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ODSP & RDSP Services that Clash ?

The Ontario Disability Support Program ( ODSP ) and the Registered Disability Savings Plan ( RDSP ) seem to be contradictory to each other.

What is an ODSP? The on-line resources say:

ODSP income support helps people with disabilities who are in financial need pay for living expenses like food and housing. It also provides health benefits like drug and dental coverage.

ODSP is a program of last resort.

Thus the person with a disability must have little or no income from a job or any other area. For many disabled folks in Ontario, it is their only real income (and it is not that much).


We have seen that the RDSP is a long-term savings program for the disabled. How does it affect the ODSP program? I had heard a few different interpretations, so I asked my MPP Lisa MacLeod to investigate, and her office received the following from the Ministry of Community and Social Services. Opinion is as follows:

An RDSP is fully exempt under social assistance as income and assets, and does not impact eligibility for ODSP income support. All funds held in RDSPs are exempt when assessing eligibility for ODSP.  There is no maximum applied to this exemption, although the federal government limits RDSP contributions at $200,000.

ODSP recipients can also make unlimited withdrawals from their RDSPs, and these withdrawals will not affect their financial eligibility for ODSP or the amount of income support if they are spent in the month withdrawn.  Voluntary contributions to an RDSP from family, community groups or others will not affect a person’s financial eligibility for ODSP or the amount of income support provided.

Is it Worthwhile Having an RDSP?

An RDSP cannot be used to supplement income. Any money withdrawn will need to be used within a month or that income will lower the ODSP payments to the disabled person. Any money withdrawn from an RDSP would be a short-term or one-time cost.

Given how little income the ODSP pays, any RDSP opened would most likely receive a CDSB (Canadian Disability Savings Bond) of $1000 a year. This suggests it is worthwhile opening an RDSP even if no money was available to deposit into the account. The RDSP beneficiary will not have their ODSP penalized for the RDSP.

How do they withdraw money from their RDSP without penalties? I will be writing about this very soon.

Feel Free to Comment

  1. ODSP is a provincial social assistance program. The DTC is managed by the federal government. These programs have different definitions of disability to determine eligibility. The definitions for both programs require an applicant’s disability to be severe and prolonged.

    Here is where they differ. To qualify for the DTC, the disability (or rather the substantive impact of the disability on a person’s daily living) must be present at least 90% of the time. ODSP doesn’t have this requirement.

    A person with multiple sclerosis still has MS if they are in remission, but it does not impact their activities of daily living. Various episodic mental health conditions also fall into this, where you are able to manage your daily life until a debilitating manic episode. Epilepsy is another example. These scenarios make it difficult (although not necessarily impossible) to qualify for the DTC. The same does not apply for ODSP.

    There are many who qualify for ODSP who have been rejected for the DTC.

    Again, having a disability that is more episodic does not necessarily make it impossible to qualify for the DTC. In many cases people are rejected not because they objectively fail to meet the criteria, but because the application was not filled out effectively. There is a guide that provides a plain language description of the DTC criteria, but that is all it is… a description of the criteria and not the actual criteria in all its manifest and detailed glory. Your doctor may be an excellent doctor, but that doesn’t mean they will sufficiently understand the DTC criteria or fill out the application form properly.

    If an applicant is legally blind or if they have paralysis from the waist down, applying for the DTC is straight-forward. If an applicant has autism, or diabetes, or mental health diagnosis, applying for the DTC can be a real challenge.

    Just for transparency, I am a financial advisor. Almost all of my clients either have a disability or have a family member with a disability who they care for or support in some way. However, my services do not include DTC application support services. I occasionally refer people who need this help to others I trust, but I do not earn any revenue by helping people apply for the DTC and I do not receive any referral fees if I refer somebody to such a service.

  2. I would be interested in having your “guru” (or anyone that can) answer this question for me. Why would someone who is and has been receiving ODSP since age 18 and is now 40 not be eligible for the DTC?

  3. It is true that a “payment” (i.e. withdrawal) from an RDSP is not treated as income or an asset by ODSP in the month it is received. It would then be treated as an asset, if any is remaining, starting the following month. But that does not necessarily mean the demise of ODSP eligibility.

    As of September 1, 2017, the ODSP asset limit was increased from $5,000 to $40,000. This significant increase provides a lot of breathing room to hold on to a fair bit of the RDSP withdrawals. Even if a person’s savings crept up near the $40,000 level, the money could be placed in a segregated fund account. ODSP treats assets of up to $100,000 in segregated funds, cash value life insurance, and a disability trust, combined, as exempt.

    With proper planning, excess RDSP withdrawals can be held onto without jeopardizing ODSP eligibility.

      1. Here are links for two articles I wrote about the recent ODSP changes, if you are interested.

        ODSP Changes Explained:
        ODSP Needs To Be Simplified:

        If my memory serves me right, your son is still a minor (i.e. has a few years to go before ODSP becomes an option at age 18). If you think the RDSP is complex, wait until you start diving into the details of ODSP. Given how you dive into other topics, I sense ODSP may become a major topic for you to write about, if your son needs ODSP down the line.

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