated as income.
Dividends can be earned at various time intervals, e.g. quarterly or annually. The recipient must be advised to report dividends when earned.
Dividends re-invested in a life insurance policy are exempt as income, provided the cash surrender value of the policy does not exceed $100,000. Dividends reinvested once the $100,000 limit is reached are charged as income.
Similarly, dividends or interest earned from the capital of an inheritance trust are exempt as income, provided the dividends or interest are re-invested in the capital of the trust and the capital does not exceed $100,000.
Dividends paid, that are used for approved disability related items or services or disability related education or training that will not be otherwise reimbursed, are also exempt from income. In addition, a $10,000 income exemption for any purpose in any twelve month period also applies to dividends from insurance and interest from a trust.
Dividends generated from a life insurance policy or from the capital of an inheritance trust that are not reinvested, not used to purchase approved disability-related items and services or not claimed under the $10,000 exemption for any purpose will be treated as income in the month received.
Ontario Disaster Relief Assistance Program (ODRAP) and Insurance Payments
Payments made under ODRAP, other than payments for loss of income, are exempt as income as long as those payments are used for the purpose intended by ODRAP.
Insurance payments made for temporary living expenses in situations where the recipient has moved out of his/her dwelling place because of damage (e.g., fire or flood) are exempt. Insurance payments made to replace or repair damaged or destroyed assets that are either exempt assets (e.g., principal residence) or within allowable asset limits are also exempt. However, insurance payments for loss of income are not exempt.
CAS Payments Under the MCYS Permanency Planning Initiative
As of February 1, 2007 financial support payments made by Children’s Aid Societies under the Ministry of Children and Youth Services “Permanency Funding Policy Guidelines for Children’s Aid Societies” for the intervention categories of Admission Prevention, Kinship Service (out of care) and Legal Custody [Section 65.2(1) (b) of the Child and Family Services Act (CFSA)] are not charged as income under ODSP.
Under Admission Prevention, a CAS may make episodic/emergency payments to parents when such assistance may prevent their children from coming into care of the CAS; under Kinship Service (out of care) a CAS may make episodic/emergency payments to extended family or community members caring for a child to prevent the child from coming into care of the CAS; under Legal Custody, a CAS may make episodic/emergency and/or ongoing financial payments to a custodian to assist the custodian in caring for the child.
Opportunities Fund for Persons with Disabilities
Payments received under the federal Opportunities Fund for Persons with Disabilities are exempt from being charged as income or assets if the payments are applied to costs incurred or to be incurred as a result of participation in approved employment-related activities and are not intended to cover daily living expenses. In general, funding that is issued under the Employment Insurance Act that will be applied to the start of a small business is exempt.
Extraordinary Assistance Plan (EAP)
Multi-Provincial/Territorial Assistance Program Agreements (MPTAP)
Both the federal Extraordinary Assistance Plan and the Multi-Provincial/Territorial Assistance Program Agreements provide compensation awards to people who were infected with HIV as a result of receiving blood or blood products.
Federal EAP payments are $30,000 per year for four years. Principal payments, made under the federal Extraordinary Assistance Plan, are exempt as income.
Individuals must qualify for the federal payments under the Extraordinary Assistance Plan in order to be eligible for the MPTAP payments.
Principal payments received under the MPTAP Agreement are also exempt from being treated as income.
The main components of the MPTAP package are:
- $30,000 per year for life to people directly infected (to commence after EAP annual payments end);
- A one-time $22,000 lump sum payment to people directly infected or their surviving spouses when the package is accepted;
- $20,000 per year for five years to surviving spouses; and
- $4,000 per year for five years to surviving dependent children.
Any interest, dividends or investment income, earned on these payments, are treated as income.
The MPTAP is designed to “piggyback” on the federal program. For example, eligible individuals, who received their last instalment under the federal program in April 1993, received their first payment under the provincial/territorial program in April 1994.
Individuals may still apply for the Extraordinary Assistance Plan notwithstanding the expiry date of March 31, 1994, where the Minister is satisfied that the applicant was unable to submit the application before that date for reasons beyond the control of the applicant.
Compensation payments from other sources to persons infected with HIV are exempt.
The Walkerton Compensation Plan
Under the Walkerton Compensation Plan, all Walkerton residents, as well as non-residents, who became ill or died as a result of drinking the water or being exposed to someone else who was ill from it, are eligible for a minimum payment of $2,000 per person.
The $2,000 initial payment is exempt as income.
