Odsp investment and savings slideshare version

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This webinar is presented by Sallie Hunt of Northwest Community Legal Clinic. It gives community service providers and advocates an overview of investment and savings vehicles for Ontario Disability Support Plan (ODSP) recipients. The webinar looks at exempt assets and allowed investments such as Registered Education Savings Plans and Registered Disability Savings Plans, and how they be can used to benefit ODSP recipients.

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  • Feb 28, 2011
  • Feb 28, 2011
  • Feb 28, 2011
  • Feb 28, 2011
  • Feb 28, 2011
  • Feb 28, 2011
  • Feb 28, 2011
  • Feb 28, 2011
  • Feb 28, 2011
  • Feb 28, 2011
  • Feb 28, 2011
  • Feb 28, 2011
  • Feb 28, 2011
  • Feb 28, 2011
  • Feb 28, 2011
  • Feb 28, 2011
  • Feb 28, 2011
  • Feb 28, 2011
  • Feb 28, 2011
  • Feb 28, 2011
  • Feb 28, 2011
  • Odsp investment and savings slideshare version

    1. 1. To view this presentation as a webinar with sound visit CLEONet http://www.cleonet.ca/training CLEONet is a web site of legal information for community workers and advocates who work with low-income and disadvantaged communities in Ontario. www.cleonet.ca
    2. 2. About our presenter… Sallie Hunt is staff lawyer at Northwest Community Legal Clinic, a legal clinic that provides services for low income people in the Kenora and Rainy River Districts. Before coming to the clinic, she practiced family and criminal law in St. Catharines, Ontario and worked at the Law Society of Upper Canada and at Legal Aid Ontario in Toronto.
    3. 3. Enhancing Quality of Life for a Person with a Disability on ODSP Disability Benefits Sallie Hunt Northwest Community Legal Clinic 1-800-403-4757
    4. 4. TOPICS: Investments <ul><li>Exempt Assets </li></ul><ul><li>Investments for people receiving ODSP benefits </li></ul><ul><li>RESPs & RDSPs </li></ul>
    5. 5. Locating ODSP Policy Directives <ul><li>To find ODSP Policy Directives – Go To: </li></ul><ul><li>Ministry of Community and Social Services at http://www.mcss.gov.on.ca/mcss/english/index.htm </li></ul><ul><li>Click on Ontario Disability Support Program </li></ul><ul><li>Click on ODSP policy directives </li></ul><ul><li>Click on Income Support Directives </li></ul><ul><li>http://www.mcss.gov.on.ca/mcss/english/pillars/ social/directives/ODSP_incomesupport.htm </li></ul>
    6. 6. Exempt Income/Assets on ODSP <ul><li>$5,000 for a single person </li></ul><ul><ul><li>Income was increased to $6,000 from gifts, voluntary payments, payments from trusts or life insurance policy, honorariums or windfalls </li></ul></ul><ul><li>Owning a home or Principal Residence </li></ul><ul><li>Vehicle </li></ul><ul><ul><li>2 nd vehicle if required for work </li></ul></ul><ul><li>CCTB, NCBS, OCB, etc. </li></ul>
    7. 7. Exempt Assets on ODSP <ul><li>Payments from any source for disability-related items </li></ul><ul><li>Pre-paid funeral </li></ul><ul><li>Earnings & Assets of dependent children </li></ul><ul><li>Earnings & Assets of a dependent adult while attending school </li></ul><ul><li>Locked-in RRSPs and locked-in pensions </li></ul>
    8. 8. Exempt Assets on ODSP <ul><li>Trust fund from insurance proceeds or inheritance* </li></ul><ul><li>Life insurance policy* </li></ul><ul><li>Pain & suffering awards/settlements* </li></ul><ul><li>WSIB non-economic loss (NEL) awards* </li></ul><ul><li>*To a Maximum of $100,000 </li></ul>
    9. 9. Investments Allowed on ODSP <ul><li>RESPs* </li></ul><ul><li>Registered Education Savings Plans </li></ul><ul><li>*Lifetime Limit of $50,000 </li></ul><ul><ul><li>CESGs + CSBs </li></ul></ul><ul><li>RDSPs** </li></ul><ul><li>Registered Disability Savings Plans </li></ul><ul><li>**No Maximum Limit </li></ul>
    10. 10. RESPs – What is an RESP? <ul><li>RESP – Fed Gov’t incentive program for parents and family to save for a child's post-secondary education </li></ul><ul><li>RESPS include: 1. Canada Education Savings Grant (CESG) </li></ul><ul><li>CESG* pays 20% (or more) of annual contributions made to an RESP – to a maximum of $500/child </li></ul><ul><li>($1,000/child if unused from previous year) </li></ul><ul><li>* Lifetime Limit of $7,200 </li></ul><ul><li>If funds are taken out of an RESP prematurely  must repay the Gov’t of Cda for the CESG (unless child/beneficiary is already attending a post-secondary institution) </li></ul>
    11. 11. RESPs – include: 2. CLB – Canada Learning Bond <ul><li>CLB pays $500 first year and $100 per year* until child is 15 </li></ul><ul><ul><li>If child qualifies – born after Dec. 31, 2003, & receives the National Child Benefit Supplement (NCBS) </li></ul></ul><ul><li>*To a Maximum of $2,000 </li></ul><ul><li>The first deposit of the CLB includes an extra $25 to cover the cost of opening an RESP </li></ul><ul><li>You do not have to contribute money to receive CLB payments – JUST OPEN an RESP </li></ul>
    12. 12. RESPs – To Open an RESP <ul><li>It costs $1.00 to open an RESP account for a child with a RESP provider (most financial institutions) </li></ul><ul><li>You will need a Social Insurance Number (SIN) for you and your child </li></ul><ul><li>If you do not have a SIN – Apply at your local Service Canada office or go online to www.servicecanada.gc.ca </li></ul>
