ODSP and Aging

ODSP & Aging: What You Need
to Know
Presented by
Kingston Community Legal Clinic
September 2013

About the Legal Clinic
 Providing free legal services in matters
relating to:
 rental housing
 income support (ODSP, OW, public pensions, EI
appeals)
 human rights
 education

Overview
 ODSP after age 65: You mean I can still
keep my benefits?
 Seniors pensions: How will my rent subsidy
be affected?
 Income fluctuations and Old Age Security:
Why has my pension decreased and how
can I fix it?
 CPP Early Retirement: Should I apply?

ODSP after age 65
 Your ODSP benefits will not be terminated
just because you turn 65
 In fact, seniors who do not receive Old Age
Security are automatically eligible for ODSP
[Reg. 222/98, s. 4(1)2]
 The question is whether you qualify
financially for ODSP benefits once your
OAS begins

Financial Eligibility for ODSP Generally
 ODSP looks at how much money you could get from
their program
 E.g. a single person can get $1075 monthly for basic needs
and shelter
 ODSP then subtracts any income you receive
 E.g. if a single person received CPP-D of $800 monthly, his or
her ODSP entitlement would be $275
 You will be financially eligible for ODSP if your
income is less than what you would receive from
ODSP

Finances After Age 65
 Most seniors will start to receive Old Age Security
(OAS) from the federal government after age 65
 Low income seniors in all provinces are also eligible
for the Guaranteed Income Supplement (GIS)
 Low income seniors in Ontario may also be eligible
for another small pension known as the Guaranteed
Annual Income System (GAINS).

Sample OAS Income
 A single senior with no other income can
receive:
 $549.89 for OAS
 $749.62 for GIS
 $83 for GAINS (in Ontario only)
 Combined, the maximum income for a single
person on OAS, GIS and GAINS is $1378.51
[Above information current until September 30, 2013]

Compared to Sample ODSP Income
 For a single person:
 Maximum Shelter: $479
 Basic Needs: $596
 TOTAL: $1075
 Therefore, most seniors will have income
greater than what ODSP will pay, making
them financially ineligible
 $1378.51 - $1075 = $303.51 over budget

How Can I Possibly Keep My ODSP?
 You will not qualify for regular benefits
(shelter and basic needs)
 However, you may qualify for Extended
Health Benefits (EHB) if your health care
expenses are high

Sample ODSP Budget with High Health
Expenses- “Sally”
 Sally is a single person paying market rent:
 Shelter: $479
 Basic Needs: $596
 Special Diet: $124 (Diabetes/Hypertension $86 + Osteoporosis
$38)
 MSN Incontinence Supplies: $175
 MSN Medical Travel: $20
Total ODSP budget: $1394 = FINANCIALLY ELIGIBLE FOR
EHB
(ODSP budget is greater than OAS income of $15.49)

Sally: “Why bother?”
 Sally’s ODSP budget exceeds her OAS income by
$15.49
 She does not want the hassle of reporting to ODSP
over $15.49
 She has her drugs covered by the Ontario Drug
Benefit (ODB)
 She was smart to apply for the Consumer Co-
Payment Program, so her prescription drugs still only
cost $2 because her income is lower than $16,018

What’s the Big Deal?
 When a person qualifies for EHB, certain medical
benefits are paid outright, without having income
deducted
 For Sally, the EHB cheque she would receive from
ODSP each month would be $195
 MSN Incontinence ($175) and Travel ($20) are paid each
month
 Her total monthly income could therefore be
$1350.41 OAS + $195 EHB = $1545.41
 Also, dental, vision and hearing are covered

What if my ODSP entitlement is less
than Sally’s?
 “Burt” is a single person in a subsidized apartment:
 Basic Needs $596
 Shelter $140
 Special Diet: $191 (Cirrhosis Stage 3)
 MSN Incontinence Supplies: $225
 MSN Medical Travel: $75
Total ODSP budget: $1227 = FINANCIALLY INELIGIBLE FOR
EHB (so far)
(ODSP budget is less than OAS income of $1378.51)

What Can Burt Do?
 Burt can ask ODSP to consider health costs other
than those that appear on his cheque:
 E.g. prescription drugs, dental costs, hearing aids and glasses
 BUT NOTE:
 ODSP believes drug costs do not count because drugs are
covered for seniors
 Dental costs are averaged over one year and often based
on ODSP billing rates- which are far lower than the real rates
 Costs for hearing aids and glasses are averaged over thre
years (unless you are diabetic and require glasses more
frequently)