Further payments above the $2,000 minimum may be made where the individual is able to prove that their losses are compensable under the Plan and exceed $2,000. Payments may be made for pain and suffering, loss of past and future income, health care costs not covered by OHIP, out-of-pocket expenses and other monetary losses.
Family members of an individual who became ill or died as a result of drinking Walkerton water or being exposed to someone else who was ill from it may also apply for compensation for losses.
Family members may include a spouse, child, grandchild, grandparent and sibling.
All payments, received under the Walkerton Compensation Plan, except for payments for future loss of income, are exempt as income.
The Helpline Reconciliation Model Agreement
The Grandview Agreement
Both the Helpline Agreement and the Grandview Agreement provide financial compensation for victims of abuse in provincial institutions.
All payments received under the Helpline Agreement or the Grandview Agreement are exempt from being charged as income.
Any interest, dividends or investment income, earned on these payments, are treated as income and, if retained, as an asset in the following month.
Under the “Helpline Agreement”, validated claimants are eligible to receive:
- A lump sum government payment up to $25,000;
- An additional $1.60 from the Christian Brothers of Ottawa for every dollar paid by the government;
- A $3,000 contribution to an “Opportunity Fund” for each validated claimant;
- Free counselling services in Ontario; and,
- Payment of legal fees.
Some claimants are also eligible to receive a token sum for wages that were earned while they were at school, but were never paid.
Under the “Grandview Agreement”, validated claimants are eligible to receive:
- Financial support;
- Counselling services;
- Removal by laser therapy of self-inflicted tattoos;
- Educational and vocational opportunities; and,
- A contingency fund to cover expenses incurred in accessing benefits (e.g. transportation, childcare).
(Province of) Alberta Sterilization Payments
All payments received from the Government of Alberta, as compensation for sterilization, are exempt as income.
Ontario Hepatitis C Assistance Plan
Payments received under the Ontario Hepatitis C Assistance Plan, by individuals who contracted Hepatitis C through the blood system in Ontario prior to January 1, 1986 and after June 30, 1990, are exempt as income.
This exemption is retroactive to December 1, 1998.
1986-1990 Hepatitis C Settlement Agreement
Lump sum payments received under the 1986 - 1990 Hepatitis C Settlement Agreement other than a loss of income payment or a loss of support payment, are exempt from income.
Federal Pre-1986/Post-1990 Hepatitis C Settlement Agreement
Payments received under the federal Pre-1986/Post-1990 Hepatitis C Settlement Agreement, other than a payment for loss of income or loss of services or payments to dependants of the person infected with Hepatitis C are exempt from income.
Huronia Regional Centre Settlement Fund
All payments under the Huronia Regional Centre class action Settlement Agreement are exempt as income. See Directive 4.1 for asset exemption.
Rideau Regional Centre Settlement Fund
All payments under the Rideau Regional Centre class action Settlement Agreement are exempt as income. See Directive 4.1 for asset exemption.
Southwestern Regional Centre Settlement Fund
All payments under the Southwestern Regional Centre class action settlement fund are exempt as income. See Directive 4.1 for asset exemption.
Clegg Settlement Agreement
Payments received by a class member under the Settlement Agreement in the class action Clegg v. Her majesty the Queen in the Right of the Province of Ontario that was approved by the Superior Court of Justice on April 25, 2016.
Sixties Scoop Settlement Agreement
All payments received by a class member under the Sixties Scoop Settlement Agreement are exempt as income. See Directive 4.1 for asset exemption.
Compensation amounts are expected to vary between $21,430 and $50,000, with the exact payment to each person dependent on the number of claimants.
Federal Indian Day Schools Settlement Agreement
All payments received by a class member under the Federal Indian Day Schools Settlement Agreement are exempt as income. See Directive 4.1 for asset exemption.
Each class member will receive a payment of $10,000. Many will also receive an amount between $50,000 and $200,000, in relation to specific abuse, with the exact payment to each person based on the severity of harm suffered.
Nova Scotia Home for Colored Children Settlement (NSHCC)
Payments under the NSHCC settlement are exempt as income. See Directive 4.1 for asset exemption.
Thalidomide Survivors Contribution Program
Payments made under the Government of Canada’s Thalidomide Survivors Contribution Program.
Proceeds of Fire Insurance and Car Insurance
Proceeds realized from a fire insurance policy are not considered income, providing the funds are used specifically for the replacement of the insured items.
Replacement of lost items should take place within six months from the date the insurance proceeds are received.
