Navigating the complexities of financial planning for a person with a disability can be overwhelming! Let us guide you through the process step-by-step to ensure that you are benefitting from all the entitlements you are eligible for and that planning is done correctly so that these benefits are protected when situations change. In addition, we are here to explain and educate so that everyone involved understands what is being done and there is no confusion, something we hear of often! See below for some of the areas that comprehensive planning will cover.
Disability Tax Credit
The Disability Tax Credit (DTC) is available for individuals with a severe and prolonged physical or mental impairment that has lasted or is expected to last for a continuous period of at least one year. It provides a non-refundable tax credit used to reduce the income tax of a person with a disability. Should that individual not have any taxable income, a parent or caregiver can claim the DTC under certain conditions. If the onset of the disability pre-dates the DTC approval, a tax adjustment can be requested for up to 10 previous years, resulting in substantial retroactive tax refunds. Approval can also open the door to other valuable financial assistance programs such as the Registered Disability Savings Plan and the Child Disability Benefit.
Registered Disability Savings Plan
The Registered Disability Savings Plan (RDSP) is a type of investment account intended to provide long-term financial security for a person with a disability, with all earnings accumulating tax-free until withdrawn. The federal government will contribute as much as $3 in grant for every $1 contributed, to a maximum of $70,000, and up to $20,000 in bond money. This is intended to help lower income individuals save and requires no personal contribution at all. Generally, an RDSP will not negatively impact other federal and provincial government programs and services, and there is no restriction on how the money is used.
If you already have an account open with another institution or financial advisor but are not completely satisfied with the service and advice you are receiving, consider transferring it to be managed by True Life Insurance and Estate Solutions. It is not as complicated as you might think! All the required paperwork is prepared by us for your signature. Once signed, we can process the transfer on your behalf. You do not need to contact your bank or financial advisor to coordinate the transfer. Contact us to find out more! You can book an appointment online or call us at 613-322-2708.
Ontario Disability Support Program
A person with a disability, who is age 18 or over, may be eligible for the Ontario Disability Support Program (ODSP) regardless of whether they live with their parents or not. ODSP offers:
- financial assistance to help with essential living expenses;
- health, dental and vision benefits; and,
- employment supports to help find and keep a job, or career advancement.
ODSP recipients and their parents or caregivers are always looking for ways to supplement their benefits however they have to ensure to stay within restrictive provincial guidelines. There are exceptions to the guidelines with a number of ways to save money beyond the $40,000 limit without jeopardizing ODSP benefits. Ask us how! You can book an appointment online or call us at 613-322-2708.
No-Medical Life Insurance
Anytime a person passes away, there are expenses involved such as funeral costs and final estate taxes. Some people like to give a charitable donation to an organization that helped their disabled loved one. Even if an individual has a pre-existing medical condition or disability and are hard to insure, they may be able to get insurance coverage. We can determine your eligibility with a few simple questions.
One of the biggest concerns parents of a child with a disability face is what will happen when they pass away. Without a strong understanding of various government programs and trusts, an improperly set up estate plan can cause further grief. Let us help you answer some of the unique questions that come up, including:
- How much money do we leave our disabled child?
- Who will manage the money and other assets?
- Will an inheritance affect our child’s government benefits?
- How much do we leave our other children?
- What happens when our disabled child passes away?
A Henson Trust is used in the context of estate planning for a person with a disability where the beneficiary (the person with a disability) holds no ownership of the trust and the trustee has sole discretion to distribute income and capital from the trust. This structure allows for provincial disability support payments to be protected in most provinces. Henson trusts can be set up as “inter vivos” trusts, meaning the trust is set up while the parents/caregivers are still alive, or as “testamentary trusts,” which is a clause written in a will where the trust is only established upon death.
Lisa Whittleton is a registered mutual fund representative with Excel Private Wealth in the Province of Ontario, and an independent life and health insurance agent in the Province of Ontario with IDC Worldsource Insurance Network Inc. The information on this website is not intended as financial advice without an assessment of your personal situation. Always consult a lawyer or accountant for detailed legal or tax advice.