    13. 13. RESPs – To Open an RESP <ul><li>You do not need a bank account to open an RESP </li></ul><ul><li>There are several types of RESPs – Family Plan, Individual Plan or Group Plans </li></ul><ul><li>There is no age limit for opening an RESP </li></ul><ul><li>An RESP can stay open for a maximum of 26 years (31 years for a person with a disability) </li></ul>
    14. 14. RESPs – Contributions <ul><li>You will not be taxed on the amount you contribute to your RESP </li></ul><ul><li>Interest paid on any money borrowed to contribute to an RESP cannot be deducted </li></ul><ul><li>You do have to pay taxes on the money you earn in the RESP plan as interest </li></ul><ul><li>For more info on RESPs go to: http://www.cra-arc.gc.ca/E/pub/tg/ rc4092/rc4092-e.html#P52_7449 </li></ul>
    15. 15. RESPs – Registered Education Savings Plans for those on ODSP <ul><li>Any member of the family benefit unit can have an RESP  Exempt Asset </li></ul><ul><li>Any money or gifts paid into an RESP  Exempt Asset </li></ul><ul><li>Fed Gov’t matching payments - CESG or CLB into RESP  Exempt Asset </li></ul><ul><li>Beneficiary of RESP can be changed from one child to another </li></ul>
    16. 16. RESPs – Registered Education Savings Plans for those on ODSP <ul><li>RESP funds used for Education Costs  Exempt </li></ul><ul><ul><li>can be used for part- or full-time study </li></ul></ul><ul><li>Some of the RESP funds can be used as an Educational Assistance Payment * to fund a Qualified Educational Program </li></ul><ul><li>*To a Maximum of $5,000 </li></ul><ul><li>Educations Costs : Tuition & other fees, books, instructional supplies & equipment, transportation, and disability-related expenses </li></ul>
    17. 17. RESPs –Child does not continue Education after high school <ul><li>If your child does not continue education after high school : </li></ul><ul><li>(1) Wait as your child may decide to study later </li></ul><ul><li>(2) Transfer the money to a sibling’s RESP </li></ul><ul><li>(3) Transfer money to an RRSP or </li></ul><ul><li>(4) Consult with your RESP provider about withdrawing your savings </li></ul>
    18. 18. RDSPs – What are Registered Disability Savings Plans? <ul><li>RDSP is a savings plan for parents and others to save for a person who is disabled and eligible for the Disability Tax Credit </li></ul><ul><li>Contributions to an RDSP are not tax deductible </li></ul><ul><li>Contributions can be made until the disabled/beneficiary turns 59 years of age </li></ul><ul><li>For more info go to: http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/rdsp-reei / </li></ul>
    19. 19. RDSPs – To Set Up an RDSP <ul><li>First - Qualify for federal Disability Tax Credit (DTC) </li></ul><ul><li>Complete Form T2201 , Disability Tax Credit Certificate - http://www.cra-arc.gc.ca/E/pbg/tf/t2201/ </li></ul><ul><li>Take the form to a qualified health professional </li></ul><ul><li>Once completed send it to the Winnipeg Tax Centre </li></ul><ul><li>This can be sent at any time during the year </li></ul>
    20. 20. RDSPs – Contributions <ul><li>Contributions </li></ul><ul><li>No annual limit </li></ul><ul><li>Contributions are limited to a lifetime amount of $200,000 </li></ul><ul><li>RDSPs include contributions from: </li></ul><ul><li>1. Canada Disability Savings Grants (CDSG) </li></ul><ul><li>2. Canada Disability Savings Bonds (CDSB) </li></ul>
    21. 21. CDSG + CDSB Contributions <ul><li>1. Canada Disability Savings Grants (CDSG)* </li></ul><ul><li>Fed Gov’t will match annual contributions to a maximum of $3,500/year and to a lifetime CDSG limit of $70,000 </li></ul><ul><li>2. Canada Disability Savings Bonds (CDSB)* </li></ul><ul><li>Bonds up to $1,000/year  provided for low- & modest-income families, to a lifetime limit of $20,000 </li></ul><ul><li>No requirement to contribute to RDSP to access CDSBs </li></ul><ul><li>*Can be paid until the Beneficiary turns 49 </li></ul>
    22. 22. RDSPs -Withdrawal of Funds <ul><li>Contributions made to an RDSP are not included as income for the beneficiary when withdrawn </li></ul><ul><li>But, the Grant (CDSG), Bond (CDSB) and any investment income earned  will be included in the beneficiary’s income for tax purposes when the money is withdrawn </li></ul>
    23. 23. RDSPs – Registered Disability Savings Plans for those on ODSP <ul><li>All funds in RDSPs  Exempt Asset </li></ul><ul><ul><li>no matter who makes payments to RDSP </li></ul></ul><ul><li>Canada Disability Savings Grants (CDSG) & Bonds (CDSB)  Exempt Asset </li></ul><ul><li>Income (interest) earned & reinvested in RDSPs  Exempt Asset </li></ul><ul><li>All withdrawals from RDSPs  Exempt Asset /Income for ODSP (but not for income tax) </li></ul>
    24. 24. This webinar was brought to you by CLEONet For more information visit the Social Assistance and Pensions section of CLEONet at www.cleonet.ca For more public legal information webinars visit: http://www.cleonet.ca/training

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