ODSP and Ontario Medical Malpractice Claims

July 28, 2020

Since August of 2017, personal injury funds paid for future medical care and pain and suffering (and any accompanying prejudgment interest) are fully exempt from consideration for ODSP eligibility.

However, while the lump sum amount is exempt, any interest or other income earned on that exempt award is taken into consideration by ODSP.  In a conventional investment or deposit, any interest generated by the investment or deposit of those exempt funds (whether received or simply accrued) would likely result in a clawback, dollar for dollar, of the monthly ODSP income, and may jeopardize any medical, dental, and housing supports provided by ODSP as well.

Help preserve much-needed ODSP support with a structured settlement

Currently, structured settlements funded with exempt settlement funds are not considered assets, and the full amount of structured settlement payments received by an ODSP recipient, up to the initial funding amount of the structure, is not considered income by ODSP.

For example, if $1,000,000 of future care and pain and suffering settlement funds are used to establish a structured settlement, the monthly payments or lump sums generated by that structure are fully exempt as income to the ODSP recipient until the cumulative total of the payments, made over time, exceeds $1,000,000. If the cumulative total of the payments never reaches $1,000,000 before the ODSP recipient reaches age 65, all of the structure payments will be fully exempt for ODSP purposes.

Disregarding the opportunity to structure, and instead making a choice to conventionally invest or deposit a settlement or award, may result in the partial or complete loss of ODSP benefits.

Don’t forget about minor plaintiffs not yet eligible for ODSP

In medical malpractice claims, many plaintiffs are under 18 and not yet eligible for ODSP support. 

Those plaintiffs not yet old enough to apply for ODSP may have access to Assistance for Children with Severe Disabilities (ACSD). This program applies an income-tax based definition of income for purposes of determining eligibility. Therefore, structured settlement payments arising from ANY damages received can help minor plaintiffs receive much-needed additional support immdeiately.

Additionally, they may qualify for support in the future, and the right decisions now can help them in later years.

A parent/guardian of a child under 18 who hopes to maintain the potential for ODSP benefits after age 18 has the best chance of doing so by structuring as much as possible of the exempt funds received.

 

ABOUT PHIL THORPE

Phil is the Managing Partner of McKellar Structured Settlements. He has a high level of technical expertise in the area of Accident Benefits and has been involved with structured settlements since 1994. To learn more about Phil, check out his bio here, or contact him directly here.