(A Minute of Silence.)
My grandfather fought in WWII. He was 26.
My grandfather made it safely home, and my father was born after the war.
He is now confined in his bed. He is 89.
Lest we forget.
Photo courtesy of Wikipedia.
Monthly Archives: November 2009
A Brief Note on the Registered Disability Savings Plan (RDSP)
What Is the RDSP?
The Registered Disability Savings Plan (RDSP) is the Canadian federal government’s initiative in assisting individuals with disabilities.^ To become eligible for the RDSP, you must be a Canadian resident under 60 years of age and eligible for the Disability Tax Credit.*
Once an RDSP account is open, anyone with written permission can contribute to the program. Unlike the Registered Retirement Savings Plan (RRSP), there’s no limit on the annual contribution. The annual deadline for contribution is December 31 each year.
There is, however, a lifetime limit of $200,000. Contributions to an RDSP are not tax deductible and can be made until the end of the year in which the beneficiary turns 59 years of age.
Perhaps the biggest incentives for opening an RDSP are the RDSP grants and bonds programs.#
The RDSP Grant
The Government of Canada will pay matching grants of 300, 200, or 100 percent, depending on the beneficiary’s family income and the amount contributed. An RDSP can receive a maximum of $3,500 in matching grants in one year, and up to $70,000 over the beneficiary’s lifetime. A grant can be paid into an RDSP on contributions made to the beneficiary’s RDSP by December 31 of the year the beneficiary turns 49 years old.
The RDSP bond
The government will pay income-tested bonds of up to $1,000 a year to low-income Canadians with disabilities, regardless of the amount contributed. The lifetime bond limit is $20,000. A bond can be paid into an RDSP until the year in which the beneficiary turns 49 years old.
However, there’s a catch – the grants and bonds must remain in the RDSP for 10 years. Otherwise they will have to be repaid back to the government.
A Brief Note on the Ontario Disability Support Program (ODSP) and the Henson Trust
Most social assistance programs funded by the public purse have financial restrictions on eligibility. The Ontario Disability Support Program (ODSP) is no exception. To qualify for ODSP, the recipient must not have more than the prescribed assets. (For more information, read my blog “Too Much Money? ODSP’s Asset Restrictions,” posted on April 20, 2009.)
A Henson trust refers to a discretionary trust where the trustees have absolute discretion on the trust’s administration, while the beneficiaries under the trust cannot compel the trustee to pay out money. The name of the trust is derived from the Ontario Court of Appeal case Ontario v. Henson.*
In Henson, the settler of the trust mandated that the capital and income of the trust was not to vest in the beneficiary, and the only interest the beneficiary could have was the payments actually made. (In other words, there’s nothing legally the beneficiary can say or do to get more money than what’s actually paid by the trustees.) Therefore, the court ruled that the beneficiary did not have a beneficial interest in the trust.
Henson was considered a milestone in trust law in Ontario. It opened a door through which the asset restrictions of many state-funded welfare programs may be circumvented legally. The method of utilizing a discretionary trust to secure state benefits soon became widespread.
At the same time, creating a Henson trust means that the beneficiary is entirely at the trustees’ mercy. Hence, some lawyers caution their clients only to consider a Henson trust as the very last resort.
It’s important to remember not all discretionary trusts are Henson trusts. For example, 10 years after Henson in Ozad v. Ontario,^ the court held that whether a trust should be considered a Henson trust would rest on the chosen wording.
A trust will become a “liquid asset” of its beneficiary if the words creating the fund oblige the trustee to consider the needs of the beneficiary, unless there is a provision in the document removing the fund in whole or in part from the reach of the beneficiary.
For example, in Keddy v. Director, Ontario Disability Support Program,# the court has made it clear that an unsheltered trust will be included as assets. Accordingly, of the accumulated assets exceed the prescribed level, the applicant will be disqualified from the ODSP.
*[1989] 36 E.T.R. 192; aff’g [1988] O.J. No. 1121
^[1998] O.J. No. 6498
#[2002] CanLII 17592
Note: Please keep in mind that this article is provided for information and educational purposes. It does not constitute legal advice and should not be regarded as such. The law may have changed since the publication of the article.
Let PSWLaw fight for your ODSP appeal before the Social Benefits Tribunal.
Legal Assistance for the Middle Class in Manitoba
The Law Society of Manitoba recently approved a pilot project to make lawyers more accessible to those who often fall between the cracks of the legal system – the middle class, reported The Vancouver Sun.
While the poor in Manitoba have access to Legal Aid Manitoba, and the rich can simply write a cheque, many middle class individuals find the cost of retaining a lawyer daunting.
As a result, many people have no alternative but to represent
themselves without adequate understanding of the rules and procedures.
It often results in delay and waste of time and resources. A pity.
To address this problem, the Law Society of Manitoba will act as a brokerage for legal services on behalf of the Family Law Access Centre.
The Law Society will seek to buy legal services from the private bar at a discount rate and make them available to the public for family law cases involving issues such as divorce, custody, and support.
As a lawyer who practises in family law, I applaud this initiative. On many occasions I have personally had to decline meritorious matters because of the individuals’ lack of financial resources.
Let’s see if the pilot project becomes a success. Perhaps the Law Society of Manitoba’s Ontario counterpart will then follow suit.
PSWLaw- your family law legal advisor.
Tagged access, custody, divorce, Family Law, LSUC, manitoba, pilot project, support