Proceeds realized from a car insurance policy are not considered as income or assets provided the funds are used for specified repairs or vehicle replacement.
Treatment of Foster Care Payments from a Children’s Aid Society (CAS)
CAS payments made to a recipient for providing care to a foster child are exempt as income. The foster child should not be included as a member of the benefit unit and the income should not be charged.
Treatment of Payments Under the Transplant Patient Expense Reimbursement (TPER) Program
The Ministry of Health’s TPER program provides up-front payments or reimbursement of temporary accommodation costs incurred by eligible patients while awaiting heart, heart-lung and lung transplants, up to a maximum of $650 per month.
TPER payments are exempt as income for the purposes of social assistance if used for the intended purpose within a reasonable period of time as determined by the Director.
MOH funded Rent Supplement for Permanent Supportive Rental Housing
The Ministry of Health (MOH) funded rent supplement aims to provide permanent supportive rental housing to persons with a mental illness who are homeless or at risk of becoming homeless. The program is also available to other client groups as determined by MOH such as people with mental illness who come in contact with the criminal justice system or those with a physical disability.
Where an applicant/recipient is in receipt of the MOH funded rent supplement payment, the portion of the payment that exceeds the maximum social assistance shelter allowance is exempt as income up to the actual shelter costs.
Exempt Credits on Electricity Bills
The value of all grants, payments, credits, services or items provided by Ontario utilities and regulators, municipalities, and the Governments of Ontario or Canada, for the purposes of energy efficiency, conservation or affordability, are exempt as income for social assistance purposes.
For the purposes of calculating the shelter allowance, utility costs include the total amount of the recipient’s electricity bill, prior to the application of exempted credits. The shelter allowance is not to be reduced. See 9.5 Utilities for how to calculate utility costs.
ODSP Regulations exempt gifts or other voluntary payments up to a maximum of $10,000 in any twelve-month period. However a cash bonus from an employer given in consideration for services rendered or work performed, does not qualify for this exemption. A cash bonus from an employer may be treated in one of two ways. It is either income in the month received and an asset thereafter, or it may be averaged over the course of the previous year if this is to the client’s advantage (i.e. recipient has not used his/her full earnings exemption deductions).
If the client has not worked a full year, the bonus would be averaged over the number of months the client worked. If the value of the cash bonus is less than $100, it may be treated as a gift. This is in keeping with Canada Customs and Revenue Agency guidelines which generally treat bonuses as income but will exempt amounts up to $100 in certain circumstances (i.e. when the employer does not claim the amount as an expense).
Severance pay is based on years of service and other factors such as lack of termination notice. It is not paid with respect to specific months or a specific time frame. Severance pay is treated as income in the month it is received and earnings exemptions do not apply.
Debts Owing to Applicant/Recipient
If the financial resource is a debt owing to the recipient, full details must be recorded including to whom the money was loaned, when, why it is not currently being repaid, when it will be repaid, and what efforts the recipient has made to obtain repayment.
If a debt was owing when a person applied for ODSP (prior to ODSP) and this information was recorded at the time of application, the repayment of this debt would be exempt as income.
Re-Financing of Mortgages
Re-financing a mortgage can involve either changing the terms of the mortgage (e.g. extending the amortization period) or taking out another mortgage on a property (e.g. a second mortgage).
Since changing the terms of a mortgage does not generally result in a person receiving additional funds, there is no impact on a person's income.
Monies received from taking out a second mortgage on a principal residence are exempt as income when used for the following purposes:
- the purchase of an approved asset necessary for the health or well-being of a member of the benefit unit, including the purchase of disability-related items or services;
- the purchase of an exempt asset (as set out in section 28 of the ODSP Regulation);
- the purchase of an asset that does not result in the benefit unit exceeding its asset limit (e.g. $50,000 for a couple).
Income from a foreign country is chargeable. Income received includes ongoing payments and any lump sum arrears payments from foreign pensions covering a period when income support was in pay. Verification for all declared income must be documented. Where a recipient has filed an income tax return, it must be reviewed, including any foreign tax returns filed with a foreign country.
Foreign pensions should be reviewed to determine whether payments are received quarterly, semi-annually, etc. Exchange rate information at the time of payment should be recorded.
Canada currently has social security agreements with the following countries:
- Czech Republic
- Korea (South)
- New Zealand
- St. Kitts
- St. Lucia
- St. Vincent
- United Kingdom
- United States
Income from Locked-In Pension Funds
Under the Pension Benefits Act (PBA), in specific circumstances individuals are allowed limited access to three different types of locked-in retirement arrangements (locked-in retirement accounts (LIRAs), life income funds (LIFs) and locked-in retirement income funds (LRIFs).
