There are several upcoming changes to the rules regarding benefits received by people with disabilities from the ministry of social development and social innovation (the “ministry”) regarding asset limits, trust distributions and gifts.
According to a news release from the Ministry dated November 5, 2015, these changes will be implemented as of December 1, 2015. However, despite proposed amendments to the Employment and Assistance for Persons with Disabilities Regulation (the “Regulations”) on the Ministry website, we are still awaiting the actual changes to be implemented in the Regulations. We will review the proposed changes in this article.
Assets that people receiving disability benefits can hold in British Columbia are expected to be increased from $5,000 to $100,000 for individuals and from $10,000 to $200,000 for couples. This change means that people receiving disability benefits do not have to deplete their assets before receiving disability benefits. Furthermore, people receiving disability benefits can save and keep gifts, inheritance or other large sums of money they may receive while on disability without affecting their benefits, so long as it is under the prescribed limits.
This increase in asset limits means that any money from an inheritance or gifts or otherwise that are under the new limits will not have to be put into trust. However, if an inheritance amounts to more than the new limits, a discretionary or non-discretionary trust could be created to hold the excess funds. A discretionary trust is managed by a trustee who acts according to their discretion and does not allow the person receiving disability benefits to have control over the funds held in the trust. There is no limit on the amount that can be held in a discretionary trust. A non-discretionary trust is also managed by a trustee, but the trustee does not have total authority over how the money is paid out and the person receiving disability benefits may have some control over the trust funds. The limit on the amount that can be held in a discretionary trust is $200,000. With respect to distributions from trusts, the proposed changes state that the current $8,000 per year limit on payments from trusts to allow people receiving disability benefits to live more independently will be eliminated.
Finally, under current policy, people receiving disability benefits can only receive one-time gifts without affecting their eligibility. With the proposed changes, people with disabilities will be able to receive an unlimited number of cash gifts and still be eligible for assistance so long as the cash gifts do not exceed the new asset limits. These projected changes to the rules for people receiving disability benefits following the annual earnings exemption instituted by the Ministry on January 1, 2015 will enhance the financial security of disabled persons and allow them to receive more financial support without impacting their disability benefits.