Does it matter for ODSP purposes whether a Henson trust distributes income or capital to the beneficiary?

It can, and this is an area where you shouldn't assume a distribution is treated the same regardless of its type or purpose. ODSP's rules can treat different kinds of trust payments differently depending on factors like what the money is for, how it's paid, and whether it affects the beneficiary's income or assets for that assessment period. Because these details can be nuanced and can change, this isn't something to plan around based on a general assumption. The safer approach is to confirm with ODSP or the beneficiary's caseworker before a specific distribution is made, rather than after the fact.

What stays constant is the underlying protective principle: as long as the trustee retains absolute discretion and the beneficiary has no enforceable right to demand any particular payment, the trust property itself generally isn't counted as the beneficiary's asset. But once the trustee actually decides to make a payment, whether framed as income or capital, how that specific payment is treated by ODSP is a separate question from the trust's underlying validity.

Trustees making regular or significant distributions from a Henson trust should build in a habit of checking with ODSP or a caseworker before or shortly after each distribution, to avoid an unexpected effect on the beneficiary's benefits.