Tips to help you qualify for EHB
 If you are in subsidized housing ►maximize your
shelter allowance
 Your phone or cable can be covered if used for security or
entry to the building
 You should get tenants’ insurance covered by your shelter
allowance
 Between ages 62-65 years:
 Get your teeth checked and cleaned frequently
 Get glasses
 Make sure you maximize your entitlement to MSN benefits and
Special Diet Allowance
 Get legal advice immediately if you are refused EHB

Seniors Pensions and Subsidized
Housing
 Basic rule for subsidized housing is that rent
is 30% of your income
 When on OW or ODSP, your rent is set at a
fixed amount by law
 For a single person, it varies from $85 to approximately
$200 or more depending on which utilities are included

My rent will increase 200%?
 Burt’s subsidized rent was $140
 When Burt switches to OAS, his income will
be $1378.51
 Burt’s rent will now be calculated based on
OAS income:
 $1378.51 X 30% = $413.55
This is a lawful rent increase of almost 200%

What Can Burt Do?
 Get legal advice about EHB
 ODSP may do the EHB calculations using the
subsidized rent, instead of the new rent
 That is because the rules for EHB say that Burt must
be eligible for EHB the same month he starts getting
his OAS
 However, Burt’s subsidized rent will not increase for
2 months due to the current subsidized housing rules
 The effect of the EHB rules and the subsidized
housing rules on seniors may be discriminatory

After OAS: Why has my pension
decreased?
 Your eligibility for GIS and GAINS depends
on your income
 Government looks at your tax returns from
the previous year to determine your pension
amount going forward
 If you had income from another source last
year, your pension could decrease

Example: “Mary” cashes out an RRIF
 Mary’s only source of income is OAS/GIS/GAINS
 Mary lives in subsidized housing
 Mary had an RRSP that was locked in until she
turned 65
 At age 71, it was rolled over into a RRIF
 She cashed it out 2 months after turning 71
 The RRIF was worth $7000 after penalties
 Mary spent all the money on her grandkids

How is Mary Affected?
 In the year following the withdrawal, Mary lost her
GAINS, and her GIS was significantly reduced due to
income in the previous year
 Her OAS and GIS now total only $925
 BUT her subsidized rent increased after her annual
review because of the income from the RRIF
withdrawal
 So Mary now pays $175 more in rent and gets $425
less in her monthly pensions

What Can Mary Do?
 Mary can ask Service Canada to re-calculate
her GIS
 Service Canada can exclude income where
there has been a loss of pension income
 Mary needs to file a Statement of Estimated
Income
 It is not clear whether a lump sum withdrawal
from a RRIF can be exempt

CPP Early Retirement: Should I apply?
 In 2012, the rules changed
 Your pension will be reduced more if you
take it before age 65
 Currently, it is reduced by 31.2%
 By 2016, it will be reduced by 36%
 You will also have to continue making CPP
contributions if you are working and
collecting CPP before age 65

How do I decide?
 If you are not on social assistance, see a
financial advisor to determine whether early
retirement pension is right for you
 If you are on ODSP or OW, you should also
seek legal advice before you apply for early
retirement pension as it could result in a loss
of your ODSP or OW benefits

Can I be forced to take CPP early?
 No!
 ODSP and OW can force you to pursue other
financial resources (child support, CPP
disability, etc.)
 However, you cannot be forced to take CPP
early
[OW General Regulation, s. 13(2)(c); ODSP General Regulation, s. 11(2)
(c)]

Other Resources of Interest:
 Queen’s University Elder Law Clinic
 (613) 533-2950
 Assists low income people aged 60 & over with Powers
of Attorney, simple wills, age discrimination and elder
abuse
 Advocacy Centre for the Elderly (ACE)
 (416) 598-2656
 Serves people 60 years of age and over in the Greater
Toronto Area, and may also provide services to seniors
outside of Toronto if the case is of significance to the
seniors' community

For More Information:
Kingston Community Legal Clinic
345 Bagot St. (Bagot at Barrack St.)
Kingston, ON K7K 6T8
(613) 541-0777
www.kclc.ca

ODSP and Aging

More Related Content

Viewers also liked (19)

Similar to ODSP and Aging (20)

More from Community Legal Education Ontario (CLEO) (20)

Recently uploaded (20)

ODSP and Aging