Reforming Disability Benefits in Ontario

Ontarians with Disabilities Deserve to be Taken Off Welfare

Jun 30, 2009 Angela Browne

In 1998, when both Ontario Works and ODSP programs were created, people with disabilities were promised they would be taken off welfare; so far it is not the case.

When Mike Harris reformed the welfare system in 1998, his government passed the Social Assistance Reform Act, which essentially repealed the old Family Benefits Act and the General Welfare Assistance Act. In their stead, two new programs were created: Ontario Works, for short-term employable persons without any other resources and Ontario Disability Support Program, for persons with disabilities that were deemed eligible and require assistance for a longer period of time.

People With Disabilities Were to Be Taken Off Welfare

At the time of creating the Ontario Disability Support Program (ODSP), the program was introduced as a "separate program for persons with disabilities" that was "separate from welfare". The program was sold as a program that would meet the needs of people with disabilities by excluding them from participation requirements, for example and paying more money. A new centralized administration was set up to test and determine eligibility for benefits under the ODSP program that would be separate than the local offices. People that were already receiving disability-based benefits under the Family Benefits Act were "grandparented" to the new system.

While the new program is somewhat of an improvement over the old one, recipients of ODSP have not been taken off welfare, despite claims to the contrary. Many rules governing receipt of ODSP are similar to those for people receiving Ontario Works. For example, earnings are treated exactly the same way for ODSP recipients as they are for recipients of welfare. Requests for health benefits for ODSP recipients must still be made through their local Ontario Works offices. Income from third party sources is still deducted dollar for dollar from ODSP cheques, similar to the way unearned income is deducted from OW cheques. When the Ontario Child Benefit was put into place, rates for ODSP as well as for OW were reduced in order to "get children off welfare".

Spousal and Adult Dependent Income and Assets Counts Against ODSP Recipients

Finally, but most importantly, ODSP like OW, is based on family size and the ages of children in one's household. If an ODSP recipient is married or living common law, the income of their partner or common law spouse is treated as income. The assets of the partner or common law spouse is also taken into consideration when reviewing eligibility for the recipient. In most cases, once a child reaches the age of eighteen years and if they are not in school, their income and assets affects the benefits of their parents. This tangled web was put into place for welfare to encourage members of a family unit to work together to get the family off welfare.

However, when it comes to recipients of ODSP, they are not required to work and in many cases, recipients are unable to work. While recipients of ODSP are still required to obtain additional income sources where available, such as federal CPP-Disability benefits or EI, their spouses or partners become unwitting participants in this tangled web.

If a recipient lives with a common law spouse or marries, the spouse (if not disabled themselves) must sign a participation agreement with Ontario Works. The only exceptions to this requirement are if the spouse is working or attending school to the extent that services from Ontario Works would not be of additional benefit; the spouse is experiencing temporary medical conditions or ill health; or if the spouse is required by the ODSP recipient to be in a caregiving capacity (which is restrictively defined).

ODSP Recipient Discouraged From Forming Partnerships or Marrying

However, in most cases, if the spouse does not have a disability or claim to have one, they are likely working. If they are living with an ODSP recipient, fifty percent of their net income is deducted off the ODSP income the recipient with a disability is receiving. As the spouse works more hours, the recipient gets less and less money. At some juncture, the spouse can technically earn enough so the recipient loses their entitlement to income support from ODSP altogether, leaving that person totally dependant on their working partner. Further, the spouse is also tangled in the nasty web of income and asset regulations tied to ODSP as well, even if they do not want these benefits. The spouse cannot save for their own retirement, cannot save more than the maximum permitted and must report their earnings, tax returns and other documents to the ODSP office, despite the fact they have nothing to do with ODSP.

For persons with disabilities that get their income support from another source, such as Worker's Compensation, Employment Insurance, Long Term Disability, Income Replacement Benefits under an auto insurance plan or Canada Pension Plan, the income and assets of their partners or spouses will not affect their benefits whatsoever. Only persons reliant on ODSP are affected in this way, which makes escaping poverty that much harder for these families.

At the present time, more than 80% of all ODSP households are single persons with no children living at home. Conversely this figure is the same figure for the number of households not on ODSP that are either married or living with somebody else in a common law relationship. According to the National Council of Welfare, persons are less likely to live in poverty if they are married or living with a partner. Given that the rules and regulations of ODSP discourage its recipients from seeking out and living with a partner (which is one way to reduce their chances of falling into poverty), these people are condemned to poverty at a maximum of approximately $1,000 per month in income.

Unless the working spouse or partner is making a significant amount of money, it is impossible for a couple with one partner on ODSP to escape the tangled web of income and asset rules that tend to prevent an escape from poverty. This is one consideration that should be made by the provincial government's committee that it will soon appoint to review both income support programs.

The copyright of the article Reforming Disability Benefits in Ontario in Canadian Affairs is owned by Angela Browne. Permission to republish Reforming Disability Benefits in Ontario in print or online must be granted by the author in writing.