5.8 — Gifts and voluntary payments
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Summary of policy
Exemptions are available for certain types of voluntary payments and gifts up to stated maximum amounts.
Section 43 (1) 7, 9, and 13 of the ODSP Regulation
Summary of directive
- gifts or voluntary payments used for disability related items and services are exempt from income
- gifts or voluntary payments for any other purpose are exempt up to a maximum of $10,000 for any 12 month period per member of the benefit unit
Intent of policy
To fully exempt gifts or voluntary payments provided to members of the benefit unit used for:
- disability related items and services
- contribution to a Registered Education Savings Plan (RESP) or a Registered Disability Savings Plan (RDSP)
- 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
To exempt gifts or voluntary payments provided to members of the benefit unit for any purpose up to $10,000 for any 12 month period per member of the benefit unit.
Application of policy
Gifts and Voluntary Payments for Disability Related Items and Services
All gifts and voluntary payments in any amount from any source used for approved disability related items and services are exempt as income and should not be deducted from income support. Approved disability related gifts or payments are exempt without a maximum but only for members of the benefit unit who are disabled. Examples of disability related items and services are assistive devices, health items, support services, renovations or alterations to the home for accessibility and/or health and safety, and education and training expenses incurred because of the benefit unit member's disability. Note: ODSP recipients may move into a retirement home (or similar residence) that provides disability related items or services they require. In some situations family members may provide funds to supplement the cost of these homes. These payments may be considered exempt as a gift/voluntary payment for a disability related item or service. (See Directive 5.9 — Disability related items and services for additional details)
ODSP staff must verify that gifts and voluntary payments for disability related items and services are used for that purpose.
Gifts and voluntary payments for any purpose up to $10,000 per member
Gifts and voluntary payments may be given to any member of the ODSP benefit unit for any purpose. These will be exempt from income up to a maximum of $10,000 for any 12 month period per member of the benefit unit.
The $10,000 exemption may not be used to reduce earned income by the recipient or a member of the benefit unit.
The $10,000 limit is the maximum total allowable from all sources including gifts and voluntary payments. For example, if a recipient receives $10,000 from a trust and another $10,000 as a gift from family and friends, only $10,000 will be exempt.
Other gifts and voluntary payments
In addition to the $10,000 exemption described above, the following gifts or voluntary payments are also exempt as income:
- gifts or voluntary payments received for the purpose of making a contribution to a RESP or a RDSP are exempt as income
- 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
In order to allow sufficient time to use these funds the above gifts/voluntary payments are also exempt as assets for certain periods of time. Gifts or voluntary payments:
- for a contribution to an RESP or RDSP
- applied to the purchase or a principal residence – 12 months
- applied to the purchase of an exempt vehicle or applied to the first and last month’s rent necessary to secure accommodation – six months
the above timeframes may be extended if there is a reasonable explanation as to why the gift cannot be used for the purpose intended within the suggested timeframe.
if a gift is given for an exempt reason and is not used for that purpose or not used within the asset exemption timeframe, and does not fall within the $10,000 exemption limit and there is no reasonable reason to extend that timeframe the gift would be considered income in the month it was originally received and an asset in the following months.
An inheritance can be considered a gift or voluntary payment. If an inheritance is $10,000 or less it may be fully exempt under this policy as long as no other gifts or voluntary payments have been made in the 12-month period which result in payments above the $10,000 limit. If there have been previous gifts or voluntary payments made within the 12-month period the inheritance may be exempt up to $10,000 minus the amount of gifts received during this time.
There is no income charge in the month an inheritance is received for the portion of the inheritance:
- used for approved disability related items or services
- placed in an RESP or RDSP
- used to purchase a principal residence or an exempt vehicle
- that will be applied to the first and last month’s rent necessary to secure accommodations
It should be noted that if the inheritance, or any other gift or voluntary payment is kept and not used for an exempt purpose (as described above), it is treated as an asset the month after it is received and ODSP asset rules apply.
5.1 — Definition and treatment of income
5.9 — Disability related items and services