Section 66(6) of the PBA specifically provides that a person’s entitlement to access funds from the specified locked-in retirement accounts shall NOT be relevant when determining the income (or assets) available to that person under any other Act.
As a result, the ODSP requirement that applicants and recipients pursue all available resources as a condition of eligibility is NOT applicable to locked-in retirement accounts.
However, if an ODSP recipient does access these funds, ODSP rules regarding income and assets must be applied.
When an individual terminates employment, he or she may transfer the pension benefit they earned under their pension plan into one of the locked-in retirement arrangements (LIRA, LIF, LRIF). The individual may transfer the money into a LIRA as long as he or she will not reach age 71 by the end of the year in which the money is transferred. If the individual is 54, he or she may transfer the money from their pension plan into a LIF or LRIF. If an individual already has money in a LIRA he or she may also transfer it into a LIF or LRIF in the year when they turn 54. (Note: in some situations, individuals may transfer money to their LIF or LRIF earlier than age 54, but it is not as common as at age 54. If the transfer does happen earlier than age 54 the same rules apply as when the transfer happens at age 54.)
At the time the money is transferred into a LIF the individual may access up to 50% of the money that was transferred. He or she may either receive this money in cash or transfer it to an unlocked vehicle (an RRSP or RRIF). As well a minimum amount must be withdrawn from the LIF or LRIF each year and there is a maximum limit on how much can be withdrawn annually. The withdrawal limits are set out in the Pension Benefits Act.
ODSP rules regarding income and assets must be applied to any money that is withdrawn from a locked-in account. However, the assets that remain in a locked-in account (the capital) remain locked-in and do not count toward the recipient’s asset limit. If the assets have been withdrawn and transferred to an unlocked vehicle (an RRSP or RRIF) the assets are not exempt and will count toward the recipient’s asset level.
Below are some situations in which an individual may apply to unlock and withdraw money from their locked in accounts:
If a person faces financial hardship under the specified categories below, under the PBA he or she may apply for access to some of his locked-in money.
- Facing eviction from a principal residence as a result of arrears of rent
- Facing eviction from a principal residence as a result of debt secured on a principal residence
- Needing to cover reasonable non-reimbursed medical expenses for the treatment of illness or medical disability
- Needing to cover reasonable expenses for renovations or alterations of a principal residence made necessary by illness or physical disability
- Requiring first and last month’s rent to obtain a principal residence
Pension funds accessed and used for the purposes noted above are exempt as both income and assets under ODSP.
Some other situations in which the PBS allows access to locked-in funds include:
Financial Hardship (in addition to the categories listed above):
- Low-income. This situation is where an individual’s personal income from all sources, before taxes, for the next 12 months is less than a specified amount ($31,466.67 in 2010). The individual may apply for access to some of the locked-in money.
Shortened Life Expectancy:
- The individual has an illness or physical disability that will shorten his or her life expectancy to less than two years. All or some of the money in the account may be withdrawn.
Small amounts for age 55 or over:
- The individual is at least 55 and the total amount in his or her Ontario locked-in accounts is less than a prescribed percentage that adjusts each year (in 2010 this is $18,880). All of the money in the account must be withdrawn.
Excess amounts under the federal Income Tax Act (ITA).
- In rare instances when an individual terminated employment, money was transferred to his or her locked-in account, which exceeded the maximum limit that may be transferred under the ITA. All of the excess amount may be withdrawn.
In these cases, the income will be exempt as income and assets if used to purchase exempt assets or an approved asset necessary for the health and welfare of a member of the benefit unit. The pension funds may also be used for approved education or training expenses.
2.1 Dependent Adults
2.2 Dependent Children
4.1 Definition and Treatment of Assets
4.6 Compensation Awards
4.7 Funds Held in Trust
4.8 Life Insurance Policies
4.10 Registered Disability Savings Plans
5.2 Assignment of Retroactive Income
5.3 Deductions from Employment and Training Income
5.4 Treatment of Self-Employment Income
5.5 Child Care Deductions
5.7 Farm Income
5.8 Gifts and Voluntary Payments
5.9 Disability-Related Items and Services
5.11 Post-Secondary Education
5.14 Treatment of Canada Child Tax Benefit (CCTB)
5.15 Spousal and Child Support
5.18 Exemption of Earnings of Post-Secondary Students